Covenants of the Company Regarding the Conduct of Business. The Company covenants and agrees that, until the earlier of the Effective Time and the time that this Agreement is terminated in accordance with its terms, unless the Purchaser otherwise consents in writing (to the extent that such consent is permitted by applicable Law), which consent will not be unreasonably withheld, conditioned or delayed, or expressly permitted or specifically contemplated by this Agreement, or as set out in the Exeter Disclosure Letter or as is otherwise required by applicable Law: (a) the businesses of the Company and its subsidiaries will be conducted only in the ordinary course of business and in accordance with the Exeter Budget, the Company and its subsidiaries will comply with the terms of all Material Contracts and the Company and its subsidiaries will use commercially reasonable efforts to maintain and preserve intact its business organizations, assets, properties, rights, goodwill and business relationships and keep available the services of its officers, employees and consultants as a group; (b) the Company will cooperate and consult through meetings with the Purchaser, as the Purchaser may reasonably request, to allow the Purchaser to monitor, and provide reasonable input with respect to the direction of, any activities relating to the exploration and maintenance of Exeter Properties and discuss with the Purchaser prior to any required public disclosure of exploration results or other technical information provided nothing contained in this Section 4.1(b) shall prevent the Company from publicly disclosing any information required by Law or the rules or policies of the TSX or NYSE MKT after prior notice to the Purchaser and, other than as contemplated by the Exeter Budget, will not make any capital expenditures or other financial commitments in excess of $500,000 or $2,000,000 in the aggregate; (c) the Company will not, directly or indirectly: (i) alter or amend the notice of articles, articles, charter, by-laws or other constating documents of the Company or its subsidiaries; (ii) declare, set aside or pay any dividend on or make any distribution or payment or return of capital in respect of any equity securities of the Company (other than dividends, distributions, payments or return of capital made to the Company); (iii) split, divide, consolidate, combine or reclassify the Exeter Shares or any other securities of the Company or its subsidiaries; (iv) issue, grant, sell or pledge or authorize or agree to issue, grant, sell or pledge any Exeter Shares or other securities of the Company or its subsidiaries, or securities convertible into or exchangeable or exercisable for, or otherwise evidencing a right to acquire, Exeter Shares or other securities of the Company or its subsidiaries, other than the issuance of Exeter Shares issuable pursuant to the terms of Exeter Options outstanding on the date hereof; (v) redeem, purchase or otherwise acquire or subject to any Lien, any of its outstanding Exeter Shares or other securities or securities convertible into or exchangeable or exercisable for Exeter Shares or any such other securities or any shares or other securities of its subsidiaries; (vi) other than as set out in Section 4.1(c)(vi) of the Exeter Disclosure Letter, amend the terms of any securities of the Company or its subsidiaries; (vii) adopt a plan of liquidation or resolution providing for the liquidation or dissolution of the Company or its subsidiaries; (viii) reorganize, amalgamate or merge with any other person and will not cause or permit its subsidiaries to reorganize, amalgamate or merge with any other person; (ix) create any subsidiary or enter into any Contracts or other arrangements regarding the control or management of the operations, or the appointment of governing bodies or enter into any Joint Ventures; (x) make any material changes to any of its accounting policies, principles, methods, practices or procedures (including by adopting any material new accounting policies, principles, methods, practices or procedures), except as disclosed in the Public Disclosure Record, as required by applicable Laws or under IFRS; or (xi) enter into, modify or terminate any Contract with respect to any of the foregoing; (d) the Company will immediately notify the Purchaser orally and then promptly notify the Purchaser in writing of (i) any “material change” (as defined in the Securities Act) in relation to the Company or its subsidiaries, (ii) any event, circumstance or development that has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, (iii) any breach of this Agreement by the Company, or (iv) any event occurring after the date of this Agreement that would render a representation or warranty, if made on that date or the Effective Time, inaccurate; (e) except as contemplated in the Exeter Budget, the Company will not, and will not cause or permit its subsidiaries to, directly or indirectly, except in connection with this Agreement: (i) sell, pledge, lease, licence, dispose of or encumber any assets or properties of the Company or its subsidiaries related to the Material Property; (ii) acquire (by merger, amalgamation, consolidation, arrangement or acquisition of shares or other equity securities or interests or assets or otherwise) any corporation, partnership, association or other business organization or division thereof or any property or asset, or make any investment by the purchase of securities, contribution of capital, property transfer, or purchase of any property or assets of any other person; (iii) incur any expenses (except in the ordinary course of business consistent with past practice in the last 12 months, as required to exercise its rights and discharge its obligations under this Agreement, or as contemplated in the Exeter Budget) or incur any indebtedness for borrowed money or issue any debt securities, or assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other person, or make any loans or advances; (iv) pay, discharge or satisfy any claim, liability or obligation prior to the same being due, other than the payment, discharge or satisfaction, in the ordinary course of business, of liabilities reflected or reserved against in the Financial Statements, or voluntarily waive, release, assign, settle or compromise any Proceeding; (v) make any investment in or to Chile or any person or property located, domiciled or otherwise incorporated, as applicable, in Chile, including but not limited to, in the form of cash, cash equivalents, loan, purchase of securities, contribution of capital, property transfer or purchase of any property or assets (except in the ordinary course of business consistent with past practice in the last 12 months or as contemplated in the Exeter Budget); (vi) engage in any new business, enterprise or other activity that is inconsistent with the existing businesses of the Company in the manner such existing businesses generally have been carried on or (as disclosed in the Public Disclosure Record) planned or proposed to be carried on prior to the date of this Agreement; (vii) except as provided for in the Exeter Budget in respect of any Exeter Property or as are required by applicable Laws to maintain any Permits in good standing, expend or commit to expend any amounts with respect to expenses for such Exeter Property; or (viii) authorize any of the foregoing, or enter into or modify any Contract to do any of the foregoing; (f) the Company will not, and will not cause or permit its subsidiaries to, directly or indirectly, except in the ordinary course of business: (i) terminate, fail to renew, cancel, waive, release, grant or transfer any rights of material value; (ii) except in connection with matters otherwise permitted under this Section 4.1, enter into any Contract which would be a Material Contract if in existence on the date hereof, or terminate, cancel, extend, renew or amend, modify or change any Material Contract; (iii) enter into any lease or sublease of real property (whether as a lessor, sublessor, lessee or sublessee), or modify, amend or exercise any right to renew any lease or sublease of real property or acquire any interest in real property; or (iv) enter into any Contract containing any provision restricting or triggered by the Contemplated Transactions; (g) Neither the Company nor its subsidiaries will, except in the ordinary course of business or pursuant to any existing Contracts or employment, pension, supplemental pension, termination or compensation arrangements or policies or plans in effect on the date hereof, and except as is necessary to comply with applicable Laws: (i) grant to any officer, director, employee or consultant of the Company or its subsidiaries an increase in compensation in any form; (ii) grant any general salary increase, fee or pay any bonus or other material compensation to the directors, officers, employees or consultants of the Company and its subsidiaries; (iii) except as set out in Section 4.1(g)(iii) of the Exeter Disclosure Letter, take any action with respect to the grant or increase of any severance, change of control, retirement, retention or termination pay; (iv) enter into or modify any employment or consulting agreement with any officer or director of the Company or its subsidiaries; (v) terminate the employment or consulting arrangement of any senior management employees (including the Exeter Senior Management), except for cause; (vi) increase any benefits payable under its current severance or termination pay policies; (vii) other than as set out in Section 4.1(g)(vii) of the Exeter Disclosure Letter, adopt or amend or make any contribution to or any award under the Stock Option Plan, any restricted share unit plan, deferred share unit plan, performance share unit plan or other bonus, profit sharing, option, pension, retirement, deferred compensation, insurance, incentive compensation, compensation or other similar plan, agreement, trust, fund or arrangement for the benefit of directors or senior officers or former directors or senior officers of the Company or its subsidiaries; or (viii) take any action to accelerate the time of payment of any compensation or benefits, amend or waive any performance or vesting criteria or accelerate vesting under the Stock Option Plan, except in accordance with its terms as contemplated herein or therein; (h) neither the Company nor its subsidiaries will make any loan to any officer, director, employee or consultant of the Company or its subsidiaries; (i) the Company will use its commercially reasonable efforts to cause the current insurance (or re-insurance) policies maintained by the Company, including directors’ and officers’ insurance, not to be cancelled or terminated and to prevent any of the coverage thereunder from lapsing, unless at the time of such termination, cancellation or lapse, replacement policies underwritten by insurance or re-insurance companies of nationally recognized standing having comparable deductions and providing coverage comparable to or greater than the coverage under the cancelled, terminated or lapsed policies for substantially similar premiums are in full force and effect, provided, however, that, except as contemplated by Section 4.8(b), the Company will not obtain or renew any insurance (or re-insurance) policy for a term exceeding 12 months; (j) the Company will use commercially reasonable efforts to retain the services of its and its subsidiaries’ existing employees and consultants (including the Exeter Senior Management) and will promptly provide written notice to the Purchaser of the resignation or termination of any of its key employees or consultants; (k) neither the Company nor its subsidiaries will make an application to amend, terminate, allow to expire or lapse or otherwise modify any of its Permits or take any action or fail to take any action which action or failure to act would result in the material loss, expiration or surrender of, or the loss of any material benefit under, or reasonably be expected to cause any Governmental Authority to institute proceedings for the suspension, revocation or limitation of rights under, any material Permit necessary to conduct its businesses as now being conducted; (l) the Company and each of its subsidiaries will (i) duly and timely file all Returns required to be filed by it on or after the date hereof and all such Returns will be true, complete and correct in all material respects and (ii) timely withhold, collect, remit and pay all Taxes which are to be withheld, collected, remitted or paid by it to the extent due and payable except for any Taxes contested in good faith pursuant to applicable Laws, and the Company will not (A) change its tax accounting methods, principles or practices, except insofar as may have been required by a change in IFRS or applicable Law, (B) settle, compromise or agree to the entry of judgment with respect to any action, claim or other Proceeding relating to Taxes, (other than the payment, discharge or satisfaction of liabilities reflected or reserved against in the Financial Statements) (C) enter into any tax sharing, tax allocation or tax indemnification agreement, (D) make a request for a tax ruling to any Governmental Authority, or (E) agree to any extension or waiver of the limitation period relating to any material Tax claim or assessment or reassessment; (m) the Company will not, and will not cause or permit its subsidiaries to, settle or compromise any action, claim or other Proceeding (i) brought against it for damages or providing for the grant of injunctive relief or other non-monetary remedy (“Litigation”) or (ii) brought by any present, former or purported holder of its securities in connection with the Contemplated Transactions; (n) the Company will not, and will not cause or permit its subsidiaries to, commence any Litigation (other than litigation in connection with the collection of accounts receivable, to enforce the terms of this Agreement or the Confidentiality Agreement, to enforce other obligations of the Purchaser or as a result of litigation commenced against the Company); (o) the Company will not, and will not cause or permit its subsidiaries to, enter into or renew any Contract (i) containing (A) any limitation or restriction on the ability of the Company or its subsidiaries or, following the Effective Time, the ability of the Purchaser or any of its affiliates, to engage in any type of activity or business, (B) any limitation or restriction on the manner in which, or the localities in which, all or any portion of the business of the Company or its subsidiaries or, following the Effective Time, all or any portion of the business of the Purchaser or any of its affiliates, is or would be conducted or (C) any limit or restriction on the ability of the Company or its subsidiaries or, following the Effective Time, the ability of the Purchaser or any of its affiliates, to solicit customers or employees, or (ii) that would reasonably be expected to prevent or significantly impede or materially delay the completion of the Contemplated Transactions; (p) the Company will not, and will not cause or permit any of its subsidiaries to, take any action which would render, or which reasonably may be expected to render, any representation or warranty made by the Company in this Agreement untrue or inaccurate in any material respect (disregarding for this purpose all materiality or Material Adverse Effect qualifications contained therein) at any time prior to the Effective Time if then made; and (q) as is applicable, the Company will not, and will not cause or permit its subsidiaries to, agree, announce, resolve, authorize or commit to do any of the foregoing.
Appears in 3 contracts
Samples: Support Agreement (Goldcorp Inc), Support Agreement (Exeter Resource Corp), Support Agreement (Goldcorp Inc)
Covenants of the Company Regarding the Conduct of Business. (a) The Company covenants and agrees that, subject to Applicable Law, during the period from the date of this Agreement until the earlier of the Effective Time and the time that this Agreement is terminated in accordance with its terms, unless except with the express prior written consent of the Parent and the Purchaser otherwise consents in writing (to the extent that such consent is or as required or permitted by applicable Law), which consent will not be unreasonably withheld, conditioned or delayed, or expressly permitted or specifically contemplated by this Agreement, or as set out the Company shall conduct its business in the Exeter Disclosure Letter or as is otherwise required by applicable Law:
(a) the businesses of the Company and its subsidiaries will be conducted only in the ordinary course of business Ordinary Course and in accordance with Applicable Law.
(b) Without limiting the Exeter Budgetgenerality of Section 7.2(a), subject to Applicable Law, the Company covenants and agrees that, during the period from the date of this Agreement until the earlier of the Effective Time and the time that this Agreement is terminated in accordance with its subsidiaries will comply terms, except with the terms express prior written consent of all Material Contracts the Parent and the Purchaser or as required or permitted by this Agreement, the Company and shall use its subsidiaries will use reasonable commercially reasonable efforts to maintain and preserve intact its the current business organizationsorganization, assets, properties, rights, goodwill properties and business relationships and of the Company, maintain in effect all material Authorizations of the Company, keep available the services of its officers, the present employees and consultants as a group;
(b) agents of the Company will cooperate and consult through meetings maintain good relations with, and the goodwill of, employees, suppliers, customers, creditors and all other Persons having business relationships with the PurchaserCompany and, as except with the prior written consent of the Parent and the Purchaser may reasonably request, to allow the Purchaser to monitor, and provide reasonable input with respect to the direction of, any activities relating to the exploration and maintenance of Exeter Properties and discuss as required in connection with the Purchaser prior to any required public disclosure of exploration results or other technical information provided nothing contained in this Section 4.1(b) shall prevent Bridge Loan Financing, the Company from publicly disclosing any information required by Law or the rules or policies of the TSX or NYSE MKT after prior notice to the Purchaser and, other than as contemplated by the Exeter Budget, will not make any capital expenditures or other financial commitments in excess of $500,000 or $2,000,000 in the aggregate;
(c) the Company will shall not, directly or indirectly:
(i) alter or amend the notice of articles, articles, charter, by-laws or other constating documents of the Company or make any change in its subsidiariesOrganizational Documents;
(ii) split, combine, consolidate or reclassify any shares of its capital stock, undertake any capital reorganization or declare, set aside or pay any dividend on or make other distribution (whether in cash, stock or property or any distribution or payment or return of capital in respect of any equity securities of the Company (other than dividends, distributions, payments or return of capital made to the Companycombination thereof);
(iii) splitredeem, dividerepurchase, consolidateor otherwise acquire or offer to redeem, combine repurchase or reclassify otherwise acquire any shares of its capital stock or reduce the Exeter stated capital in respect of the Company Common Shares or any other securities shares of the Company or its subsidiariesCompany;
(iv) issue, grant, sell or deliver, sell, pledge or otherwise encumber, or authorize or agree to issuethe issuance, grant, sell or delivery, sale, pledge any Exeter Shares or other securities encumbrance of any shares of capital stock, securities, options, warrants or similar rights exercisable or exchangeable for or convertible into such capital stock, of the Company or its subsidiariesCompany, or securities convertible into or exchangeable or exercisable for, or otherwise evidencing a right to acquire, Exeter Shares or other securities of the Company or its subsidiaries, other than except for the issuance of Exeter Company Common Shares (A) issuable upon the exercise of the currently outstanding Company Options or (B) pursuant to the terms of Exeter Options outstanding on the date hereofCompany Warrants;
(v) redeemacquire (by merger, purchase consolidation, acquisition of stock or otherwise acquire assets or subject otherwise), directly or indirectly, in one transaction or in a series of related transactions, assets, securities, properties, interests or businesses of any other Person (other than pursuant to any Lien, any of its outstanding Exeter Shares or other securities or securities convertible into or exchangeable or exercisable for Exeter Shares or any such other securities or any shares or other securities of its subsidiariesthe transactions contemplated by this Agreement);
(vi) reorganize, amalgamate, combine or merge the Company with any other Person (other than as set out in Section 4.1(c)(vi) of pursuant to the Exeter Disclosure Letter, amend the terms of any securities of the Company or its subsidiariestransactions contemplated by this Agreement);
(vii) adopt a plan of liquidation or resolution resolutions providing for the liquidation or dissolution of the Company or its subsidiariesCompany;
(viii) reorganizesell, amalgamate pledge, lease, dispose of, surrender, lose the right to use, mortgage, license, encumber (other than Permitted Liens) or merge with otherwise dispose of or transfer any assets of the Company or any interest in any assets of the Company, other person and will not cause or permit its subsidiaries to reorganize, amalgamate or merge with any other personthan in the Ordinary Course;
(ix) create make any subsidiary capital expenditure or enter into any Contracts or similar commitments, other arrangements regarding than in the control or management of the operations, or the appointment of governing bodies or enter into any Joint VenturesOrdinary Course;
(x) make any material changes loan or advance to, or any capital contribution or investment in, or assume, guarantee or otherwise become liable with respect to the liabilities or obligations of, any of its accounting policiesPerson, principles, methods, practices or procedures (including by adopting any material new accounting policies, principles, methods, practices or procedures), except as disclosed other than in the Public Disclosure Record, as required by applicable Laws or under IFRS; orOrdinary Course;
(xi) enter intoprepay any long-term indebtedness before its scheduled maturity or increase, modify create, incur, assume or terminate any Contract otherwise become liable, in one transaction or in a series of related transactions, with respect to any of the foregoing;
(d) the Company will immediately notify the Purchaser orally and then promptly notify the Purchaser in writing of (i) any “material change” (as defined in the Securities Act) in relation to the Company or its subsidiaries, (ii) any event, circumstance or development that has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, (iii) any breach of this Agreement by the Company, or (iv) any event occurring after the date of this Agreement that would render a representation or warranty, if made on that date or the Effective Time, inaccurate;
(e) except as contemplated in the Exeter Budget, the Company will not, and will not cause or permit its subsidiaries to, directly or indirectly, except in connection with this Agreement:
(i) sell, pledge, lease, licence, dispose of or encumber any assets or properties of the Company or its subsidiaries related to the Material Property;
(ii) acquire (by merger, amalgamation, consolidation, arrangement or acquisition of shares or other equity securities or interests or assets or otherwise) any corporation, partnership, association or other business organization or division thereof or any property or asset, or make any investment by the purchase of securities, contribution of capital, property transfer, or purchase of any property or assets of any other person;
(iii) incur any expenses (except in the ordinary course of business consistent with past practice in the last 12 months, as required to exercise its rights and discharge its obligations under this Agreement, or as contemplated in the Exeter Budget) or incur any indebtedness for borrowed money or issue guarantees thereof, other than in the Ordinary Course; provided that any debt securitiesindebtedness created, incurred, refinanced, assumed or assumefor which the Company becomes liable in accordance with the any of the foregoing shall be prepayable at the Effective Time without premium, guarantee, endorse penalty or otherwise as an accommodation become responsible for the obligations of any other person, or make any loans or advancesincremental costs (including breakage costs);
(ivxii) payenter into any interest rate, discharge currency, equity or satisfy commodity swaps, xxxxxx, derivatives, forward sales contracts or similar financial instruments;
(xiii) make any claimbonus or profit sharing distribution or similar payment of any kind;
(xiv) grant any general increase in the rate of wages, liability salaries, bonuses or obligation prior to the same being dueother remuneration of any Company Employees, other than the payment, discharge or satisfaction, in the ordinary course of businessOrdinary Course;
(xv) except as required by United States GAAP, of liabilities reflected or reserved against make any change in the Financial StatementsCompany’s methods of accounting;
(xvi) make any material Tax election, information schedule, return or voluntarily waivedesignation, release, assignexcept as required by Applicable Law and in a manner consistent with past practice, settle or compromise any Proceeding;
(v) make material Tax claim, assessment, reassessment or liability, file any investment in or to Chile or any person or property located, domiciled or otherwise incorporated, as applicable, in Chile, including but not limited to, in the form of cash, cash equivalents, loan, purchase of securities, contribution of capital, property transfer or purchase of any property or assets (except in the ordinary course of business consistent with past practice in the last 12 months or as contemplated in the Exeter Budget);
(vi) engage in any new business, enterprise or other activity that is inconsistent with the existing businesses of the Company in the manner such existing businesses generally have been carried on or (as disclosed in the Public Disclosure Record) planned or proposed to be carried on prior to the date of this Agreement;
(vii) except as provided for in the Exeter Budget in respect of any Exeter Property or as are required by applicable Laws to maintain any Permits in good standing, expend or commit to expend any amounts with respect to expenses for such Exeter Property; or
(viii) authorize any of the foregoing, or enter into or modify any Contract to do any of the foregoing;
(f) the Company will not, and will not cause or permit its subsidiaries to, directly or indirectly, except in the ordinary course of business:
(i) terminate, fail to renew, cancel, waive, release, grant or transfer any rights of material value;
(ii) except in connection with matters otherwise permitted under this Section 4.1amended Tax Return, enter into any Contract which would be material agreement with a Material Contract if in existence on the date hereofGovernmental Authority with respect to Taxes, or terminate, cancel, extend, renew or amend, modify or change any Material Contract;
(iii) enter into any lease or sublease of real property (whether as a lessor, sublessor, lessee or sublessee), or modify, amend or exercise surrender any right to renew any lease claim a material Tax abatement, reduction, deduction, exemption, credit or sublease of real property or acquire any interest in real property; or
(iv) enter into any Contract containing any provision restricting or triggered by the Contemplated Transactions;
(g) Neither the Company nor its subsidiaries willrefund, except in the ordinary course of business or pursuant to any existing Contracts or employment, pension, supplemental pension, termination or compensation arrangements or policies or plans in effect on the date hereof, and except as is necessary to comply with applicable Laws:
(i) grant to any officer, director, employee or consultant of the Company or its subsidiaries an increase in compensation in any form;
(ii) grant any general salary increase, fee or pay any bonus or other material compensation consent to the directors, officers, employees or consultants of the Company and its subsidiaries;
(iii) except as set out in Section 4.1(g)(iii) of the Exeter Disclosure Letter, take any action with respect to the grant or increase of any severance, change of control, retirement, retention or termination pay;
(iv) enter into or modify any employment or consulting agreement with any officer or director of the Company or its subsidiaries;
(v) terminate the employment or consulting arrangement of any senior management employees (including the Exeter Senior Management), except for cause;
(vi) increase any benefits payable under its current severance or termination pay policies;
(vii) other than as set out in Section 4.1(g)(vii) of the Exeter Disclosure Letter, adopt or amend or make any contribution to or any award under the Stock Option Plan, any restricted share unit plan, deferred share unit plan, performance share unit plan or other bonus, profit sharing, option, pension, retirement, deferred compensation, insurance, incentive compensation, compensation or other similar plan, agreement, trust, fund or arrangement for the benefit of directors or senior officers or former directors or senior officers of the Company or its subsidiaries; or
(viii) take any action to accelerate the time of payment of any compensation or benefits, amend or waive any performance or vesting criteria or accelerate vesting under the Stock Option Plan, except in accordance with its terms as contemplated herein or therein;
(h) neither the Company nor its subsidiaries will make any loan to any officer, director, employee or consultant of the Company or its subsidiaries;
(i) the Company will use its commercially reasonable efforts to cause the current insurance (or re-insurance) policies maintained by the Company, including directors’ and officers’ insurance, not to be cancelled or terminated and to prevent any of the coverage thereunder from lapsing, unless at the time of such termination, cancellation or lapse, replacement policies underwritten by insurance or re-insurance companies of nationally recognized standing having comparable deductions and providing coverage comparable to or greater than the coverage under the cancelled, terminated or lapsed policies for substantially similar premiums are in full force and effect, provided, however, that, except as contemplated by Section 4.8(b), the Company will not obtain or renew any insurance (or re-insurance) policy for a term exceeding 12 months;
(j) the Company will use commercially reasonable efforts to retain the services of its and its subsidiaries’ existing employees and consultants (including the Exeter Senior Management) and will promptly provide written notice to the Purchaser of the resignation or termination of any of its key employees or consultants;
(k) neither the Company nor its subsidiaries will make an application to amend, terminate, allow to expire or lapse or otherwise modify any of its Permits or take any action or fail to take any action which action or failure to act would result in the material loss, expiration or surrender of, or the loss of any material benefit under, or reasonably be expected to cause any Governmental Authority to institute proceedings for the suspension, revocation or limitation of rights under, any material Permit necessary to conduct its businesses as now being conducted;
(l) the Company and each of its subsidiaries will (i) duly and timely file all Returns required to be filed by it on or after the date hereof and all such Returns will be true, complete and correct in all material respects and (ii) timely withhold, collect, remit and pay all Taxes which are to be withheld, collected, remitted or paid by it to the extent due and payable except for any Taxes contested in good faith pursuant to applicable Laws, and the Company will not (A) change its tax accounting methods, principles or practices, except insofar as may have been required by a change in IFRS or applicable Law, (B) settle, compromise or agree to the entry of judgment with respect to any action, claim or other Proceeding relating to Taxes, (other than the payment, discharge or satisfaction of liabilities reflected or reserved against in the Financial Statements) (C) enter into any tax sharing, tax allocation or tax indemnification agreement, (D) make a request for a tax ruling to any Governmental Authority, or (E) agree to any extension or waiver of the limitation period relating applicable to any material Tax claim matter or assessment materially amend or reassessmentchange any of its methods or reporting income, deductions or accounting for income Tax purposes except as may be required by Applicable Law;
(mxvii) the Company will not, and will not cause or permit its subsidiaries to, settle or compromise any action, claim or other Proceeding (i) brought against it for damages or providing for the grant of injunctive relief or other non-monetary remedy (“Litigation”) or (ii) brought by any present, former or purported holder of its securities in connection with the Contemplated Transactions;
(n) the Company will not, and will not cause or permit its subsidiaries to, commence any Litigation (other than litigation in connection with the collection of accounts receivable, to enforce the terms of this Agreement or the Confidentiality Agreement, to enforce other obligations of the Purchaser or as a result of litigation commenced against the Company);
(o) the Company will not, and will not cause or permit its subsidiaries tocreate, enter into or renew increase any Contract severance, change of control or termination pay to (i) containing (Aor amend any similar existing arrangement with) any limitation Company Employee, director or restriction on the ability executive officer of the Company or its subsidiaries orchange the benefits payable under any existing severance or termination pay policies with any Company Employee, following the Effective Time, the ability director or executive officer of the Purchaser Company;
(xviii) except as required by Applicable Law: (A) adopt, enter into or amend any Employee Plan (other than entering into an employment agreement in the Ordinary Course with a new Company Employee who was not employed by the Company on the date of its affiliates, to engage in any type of activity or business, this Agreement); (B) pay any limitation benefit to any director or restriction on the manner in which, or the localities in which, all or any portion of the business officer of the Company or its subsidiaries or, following to any Company Employee that is not required under the Effective Time, all or terms of any portion Employee Plan in effect on the date of the business of the Purchaser or any of its affiliates, is or would be conducted or this Agreement; (C) grant, accelerate, increase or otherwise amend any limit payment, award or restriction on other benefit payable to, or for the ability benefit of, any director or officer of the Company or its subsidiaries or, following to any Company Employee; (D) make any material determination under any Employee Plan that is not in the Effective Time, the ability of the Purchaser Ordinary Course; (E) take or any of its affiliates, to solicit customers or employees, or (ii) that would reasonably be expected to prevent or significantly impede or materially delay the completion of the Contemplated Transactions;
(p) the Company will not, and will not cause or permit any of its subsidiaries to, take propose any action which would render, or which reasonably may be expected to render, any representation or warranty made by the Company in this Agreement untrue or inaccurate in any material respect (disregarding for this purpose all materiality or Material Adverse Effect qualifications contained therein) at any time prior to the Effective Time if then made; and
(q) as is applicable, the Company will not, and will not cause or permit its subsidiaries to, agree, announce, resolve, authorize or commit to do effect any of the foregoing.; or (F) hire or terminate or promote any employee whose base salary is greater than $75,000;
Appears in 1 contract
Covenants of the Company Regarding the Conduct of Business. The Company covenants and agrees that, during the period from the date of this Agreement until the earlier of the Effective Time and the time that this Agreement is terminated in accordance with its terms, unless except (i) with the Purchaser otherwise consents Purchaser’s consent in writing (to the extent that such consent is permitted by applicable Law), which consent will not be unreasonably withheld, conditioned or delayed, or (ii) as expressly permitted or specifically contemplated by this Agreement, or (iii) as set out in the Exeter Company Disclosure Letter Letter, or (iv) as is otherwise required by applicable LawLaw or Governmental Authority:
(a) the businesses of the Company and its subsidiaries will be conducted only in the ordinary course of business consistent in all respects with past practice and in accordance with applicable Laws, with the Exeter Budgetexception of U.S. Federal Cannabis Laws, the Company and its subsidiaries will comply with the terms of all Material Contracts and the Company and its subsidiaries will use commercially reasonable efforts to maintain and preserve intact its business organizations, assets, properties, rights, Permits, goodwill and business relationships and keep available the services of its officers, employees and consultants as a group;
(b) the Company will cooperate and consult through meetings with the Purchaser, as the Purchaser may reasonably request, to allow the Purchaser to monitor, review and provide reasonable input with respect to the direction of, any of activities relating to the exploration and maintenance of Exeter Properties and discuss with the Purchaser prior to any required public disclosure of exploration results or other technical information provided nothing contained in this Section 4.1(b) shall prevent the Company from publicly disclosing any information required by Law or the rules or policies of the TSX or NYSE MKT after prior notice to the Purchaser and, other than as contemplated by the Exeter Budget, will not make any capital expenditures or other financial commitments in excess of $500,000 or $2,000,000 in the aggregateand its subsidiaries;
(c) without limiting the generality of Section 4.1(a) above, the Company will not, directly or indirectly:
(i) alter or amend the notice of articles, articles, charter, by-laws articles or other constating documents of the Company or any of its subsidiaries;
(ii) declare, set aside or pay any dividend on or make any distribution or payment or return of capital in respect of any equity securities of the Company or any subsidiaries (other than dividends, distributions, payments or return of capital made to the CompanyCompany by any subsidiary), other than with respect to its obligations under the terms of the Company Convertible Debentures, the Company Series D Shares and Company Series E Shares;
(iii) split, divide, consolidate, combine or reclassify the Exeter Company Shares or any other securities of the Company or its subsidiaries;
(iv) issue, sell, grant, sell award, pledge, dispose of or pledge or authorize otherwise encumber or agree to issue, sell, grant, sell award, pledge, dispose of or pledge otherwise encumber any Exeter Company Shares or other equity or voting interests or any options, stock appreciation rights, warrants, calls, conversion or exchange privileges or rights of any kind to acquire (whether on exchange, exercise, conversion or otherwise) any Company Shares or other equity or voting interests or other securities or any shares of its subsidiaries (including, for greater certainty, Company Options, Company Warrants or any other equity based awards), other than pursuant to the exercise or vesting, as applicable, of Company Options, Company Warrants that are outstanding as of the date of this Agreement in accordance with their terms (as such terms are disclosed in the Company Public Disclosure Record) and the issuance of shares pursuant the conversion of the Company or its subsidiariesConvertible Debentures, or securities convertible into or exchangeable or exercisable for, or otherwise evidencing a right to acquire, Exeter Shares or other securities of the Company or its subsidiaries, other than Series D Shares and the issuance of Exeter Company Series E Shares issuable pursuant to the terms of Exeter Options outstanding on the date hereofin accordance with their terms;
(v) redeem, purchase or otherwise acquire or subject to any Lien, any of its outstanding Exeter Company Shares or other securities or securities convertible into or exchangeable or exercisable for Exeter Company Shares or any such other securities or any shares or other securities of its subsidiaries;
(vi) other than as set out in Section 4.1(c)(vi) of the Exeter Disclosure Letter, amend the terms of any securities of the Company or its subsidiaries;
(vii) adopt a plan of liquidation or pass any resolution providing for the liquidation or dissolution of the Company or its subsidiaries;
(viii) reorganize, amalgamate or merge the Company with any other person and will not cause or permit its subsidiaries to reorganize, amalgamate or merge with any other person;
(ix) reduce the stated capital of the shares of the Company or any of its subsidiaries;
(x) create any subsidiary or enter into any Contracts or other arrangements regarding the control or management of the operationsoperations of the Company or its subsidiaries, or the appointment of governing bodies or enter into any Joint Venturesjoint venture or similar agreement, arrangement or relationship;
(xxi) make any material changes to any of its accounting policies, principles, methods, practices or procedures (including by adopting any material new accounting policies, principles, methods, practices or procedures), except as disclosed in the Company Public Disclosure Record, as required by applicable Laws or under IFRS; or
(xixii) enter into, modify or terminate any Contract with respect to any of the foregoing;
(d) if the volume weighted average trading price of the Company Shares for five consecutive trading days exceeds C$0.96, the Company will take all steps necessary to effect the conversion of the Company Convertible Debentures in accordance with their terms;
(e) if the volume weighted average trading price of the Company Shares for 10 consecutive trading days exceeds C$0.564, the Company will take all steps required in connection with the accelerated expiry of the Company May 2019 Warrants in accordance with their terms;
(f) the Company will immediately notify the Purchaser orally and then promptly notify the Purchaser in writing of (i) any “material change” (as defined in the Securities Act) in relation to the Company or its subsidiaries, (ii) any event, circumstance or development that has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, (iii) any breach of this Agreement by the Company, or (iv) any event occurring after the date of this Agreement that would render a representation or warranty, if made on that date or the Effective TimeDate, inaccurateinaccurate such that any of the conditions in Section 7.3(b) would not be satisfied;
(eg) except as contemplated in the Exeter Budget, the Company will not, and will not cause or permit its subsidiaries to, directly or indirectly, except in connection with this Agreement:
(i) sell, pledge, lease, licence, dispose of of, mortgage or encumber or otherwise transfer any assets or properties of the Company or its subsidiaries related including without limitation with respect to the Material PropertyCompany Owned Real Properties or the Company Leased Properties;
(ii) acquire (by merger, amalgamation, consolidation, arrangement or acquisition of shares or other equity securities or interests or assets or otherwise) or agree to acquire, directly or indirectly, in one transaction of a series of related transactions, any corporation, partnership, association or other business organization or division thereof or any property or asset, or make any investment investment, directly or indirectly, in one transaction or in a series of related transactions, by the purchase of securities, contribution of capital, property transfer, or purchase of any property or assets of any other person;
(iii) incur any expenses (except capital expenditures, enter into any agreement obligating the Company or its subsidiaries to provide for future capital expenditures, in the ordinary course aggregate, in excess of business consistent with past practice in the last 12 months, as required to exercise its rights and discharge its obligations under this Agreement, or as contemplated in the Exeter Budget$100,000;
(iv) or incur any indebtedness for borrowed money (including the making of any payments in respect thereof, including any premiums or penalties thereon or fees in respect thereof) or issue any debt securities, or assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other person, or make any loans or advances;
(ivv) pay, discharge or satisfy any claim, liability or obligation prior to the same being due, other than the payment, discharge or satisfaction, in the ordinary course of business, of liabilities reflected or reserved against in the Company Interim Financial Statements, or voluntarily waive, release, assign, settle or compromise any Proceeding;
(v) make any investment in or to Chile or any person or property located, domiciled or otherwise incorporated, as applicable, in Chile, including but not limited to, in the form of cash, cash equivalents, loan, purchase of securities, contribution of capital, property transfer or purchase of any property or assets (except in the ordinary course of business consistent with past practice in the last 12 months or as contemplated in the Exeter Budget);
(vi) engage in any new business, enterprise or other activity that is inconsistent with the existing businesses of the Company in the manner such existing businesses generally have been carried on or (as disclosed in the Company Public Disclosure Record) planned or proposed to be carried on prior to the date of this Agreement;
(vii) except as provided for enter into or terminate any interest rate, currency, equity or commodity swaps, xxxxxx, derivatives, forward sales contracts or other financial instruments or like transaction, other than in the Exeter Budget in respect ordinary course of any Exeter Property or as are required by applicable Laws to maintain any Permits in good standing, expend or commit to expend any amounts business consistent with respect to expenses for such Exeter Propertythe Company’s financial risk management policy; or
(viii) authorize any of the foregoing, or enter into or modify any Contract to do any of the foregoing;
(fh) the Company will not, and will not cause or permit its subsidiaries to, directly or indirectly, except in the ordinary course of business:
(i) terminate, fail to renew, cancel, waive, release, grant or transfer any rights of material value;
(ii) except in connection with matters otherwise permitted under this Section 4.1, enter into any Contract which that, if entered into prior to the date hereof, would be a Material Contract if in existence on the date hereofContract, or terminate, cancel, extend, renew or amend, modify or change any Material Contract, or waive, release, or assign any material rights or claims thereto or thereunder;
(iii) enter into any lease or sublease of real property (whether as a lessor, sublessor, lessee or sublessee), or modify, amend or exercise any right to renew any lease or sublease of real property or acquire any interest in real property; or
(iv) enter into any Contract containing any provision restricting or triggered by the Contemplated Transactionstransactions contemplated herein;
(gi) Neither neither the Company nor its subsidiaries will, except in the ordinary course of business or pursuant to any existing Contracts or employment, pension, supplemental pension, termination or compensation arrangements or policies or plans in effect on the date hereof, and except as is necessary to comply with applicable Laws:
(i) grant to any officer, director, employee or consultant of the Company or its subsidiaries an increase in compensation in any form;
(ii) grant any general salary or fee increase, fee or pay any bonus bonus, award (equity or otherwise) or other material compensation to the directors, officers, employees or consultants of the Company or its subsidiaries other than the payment of salaries, fees and its subsidiariesbonuses in the ordinary course of business as disclosed in Section 4.1 of the Company Disclosure Letter;
(iii) except as set out in Section 4.1(g)(iii) of the Exeter Disclosure Letter, take any action with respect to the grant grant, acceleration or increase of any severance, change of control, retirement, retention or termination paypay (or amend any existing arrangement relating to the foregoing);
(iv) enter into or modify any employment or consulting agreement with any officer employee or director consultant that provide for base salary or fees in excess of the Company or its subsidiaries$75,000;
(v) terminate the employment or consulting arrangement of any senior management employees (including the Exeter Company Senior Management), except for cause;
(vi) increase any benefits payable under its current severance or termination pay policies;
(vii) other than as set out increase the coverage, contributions, funding requirements or benefits available under any Employee Plan or create any new plan which would be considered to be an Employee Plan once created;
(viii) exercise any discretion with respect to or make any material determination under any Employee Plan that is not in Section 4.1(g)(viithe ordinary course of business;
(ix) of amend the Exeter Disclosure LetterCompany Option Plan, adopt or amend or make any contribution to or any award under the Stock Option Plan, any restricted share unit plan, deferred share unit plan, new performance share unit plan or other bonus, profit sharing, option, pension, retirement, deferred compensation, insurance, incentive compensation, compensation or other similar plan, agreement, trust, fund or arrangement for the benefit of directors or senior officers or former directors or senior officers of the Company or its subsidiaries; or;
(viiix) take any action to accelerate the time of payment of any compensation or benefits, amend or waive any performance or vesting criteria or accelerate vesting under the Stock Company Option Plan, except in accordance with its terms as contemplated herein in the Plan of Arrangement; or
(xi) establish, adopt, enter into, amend or thereinterminate any collective bargaining agreement;
(hj) neither the Company nor its subsidiaries will make any loan to any officer, director, employee or consultant of the Company or its subsidiaries;
(ik) the Company will use its commercially reasonable efforts to cause the current insurance (or re-insurance) policies maintained by the Company, including directors’ and officers’ insurance, not to be cancelled terminated, amended or terminated modified and to prevent any of the coverage thereunder from lapsing, unless at the time of such termination, cancellation or lapse, replacement policies underwritten by insurance or re-insurance companies of nationally recognized standing having comparable deductions deductibles and providing coverage comparable to or greater than the coverage under the cancelled, terminated or lapsed policies for substantially similar premiums are in full force and effect, provided, however, that, except as contemplated by Section 4.8(b), that the Company will not obtain or renew any insurance (or re-insurance) policy for a term exceeding 12 months;
(jl) the Company will use commercially reasonable efforts to retain the services of its and its subsidiaries’ existing employees and consultants (including the Exeter Company Senior Management) until the Effective Time, and will promptly provide written notice to the Purchaser of the resignation or termination of any of its key employees or consultants, including the Key Employees;
(km) neither the Company nor its subsidiaries will make an application to amend, terminate, allow to expire or lapse or otherwise modify any of its Permits or take any action or fail to take any action which action or failure to act would result in the material change, loss, expiration or surrender of, or the loss of any material benefit under, or reasonably be expected to cause any Governmental Authority to institute proceedings for the suspension, revocation or limitation of rights under, any material Permit necessary to conduct its businesses as now being conducted;
(ln) the Company and each of its subsidiaries will (i) duly and timely file all Returns required to be filed by it on or after the date hereof and all such Returns will be true, complete and correct in all material respects and (ii) timely withhold, collect, remit and pay all Taxes which are to be withheld, collected, remitted or paid by it to the extent due and payable except for any Taxes contested in good faith pursuant to applicable Laws, Laws and in respect of which adequate reserves or accruals in accordance with IFRS have been provided in the Company Interim Financial Statements;
(o) the Company will not (Ai) change its tax accounting methods, principles or practices, except insofar as may have been required by a change in IFRS or applicable Law, (B) settle, compromise or agree to the entry of judgment with respect to any action, claim or other Proceeding relating to Taxes, (other than the payment, discharge or satisfaction of liabilities reflected or reserved against in the Financial Statements) (C) enter into any tax sharing, tax allocation or tax indemnification agreement, (D) make a request for a tax ruling to any Governmental Authority, or (E) agree to any extension or waiver of the limitation period relating to any material Tax claim or assessment or reassessment;
(m) the Company will not, and will not cause or permit its subsidiaries to, settle or compromise any action, claim or other Proceeding (i) brought against it for damages or providing for the grant of injunctive relief or other non-monetary remedy (“Litigation”) or (ii) brought by any present, former or purported holder of its securities in connection with the Contemplated Transactions;
(n) the Company will not, and will not cause or permit its subsidiaries to, commence any Litigation (other than litigation in connection with the collection of accounts receivable, to enforce the terms of this Agreement or the Confidentiality Agreement, to enforce other obligations of the Purchaser or as a result of litigation commenced against the Company);
(o) the Company will not, and will not cause or permit its subsidiaries to, enter into or renew any Contract (i) containing (A) any limitation or restriction on the ability of the Company or its subsidiaries or, following the Effective Time, the ability of the Purchaser or any of its affiliates, to engage in any type of activity or business, (B) any limitation or restriction on the manner in which, or the localities in which, all or any portion of the business of the Company or its subsidiaries or, following the Effective Time, all or any portion of the business of the Purchaser or any of its affiliates, is or would be conducted or (C) any limit or restriction on the ability of the Company or its subsidiaries or, following the Effective Time, the ability of the Purchaser or any of its affiliates, to solicit customers or employees, or (ii) that would reasonably be expected to prevent or significantly impede or materially delay the completion of the Contemplated Transactions;
(p) the Company will not, and will not cause or permit any of its subsidiaries to, take any action which would render, or which reasonably may be expected to render, any representation or warranty made by the Company in this Agreement untrue or inaccurate in any material respect (disregarding for this purpose all materiality or Material Adverse Effect qualifications contained therein) at any time prior to the Effective Time if then made; and
(q) as is applicable, the Company will not, and will not cause or permit its subsidiaries to, agree, announce, resolve, authorize or commit to do any of the foregoing.,
Appears in 1 contract
Samples: Arrangement Agreement
Covenants of the Company Regarding the Conduct of Business. (1) The Company covenants and agrees that, until during the earlier of the Effective Time and the time that this Agreement is terminated in accordance with its termsInterim Period, unless the Purchaser otherwise consents in writing (to the extent that such consent is permitted by applicable Law), which consent will not be unreasonably withheld, conditioned or delayed, or expressly permitted or specifically contemplated by this Agreement, or as set out in the Exeter Disclosure Letter or as is otherwise required by applicable Law:
(a) the businesses of the Company shall conduct, and cause each Subsidiary to conduct, its subsidiaries will be conducted business only in the ordinary course of business and in accordance consistent with past practice, except
(a) as required or permitted by this Agreement, including the Pre-Acquisition Reorganization, if any;
(b) as required by applicable law; or
(c) with the Exeter Budgetexpress prior written consent of the Purchaser, (the exceptions noted at items (a) through (c) above are collectively referred to herein as, the “Permitted Exceptions”).
(2) Without limiting the generality of paragraph (1) above, and without derogating from the obligations of the Company in Section 4.3, during the Interim Period, subject to the Permitted Exceptions, the Company and shall use its subsidiaries will comply with the terms of all Material Contracts and the Company and its subsidiaries will use commercially reasonable efforts to maintain and preserve intact its and each Subsidiary’s business organizations, organization and goodwill and assets, properties, rights, goodwill and business relationships and keep available the services of the Company Employees and maintain satisfactory relationships with others having business relationships with the Company and each Subsidiary and shall not make any material change in the business, assets, liabilities, operations, insurance, capital or affairs of the Company. The Company shall comply in all material respects with all applicable laws.
(3) Without limiting the generality of paragraphs (1) above and (2) above, during the Interim Period, the Company shall not, subject to the Permitted Exceptions, undertake, cause or permit, and the Company shall cause its officersSubsidiaries, employees and consultants as a groupnot to undertake, cause or permit, any of the following:
(a) amend its constating documents or the terms of any of its securities;
(b) the Company will cooperate and consult through meetings with the Purchasersplit, as the Purchaser may reasonably request, to allow the Purchaser to monitor, and provide reasonable input with respect to the direction of, combine or reclassify any activities relating to the exploration and maintenance of Exeter Properties and discuss with the Purchaser prior to any required public disclosure of exploration results or other technical information provided nothing contained in this Section 4.1(b) shall prevent the Company from publicly disclosing any information required by Law or the rules or policies of the TSX or NYSE MKT after prior notice to the Purchaser and, other than as contemplated by the Exeter Budget, will not make any capital expenditures or other financial commitments in excess of $500,000 or $2,000,000 in the aggregateits securities;
(c) the Company will not, directly or indirectly:
(i) alter or amend the notice of articles, articles, charter, by-laws or other constating documents of the Company or its subsidiariesundertake any capital reorganization;
(iid) declare, set aside or pay any dividend on dividend, reduction of capital, or make other distribution (whether in cash, stock or property or any distribution combination thereof) or payment or return of capital in respect amend any term of any equity securities of the Company (outstanding debt security, other than dividends, distributions, payments dividends or return of capital made to the Company)distributions from a wholly-owned subsidiary;
(iiie) splitredeem, dividerepurchase, consolidateor otherwise acquire or offer to redeem, combine repurchase or reclassify the Exeter Shares or otherwise acquire any other securities of the Company or its subsidiariessecurities;
(ivf) issue, grantdeliver, sell or sell, pledge or otherwise encumber or authorize or agree to issuethe issuance, grantdelivery, sell or sale, pledge any Exeter Shares or other securities encumbrance with respect to any of its securities, any options, warrants or such similar rights exercisable or exchangeable for or convertible into securities, or payable by reference to the value of such securities, other than, in the case of the Company or its subsidiariesCompany, or securities convertible into or exchangeable or exercisable for, or otherwise evidencing a right to acquire, Exeter Shares or other securities of the Company or its subsidiaries, other than the issuance of Exeter Shares issuable pursuant to on the terms exercise of Exeter Options outstanding on the date hereof;
(vg) redeemadopt a plan of liquidation or resolutions providing for the liquidation, purchase dissolution, merger, consolidation, reorganization or otherwise acquire winding-up or subject to reorganize, amalgamate or merge with any Lien, any of its outstanding Exeter Shares or other securities or securities convertible into or exchangeable or exercisable for Exeter Shares or any such other securities or any shares or other securities of its subsidiariesthird party;
(vih) acquire (by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, in one transaction or in a series of related transactions, securities, properties, interests or businesses;
(i) sell, lease or otherwise transfer, in one transaction or in a series of related transactions, any assets, securities, properties, interests or businesses;
(j) make, in one transaction or in a series of related transactions, any loans, advances or capital contributions to, or investments in any third party Person, other than as set out to, or in, a wholly-owned subsidiary in the ordinary course of business consistent with past practice;
(k) make any capital expenditures in excess of, in the aggregate:
(i) $19 million, comprised of capital expenditures pursuant to either Approved AFEs or pursuant to anticipated expenditures disclosed in Section 4.1(c)(vi4.1(3)(k) of the Exeter Disclosure Letter; and
(ii) $3 million for vehicle finance lease purchases in the aggregate;
(l) incur any indebtedness (other than vehicle finance leases) that would cause:
(i) long-term indebtedness under the Credit Agreement to exceed $22 million; or
(ii) short-term indebtedness under the operating line of the Credit Agreement to exceed $8 million, provided that the Purchaser shall not unreasonably withhold its consent to the Company incurring additional short-term indebtedness for purposes consistent with the development of the Company’s business, as presently conducted;
(m) prepay any long-term indebtedness before its scheduled maturity, or create, incur, assume or otherwise become liable, in one transaction or in a series of related transactions, with respect to any indebtedness for borrowed money or guarantees thereof in any amount other than:
(i) indebtedness owing to it by a wholly-owned Subsidiary, or
(ii) borrowings and repayments under the Credit Agreement for working capital purposes in the ordinary course of business consistent with past practice;
(n) except as disclosed in Section 4.1(3)(n) of the Disclosure Letter, amend the terms of any securities existing Company Plan or the terms of any existing Contract to:
(i) increase any severance, change of control, bonus or termination pay to (or amend any existing arrangement with) any current or former Company Employee; or
(ii) increase the benefits payable under any existing severance or termination pay policies or employment agreements or any analogous agreements with any current or former director or officer;
(o) enter into any employment, deferred compensation or other similar agreement (or amend any such existing agreement) with any current or former director or officer of the Company or any of its subsidiariesSubsidiaries or, other than in the ordinary course of business consistent with past practice, any current or former Company Employee (other than a director or officer);
(viip) adopt a plan of liquidation grant, accelerate or resolution providing for the liquidation increase compensation, bonus levels or dissolution other benefits payable to any current or former director or officer of the Company or any of its subsidiariesSubsidiaries or, other than in the ordinary course of business consistent with past practice, any current or former Company Employee (other than a director or officer);
(viiiq) reorganize, amalgamate pay any benefit to any director or merge with officer of the Company or any other person and will not cause or permit of its subsidiaries to reorganize, amalgamate or merge with any other personSubsidiaries except as disclosed in Section 4.1(3)(q) of the Disclosure Letter;
(ixr) create other than the Officer Obligations, make or grant any subsidiary individual bonus, award or enter into the other incentive payment to any Contracts director or officer of the Company or any of its Subsidiaries;
(s) except as disclosed in Section 4.1(3)(s) of the Disclosure Letter, loan money or other arrangements regarding the control property to any present or management former director, officer or employee of the operationsCompany or any of its Subsidiaries;
(t) establish, adopt, enter into, amend or terminate any Company Plan (or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Plan if it were in existence as of the date hereof) or any Collective Agreement;
(u) grant any equity or equity-based awards (including the grant of Options);
(v) increase, or agree to increase, any funding obligation or accelerate, or agree to accelerate, the appointment timing of governing bodies any funding contribution under any Company Plan unless such increase is mandated or enter into required in accordance with the provisions of the applicable Company Plan;
(w) terminate the employment of any Joint VenturesCompany Employee except for cause or in the ordinary course of business consistent with past practice;
(x) make waive, release, assign, settle or compromise any material changes claim, litigation, proceeding or governmental investigation relating to any the business of its accounting policies, principles, methods, practices or procedures the Company;
(including by adopting any material new accounting policies, principles, methods, practices or procedures), y) except as disclosed in Section 4.1(3)(y) of the Public Disclosure RecordLetter, as required by applicable Laws other than in the ordinary course of business consistent with past practice, terminate, fail to renew (excluding the decision of a third party not to renew), cancel, waive, release, assign, grant or under IFRS; or
(xi) enter intotransfer any rights of material value or amend, modify or terminate change in any material respect any existing Material Contract;
(z) enter into any Contract with respect pricing terms on services to any of the foregoing;
(d) the Company will immediately notify the Purchaser orally and then promptly notify the Purchaser in writing of (i) any “material change” (as defined in the Securities Act) in relation to be provided by the Company or its subsidiaries, (ii) any event, circumstance or development that has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, (iii) any breach of this Agreement by the Company, or (iv) any event occurring after the date of this Agreement that would render a representation or warranty, if made on that date or the Effective Time, inaccurateSubsidiaries which are inconsistent with past practice;
(eaa) except as contemplated enter into any agreement or arrangement that limits or otherwise restricts in the Exeter Budget, the Company will not, and will not cause or permit its subsidiaries to, directly or indirectly, except in connection with this Agreement:
(i) sell, pledge, lease, licence, dispose of or encumber any assets or properties of material respect the Company or any of its subsidiaries related to the Material PropertySubsidiaries from competing in any location or with any Person;
(iibb) acquire (by merger, amalgamation, consolidation, arrangement or acquisition of shares or other equity securities or interests or assets or otherwise) any corporation, partnership, association or other business organization or division thereof or any property or asset, or make any investment by the purchase of securities, contribution of capital, property transfer, or purchase of any property or assets of any other person;
(iii) incur any expenses (except in the ordinary course of business consistent with past practice in the last 12 monthspractice, as required to exercise its rights and discharge its obligations under this Agreement, or as contemplated in the Exeter Budget) or incur any indebtedness for borrowed money or issue any debt securities, or assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other person, or make any loans or advances;
(iv) pay, discharge or satisfy any claim, liability or obligation prior to the same being due, other than the payment, discharge or satisfaction, in the ordinary course of business, of liabilities reflected or reserved against in the Financial Statements, or voluntarily waive, release, assign, settle or compromise any Proceeding;
(v) make any investment in or to Chile or any person or property located, domiciled or otherwise incorporated, as applicable, in Chile, including but not limited to, in the form of cash, cash equivalents, loan, purchase of securities, contribution of capital, property transfer or purchase of any property or assets (except in the ordinary course of business consistent with past practice in the last 12 months or as contemplated in the Exeter Budget);
(vi) engage in any new business, enterprise or other activity that is inconsistent with the existing businesses of the Company in the manner such existing businesses generally have been carried on or (as disclosed in the Public Disclosure Record) planned or proposed to be carried on prior to the date of this Agreement;
(vii) except as provided for in the Exeter Budget in respect of any Exeter Property or as are required by applicable Laws to maintain any Permits in good standing, expend or commit to expend any amounts with respect to expenses for such Exeter Property; or
(viii) authorize any of the foregoing, or enter into or modify any Contract to do any of the foregoing;
(f) the Company will not, and will not cause or permit its subsidiaries to, directly or indirectly, except in the ordinary course of business:
(i) terminate, fail to renew, cancel, waive, release, grant or transfer any rights of material value;
(ii) except in connection with matters otherwise permitted under this Section 4.1, enter into any Contract which would be a Material Contract if in existence on the date hereof, or terminate, cancel, extend, renew or amend, modify or change any Material Contract;
(iii) enter into any lease or sublease of real property (whether as a lessor, sublessor, lessee or sublessee), or modify, amend or exercise any right to renew any lease or sublease of real property or acquire any interest in real property; or
(iv) enter into any Contract containing any provision restricting or triggered by the Contemplated Transactions;
(g) Neither the Company nor its subsidiaries will, except in the ordinary course of business or pursuant to any existing Contracts or employment, pension, supplemental pension, termination or compensation arrangements or policies or plans in effect on the date hereof, and except as is necessary to comply with applicable Laws:
(i) grant to any officer, director, employee or consultant of the Company or its subsidiaries an increase in compensation in any form;
(ii) grant any general salary increase, fee or pay any bonus or other material compensation to the directors, officers, employees or consultants of the Company and its subsidiaries;
(iii) except as set out in Section 4.1(g)(iii) of the Exeter Disclosure Letter, take any action with respect to the grant or increase of any severance, change of control, retirement, retention or termination pay;
(iv) enter into or modify any employment or consulting agreement with any officer or director of the Company or its subsidiaries;
(v) terminate the employment or consulting arrangement of any senior management employees (including the Exeter Senior Management), except for cause;
(vi) increase any benefits payable under its current severance or termination pay policies;
(vii) other than as set out in Section 4.1(g)(vii) of the Exeter Disclosure Letter, adopt or amend or make any contribution to or any award under the Stock Option Plan, any restricted share unit plan, deferred share unit plan, performance share unit plan or other bonus, profit sharing, option, pension, retirement, deferred compensation, insurance, incentive compensation, compensation or other similar plan, agreement, trust, fund or arrangement for the benefit of directors or senior officers or former directors or senior officers of the Company or its subsidiaries; or
(viii) take any action to accelerate the time of payment of any compensation or benefits, amend or waive any performance or vesting criteria or accelerate vesting under the Stock Option Plan, except in accordance with its terms as contemplated herein or therein;
(h) neither the Company nor its subsidiaries will make any loan to any officer, director, employee or consultant of the Company or its subsidiaries;
(i) the Company will use its commercially reasonable efforts to cause the current insurance (or re-insurance) policies maintained by the Company, including directors’ and officers’ insurance, not to be cancelled or terminated and to prevent any of the coverage thereunder from lapsing, unless at the time of such termination, cancellation or lapse, replacement policies underwritten by insurance or re-insurance companies of nationally recognized standing having comparable deductions and providing coverage comparable to or greater than the coverage under the cancelled, terminated or lapsed policies for substantially similar premiums are in full force and effect, provided, however, that, except as contemplated by Section 4.8(b), the Company will not obtain or renew any insurance (or re-insurance) policy for a term exceeding 12 months;
(j) the Company will use commercially reasonable efforts to retain the services of its and its subsidiaries’ existing employees and consultants (including the Exeter Senior Management) and will promptly provide written notice to the Purchaser of the resignation or termination of any of its key employees or consultants;
(k) neither the Company nor its subsidiaries will make an application to amend, terminate, allow to expire or lapse or otherwise modify any of its Permits material Permits;
(cc) make any material change in its methods of accounting, except as required by concurrent changes to applicable accounting standards, or pursuant to written instructions, comments or orders from the Alberta Securities Commission or any other applicable Securities Authority;
(dd) enter into any interest rate, currency, equity or commodity swaps, xxxxxx, derivatives, forward sales contracts or similar financial instruments;
(ee) assume, guarantee or otherwise become liable with respect to the liabilities or obligations of any Person;
(ff) with respect to Taxes:
(i) change in any material respect any of its methods of reporting income or deductions or accounting for income tax purposes except as may be required by applicable law;
(ii) make, change or revoke any material election relating to Taxes;
(iii) settle, compromise or agree to the entry of judgment with respect to any proceeding relating to material Taxes;
(iv) surrender any rights to claim a material Tax refund;
(v) materially amend any Return;
(vi) enter into any Tax sharing, Tax allocation or Tax indemnification agreement;
(vii) make a request for a Tax ruling;
(viii) enter into any agreement with any Taxing Authorities; or
(ix) consent to any extension or waiver of any limitation period applicable to any Tax matters;
(gg) knowingly take any action or fail to take knowingly permit inaction or knowingly enter into any action which action or failure to act would result in the material loss, expiration or surrender of, or the loss of any material benefit under, or transaction that could reasonably be expected to cause have the effect of materially reducing or eliminating the amount of the tax cost “bump” pursuant to paragraphs 88(1)(c) and 88(1)(d) of the Tax Act in respect of the securities of any Governmental Authority to institute proceedings for affiliates or Subsidiaries and other non-depreciable capital property owned by the suspensionCompany or any of its Subsidiaries on the date hereof, revocation upon an amalgamation or limitation winding-up of rights under, the Company or any material Permit necessary to conduct of its businesses as now being conductedSubsidiaries (or any of their respective successors);
(lhh) commence any material litigation (other than litigation in connection with the collection of accounts receivable or to enforce the terms of this Agreement);
(ii) sell, license or otherwise transfer or encumber, in one transaction or in a series of related transactions, any of the Company Intellectual Property; or
(jj) agree, resolve, commit or announce any intention to do any of the foregoing.
(4) During the Interim Period, Company shall, and each of shall cause its subsidiaries will Subsidiaries to:
(ia) duly and timely file all Returns required to be filed by it on or after the date hereof and all such Returns will shall be true, complete and correct in all material respects and respects;
(iib) timely withhold, collect, remit and pay all material Taxes which are to be withheld, collected, remitted or paid by it to as and when required by applicable law.
(5) During the extent due and payable except for any Taxes contested Interim Period, the Company shall consult in good faith pursuant to applicable Lawson a reasonably regular basis with the Purchaser on operational, business and financial developments, the status of relationships with material customers, the general status of ongoing operations and other matters reasonably requested by the Purchaser.
(6) During the Interim Period, except as contemplated in Section 7.1, the Company will shall use its commercially reasonable efforts to cause the current insurance (or re-insurance) policies of the Company and each of its Subsidiaries not (A) change its tax accounting methods, principles to be cancelled or practices, except insofar as may have been required by a terminated or any of the coverage thereunder to lapse or change in IFRS or applicable Law, (B) settle, compromise or agree a manner adverse to the entry of judgment Company, unless simultaneously with respect such termination, cancellation, lapse or change, replacement policies providing coverage similar to any action, claim or other Proceeding relating to Taxes, (other greater than the paymentcoverage under the cancelled, discharge terminated, lapsed or satisfaction changed policies are in full force and effect.
(7) Forthwith upon the execution of this Agreement the Company shall:
(a) take such steps as are necessary to ensure that as at September 30, 2012, an additional $600,000 has been accrued and reserved by the Company to reflect potential additional liabilities reflected or reserved against of the Company and its Subsidiaries in respect of the Financial Statementsaudit currently being conducted by the IRS; and
(b) (C) use commercially reasonable efforts to negotiate and enter into any tax sharing, tax allocation or tax indemnification agreement, (D) make the Field Ticketing Side Letter in a request for a tax ruling form acceptable to any Governmental Authority, or (E) agree the Purchaser prior to any extension or waiver of the limitation period relating to any material Tax claim or assessment or reassessmentEffective Time;
(mc) the Company will not, and will not cause or permit its subsidiaries to, settle or compromise any action, claim or other Proceeding (i) brought against it for damages or providing for the grant of injunctive relief or other non-monetary remedy (“Litigation”) or (ii) brought by any present, former or purported holder of its securities in connection with the Contemplated Transactions;
(n) the Company will not, and will not cause or permit its subsidiaries to, commence any Litigation (other than litigation in connection with the collection of accounts receivable, take such steps as are necessary to enforce the terms of this Agreement or the Confidentiality Agreement, ensure that prior to enforce other obligations of the Purchaser or as a result of litigation commenced against the Company);
(o) the Company will not, and will not cause or permit its subsidiaries to, enter into or renew any Contract (i) containing (A) any limitation or restriction on the ability of the Company or its subsidiaries or, following the Effective Time, the ability Company has disposed of all securities of Solara Exploration Ltd. owned by the Purchaser Company or any of its affiliates, to engage in any type of activity or business, (B) any limitation or restriction on the manner in which, or the localities in which, all or any portion of the business of the Company or its subsidiaries or, following the Effective Time, all or any portion of the business of the Purchaser or any of its affiliates, is or would be conducted or (C) any limit or restriction on the ability of the Company or its subsidiaries or, following the Effective Time, the ability of the Purchaser or any of its affiliates, to solicit customers or employees, or (ii) that would reasonably be expected to prevent or significantly impede or materially delay the completion of the Contemplated Transactions;
(p) the Company will not, and will not cause or permit any of its subsidiaries to, take any action which would render, or which reasonably may be expected to render, any representation or warranty made by the Company in this Agreement untrue or inaccurate in any material respect (disregarding for this purpose all materiality or Material Adverse Effect qualifications contained therein) at any time prior to the Effective Time if then madeSubsidiaries; and
(qd) as is applicable, suspend the operation of the Company will not, and will not cause or permit its subsidiaries to, agree, announce, resolve, authorize or commit to do any of the foregoingDRIP.
Appears in 1 contract
Covenants of the Company Regarding the Conduct of Business. The Company covenants and agrees that, during the period from the date of this Agreement until the earlier of the Effective Time and the time that this Agreement is terminated in accordance with its terms, unless except as required or permitted by this Agreement, as required by applicable Law or consented to by the Purchaser otherwise consents Acquiror in writing (to the extent that such consent not to be unreasonably withheld, conditioned or delayed), the Company shall, and shall cause each of its subsidiaries to, use their commercially reasonable efforts to conduct its and their business in the ordinary course of business consistent with past practice and maintain its books, records and accounts. Without limiting the generality of the foregoing, during the period from the date of this Agreement until the earlier of the Effective Time and the time that this Agreement is terminated in accordance with its terms, except as required or permitted by applicable Law)this Agreement, the Company shall not, nor shall it permit any of its subsidiaries to, directly or indirectly, without the prior written consent of the Acquiror (which consent will shall not be unreasonably withheld, conditioned or delayed), or expressly permitted or specifically contemplated by this Agreement, or other than as set out in the Exeter Company Disclosure Letter or as is otherwise required by applicable LawLetter:
(a) the businesses of the Company and its subsidiaries will be conducted only in the ordinary course of business and in accordance with the Exeter Budget, the Company and its subsidiaries will comply with the terms of all Material Contracts and the Company and its subsidiaries will use commercially reasonable efforts to maintain and preserve intact its business organizations, assets, properties, rights, goodwill and business relationships and keep available the services of its officers, employees and consultants as a group;
(b) the Company will cooperate and consult through meetings with the Purchaser, as the Purchaser may reasonably request, to allow the Purchaser to monitor, and provide reasonable input with respect to the direction of, any activities relating to the exploration and maintenance of Exeter Properties and discuss with the Purchaser prior to any required public disclosure of exploration results or other technical information provided nothing contained in this Section 4.1(b) shall prevent the Company from publicly disclosing any information required by Law or the rules or policies of the TSX or NYSE MKT after prior notice to the Purchaser and, other than as contemplated by the Exeter Budget, will not make any capital expenditures or other financial commitments in excess of $500,000 or $2,000,000 in the aggregate;
(c) the Company will not, directly or indirectly:
(i) alter or amend the notice of its articles, articles, charter, charter or by-laws or other constating documents comparable organizational documents; (ii) split, combine or reclassify any shares in the capital of the Company or any of its subsidiaries;
(ii) , or declare, set aside or pay any dividend on or make any other distribution or payment (whether in cash, securities or return of capital property or any combination thereof) in respect of the Company Shares owned by any equity person or the securities of any subsidiary owned by a person other than the Company (other than dividendsthan, distributionsin the case of any subsidiary wholly-owned by the Company, payments or return of capital made any dividends payable to the Company);
(iii) split, divide, consolidate, combine or reclassify the Exeter Shares Company or any other securities wholly-owned subsidiary of the Company or its subsidiaries;
Company; (iviii) issue, grant, deliver, sell or pledge or authorize pledge, or agree to issue, grant, deliver, sell or pledge pledge, any Exeter Shares or other securities Company Options, Company Standalone Options, Company Warrants, shares of the Company or its subsidiaries, or securities any rights convertible into or exchangeable or exercisable for, or otherwise evidencing a right to acquire, Exeter Shares shares or other securities of the Company or its subsidiaries, other than than: (A) the issuance of Exeter the Company Shares issuable pursuant to the terms of Exeter the outstanding Company Options, Company Standalone Options outstanding on or Company Warrants; (B) transactions in the date hereof;
ordinary course of business and consistent with past practices between two or more Company wholly-owned subsidiaries or between the Company and a Company wholly- owned subsidiary; and (vC) as required under applicable Law or existing Material Contracts set forth in Schedule 4.22 of the Company Disclosure Letter; (iv) redeem, purchase or otherwise acquire acquire, or subject offer to redeem, purchase or otherwise acquire, any Lien, outstanding securities of the Company or any of its outstanding Exeter Shares or other securities or securities convertible into or exchangeable or exercisable for Exeter Shares or any such other securities or any shares or other securities of its subsidiaries;
, (viv) other than as set out in Section 4.1(c)(vi) of the Exeter Disclosure Letter, amend the terms of any securities of the Company or its subsidiaries;
securities; (viivi) adopt a plan of liquidation or resolution providing for the liquidation or dissolution of the Company or its subsidiaries;
(viii) reorganize, amalgamate or merge with any other person and will not cause or permit its subsidiaries to reorganize, amalgamate or merge with any other person;
(ix) create any subsidiary or enter into any Contracts or other arrangements regarding the control or management of the operations, or the appointment of governing bodies or enter into any Joint Ventures;
(x) make any material changes to any of its accounting policies, principles, methods, practices or procedures (including by adopting any material new accounting policies, principles, methods, practices or procedures), except as disclosed in the Public Disclosure Record, as required by applicable Laws or under IFRS; or
(xi) enter into, modify or terminate any Contract with respect to any of the foregoing;
(d) the Company will immediately notify the Purchaser orally and then promptly notify the Purchaser in writing of (i) any “material change” (as defined in the Securities Act) in relation to the Company or its subsidiaries, (ii) any event, circumstance or development that has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, (iii) any breach of this Agreement by the Company, or (iv) any event occurring after the date of this Agreement that would render a representation or warranty, if made on that date or the Effective Time, inaccurate;
(e) except as contemplated in the Exeter Budget, the Company will not, and will not cause or permit its subsidiaries to, directly or indirectly, except in connection with this Agreement:
(i) sell, pledge, lease, licence, dispose of or encumber any assets or properties of the Company or its subsidiaries related to the Material Property;
(ii) acquire (by merger, amalgamation, consolidation, arrangement or acquisition of shares or other equity securities or interests or assets or otherwise) any corporation, partnership, association or other business organization or division thereof or any property or asset, or make any investment by the purchase of securities, contribution of capital, property transfer, or purchase of any property or assets of any other person;
(iii) incur any expenses (except in the ordinary course of business consistent with past practice in the last 12 months, as required to exercise its rights and discharge its obligations under this Agreement, or as contemplated in the Exeter Budget) or incur any indebtedness for borrowed money or issue any debt securities, or assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other person, or make any loans or advances;
(iv) pay, discharge or satisfy any claim, liability or obligation prior to the same being due, other than the payment, discharge or satisfaction, in the ordinary course of business, of liabilities reflected or reserved against in the Financial Statements, or voluntarily waive, release, assign, settle or compromise any Proceeding;
(v) make any investment in or to Chile or any person or property located, domiciled or otherwise incorporated, as applicable, in Chile, including but not limited to, in the form of cash, cash equivalents, loan, purchase of securities, contribution of capital, property transfer or purchase of any property or assets (except in the ordinary course of business consistent with past practice in the last 12 months or as contemplated in the Exeter Budget);
(vi) engage in any new business, enterprise or other activity that is inconsistent with the existing businesses of the Company in the manner such existing businesses generally have been carried on or (as disclosed in the Public Disclosure Record) planned or proposed to be carried on prior to the date of this Agreement;
(vii) except as provided for in the Exeter Budget in respect of any Exeter Property or as are required by applicable Laws to maintain any Permits in good standing, expend or commit to expend any amounts with respect to expenses for such Exeter Property; or
(viii) authorize any of the foregoing, or enter into or modify any Contract to do any of the foregoing;
(f) the Company will not, and will not cause or permit its subsidiaries to, directly or indirectly, except in the ordinary course of business:
(i) terminate, fail to renew, cancel, waive, release, grant or transfer any rights of material value;
(ii) except in connection with matters otherwise permitted under this Section 4.1, enter into any Contract which would be a Material Contract if in existence on the date hereof, or terminate, cancel, extend, renew or amend, modify or change any Material Contract;
(iii) enter into any lease or sublease of real property (whether as a lessor, sublessor, lessee or sublessee), or modify, amend or exercise any right to renew any lease or sublease of real property or acquire any interest in real property; or
(iv) enter into any Contract containing any provision restricting or triggered by the Contemplated Transactions;
(g) Neither the Company nor its subsidiaries will, except in the ordinary course of business or pursuant to any existing Contracts or employment, pension, supplemental pension, termination or compensation arrangements or policies or plans in effect on the date hereof, and except as is necessary to comply with applicable Laws:
(i) grant to any officer, director, employee or consultant of the Company or its subsidiaries an increase in compensation in any form;
(ii) grant any general salary increase, fee or pay any bonus or other material compensation to the directors, officers, employees or consultants of the Company and its subsidiaries;
(iii) except as set out in Section 4.1(g)(iii) of the Exeter Disclosure Letter, take any action with respect to the grant or increase of any severance, change of control, retirement, retention or termination pay;
(iv) enter into or modify any employment or consulting agreement with any officer or director of the Company or its subsidiaries;
(v) terminate the employment or consulting arrangement of any senior management employees (including the Exeter Senior Management), except for cause;
(vi) increase any benefits payable under its current severance or termination pay policies;
(vii) other than as set out in Section 4.1(g)(vii) of the Exeter Disclosure Letter, adopt or amend or make any contribution to or any award under the Stock Option Plan, any restricted share unit plan, deferred share unit plan, performance share unit plan or other bonus, profit sharing, option, pension, retirement, deferred compensation, insurance, incentive compensation, compensation or other similar plan, agreement, trust, fund or arrangement for the benefit of directors or senior officers or former directors or senior officers of the Company or its subsidiaries; or
(viii) take any action to accelerate the time of payment of any compensation or benefits, amend or waive any performance or vesting criteria or accelerate vesting under the Stock Option Plan, except in accordance with its terms as contemplated herein or therein;
(h) neither the Company nor its subsidiaries will make any loan to any officer, director, employee or consultant of the Company or its subsidiaries;
(i) the Company will use its commercially reasonable efforts to cause the current insurance (or re-insurance) policies maintained by the Company, including directors’ and officers’ insurance, not to be cancelled or terminated and to prevent any of the coverage thereunder from lapsing, unless at the time of such termination, cancellation or lapse, replacement policies underwritten by insurance or re-insurance companies of nationally recognized standing having comparable deductions and providing coverage comparable to or greater than the coverage under the cancelled, terminated or lapsed policies for substantially similar premiums are in full force and effect, provided, however, that, except as contemplated by Section 4.8(b), the Company will not obtain or renew any insurance (or re-insurance) policy for a term exceeding 12 months;
(j) the Company will use commercially reasonable efforts to retain the services of its and its subsidiaries’ existing employees and consultants (including the Exeter Senior Management) and will promptly provide written notice to the Purchaser of the resignation or termination of any of its key employees or consultants;
(k) neither the Company nor its subsidiaries will make an application to amend, terminate, allow to expire or lapse or otherwise modify any of its Permits or take any action or fail to take any action which action or failure to act would result in the material loss, expiration or surrender of, or the loss of any material benefit under, or reasonably be expected to cause any Governmental Authority to institute proceedings for the suspension, revocation or limitation of rights under, any material Permit necessary to conduct its businesses as now being conducted;
(l) the Company and each of its subsidiaries will (i) duly and timely file all Returns required to be filed by it on or after the date hereof and all such Returns will be true, complete and correct in all material respects and (ii) timely withhold, collect, remit and pay all Taxes which are to be withheld, collected, remitted or paid by it to the extent due and payable except for any Taxes contested in good faith pursuant to applicable Laws, and the Company will not (A) change its tax accounting methods, principles or practices, except insofar as may have been required by a change in IFRS or applicable Law, (B) settle, compromise or agree to the entry of judgment with respect to any action, claim or other Proceeding relating to Taxes, (other than the payment, discharge or satisfaction of liabilities reflected or reserved against in the Financial Statements) (C) enter into any tax sharing, tax allocation or tax indemnification agreement, (D) make a request for a tax ruling to any Governmental Authority, or (E) agree to any extension or waiver of the limitation period relating to any material Tax claim or assessment or reassessment;
(m) the Company will not, and will not cause or permit its subsidiaries to, settle or compromise any action, claim or other Proceeding (i) brought against it for damages or providing for the grant of injunctive relief or other non-monetary remedy (“Litigation”) or (ii) brought by any present, former or purported holder of its securities in connection with the Contemplated Transactions;
(n) the Company will not, and will not cause or permit its subsidiaries to, commence any Litigation (other than litigation in connection with the collection of accounts receivable, to enforce the terms of this Agreement or the Confidentiality Agreement, to enforce other obligations of the Purchaser or as a result of litigation commenced against the Company);
(o) the Company will not, and will not cause or permit its subsidiaries to, enter into or renew any Contract (i) containing (A) any limitation or restriction on the ability of the Company or its subsidiaries or, following the Effective Time, the ability of the Purchaser or any of its affiliates, to engage in any type of activity or business, (B) any limitation or restriction on the manner in which, or the localities in which, all or any portion of the business of the Company or its subsidiaries or, following the Effective Time, all or any portion of the business of the Purchaser or any of its affiliates, is or would be conducted or (C) any limit or restriction on the ability of the Company or its subsidiaries or, following the Effective Time, the ability of the Purchaser or any of its affiliates, to solicit customers or employees, or (ii) that would reasonably be expected to prevent or significantly impede or materially delay the completion of the Contemplated Transactions;
(p) the Company will not, and will not cause or permit any of its subsidiaries to, take any action which would render, or which reasonably may be expected to render, any representation or warranty made by the Company in this Agreement untrue or inaccurate in any material respect (disregarding for this purpose all materiality or Material Adverse Effect qualifications contained therein) at any time prior to the Effective Time if then made; and
(q) as is applicable, the Company will not, and will not cause or permit its subsidiaries to, agree, announce, resolve, authorize or commit to do any of the foregoing.
Appears in 1 contract
Samples: Arrangement Agreement
Covenants of the Company Regarding the Conduct of Business. The Company covenants and agrees that, until the earlier of prior to the Effective Time and the time that this Agreement is terminated in accordance with its termsTime, unless the Purchaser Acquiror shall otherwise consents agree in writing (writing, such agreement not to the extent that such consent is permitted by applicable Law), which consent will not be unreasonably withheld, conditioned delayed or delayedconditioned, or as otherwise expressly contemplated or permitted or specifically contemplated by this Agreement, or as set out in the Exeter Disclosure Letter or as is otherwise required by applicable LawCompany shall:
(a) conduct its business only in, not take any action except in, and maintain its facilities in, the businesses of the Company usual, ordinary and its subsidiaries will be conducted only in the ordinary regular course of business consistent with past practice and in accordance with the Exeter Budget, the Company and its subsidiaries will comply with the terms of all Material Contracts and the Company and its subsidiaries will use commercially reasonable efforts to maintain and to: (i) preserve intact its present business organizationsorganization, assetsassets (including intellectual property) and goodwill; (ii) maintain its real property interests (including title to, propertiesand leasehold interests in respect of, rights, goodwill and business relationships and any real property) in good standing; (iii) keep available the services of its officers, officers and employees and consultants as a group; and (iv) preserve the current relationships with consultants, and others having business relationships with it;
(b) the Company will cooperate and consult through meetings with the Purchaser, as the Purchaser may reasonably request, to allow the Purchaser to monitor, and provide reasonable input with respect to the direction of, any activities relating to the exploration and maintenance of Exeter Properties and discuss with the Purchaser prior to any required public disclosure of exploration results or other technical information provided nothing contained in this Section 4.1(b) shall prevent the Company from publicly disclosing any information required by Law or the rules or policies of the TSX or NYSE MKT after prior notice to the Purchaser and, other than as contemplated by the Exeter Budget, will not make any capital expenditures or other financial commitments in excess of $500,000 or $2,000,000 in the aggregate;
(c) the Company will not, directly or indirectly:
(i) issue, sell, pledge, lease, dispose of, encumber or agree to issue, sell, pledge, lease, dispose of or encumber: (A) any additional shares of, or any options, warrants, calls, conversion privileges or rights of any kind to acquire any shares or other securities of, the Company (other than the issuance of Common Shares pursuant to the exercise in accordance with their terms of Options or Warrants currently outstanding); or (B) any assets of the Company;
(ii) amend or agree to amend any of the terms of any of the Options or the Warrants, or amend, extend, terminate or otherwise alter (or agree to do any of the foregoing in respect of) any other contractual arrangement of the Company;
(iii) amend or propose to amend the notice of articles, articles, charter, by-laws or other constating documents of the Company or its subsidiariesCompany;
(iiiv) split, combine or reclassify any outstanding Common Shares or declare, set aside or pay any dividend on or make any other distribution in cash, stock, property or payment or return of capital in otherwise with respect of any equity securities of the Company (other than dividends, distributions, payments or return of capital made to the Company);
(iii) split, divide, consolidate, combine or reclassify the Exeter Shares or any other securities of the Company or its subsidiaries;
(iv) issue, grant, sell or pledge or authorize or agree to issue, grant, sell or pledge any Exeter Shares or other securities of the Company or its subsidiaries, or securities convertible into or exchangeable or exercisable for, or otherwise evidencing a right to acquire, Exeter Shares or other securities of the Company or its subsidiaries, other than the issuance of Exeter Shares issuable pursuant to the terms of Exeter Options outstanding on the date hereofCommon Shares;
(v) redeem, purchase or otherwise acquire or subject offer to purchase any Lien, any of its outstanding Exeter Common Shares or other securities or securities convertible into or exchangeable or exercisable for Exeter Shares or any such other securities or any shares or other securities of its subsidiariesthe Company;
(vi) other than as set out in Section 4.1(c)(vi) reorganize, amalgamate or merge by plan of the Exeter Disclosure Letter, amend the terms of any securities of arrangement or otherwise the Company with any other person, company, partnership or its other business organization whatsoever or incorporate any subsidiaries;
(vii) adopt a plan of liquidation or resolution providing for reduce the liquidation or dissolution stated capital of the Company or its subsidiariesCompany;
(viii) reorganize, amalgamate acquire or merge with any other person and will not cause or permit its subsidiaries agree to reorganize, amalgamate or merge with any other person;
(ix) create any subsidiary or enter into any Contracts or other arrangements regarding the control or management of the operations, or the appointment of governing bodies or enter into any Joint Ventures;
(x) make any material changes to any of its accounting policies, principles, methods, practices or procedures (including by adopting any material new accounting policies, principles, methods, practices or procedures), except as disclosed in the Public Disclosure Record, as required by applicable Laws or under IFRS; or
(xi) enter into, modify or terminate any Contract with respect to any of the foregoing;
(d) the Company will immediately notify the Purchaser orally and then promptly notify the Purchaser in writing of (i) any “material change” (as defined in the Securities Act) in relation to the Company or its subsidiaries, (ii) any event, circumstance or development that has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, (iii) any breach of this Agreement by the Company, or (iv) any event occurring after the date of this Agreement that would render a representation or warranty, if made on that date or the Effective Time, inaccurate;
(e) except as contemplated in the Exeter Budget, the Company will not, and will not cause or permit its subsidiaries to, directly or indirectly, except in connection with this Agreement:
(i) sell, pledge, lease, licence, dispose of or encumber any assets or properties of the Company or its subsidiaries related to the Material Property;
(ii) acquire (by merger, amalgamation, consolidationplan of arrangement, arrangement or acquisition of shares or other equity securities or interests or assets or otherwise) any corporationcompany, partnership, association partnership or other business organization or division thereof division, or incorporate or form any property company, partnership or asset, other business organization or make any investment either by the purchase of shares or securities, contribution contributions of capital, property transfer, transfer or purchase of any property or assets of any other person, company, partnership or other business organization;
(iiiix) enter into or agree to the terms of any joint venture or similar agreement, arrangement or relationship;
(x) incur any expenses (except in the ordinary course of business consistent with past practice in the last 12 months, as required or commit to exercise its rights and discharge its obligations under this Agreement, or as contemplated in the Exeter Budget) or incur any indebtedness for borrowed money money, capital expenditures, or any other material liability, contractual commitment or obligation or issue any debt securities;
(xi) enter into any agreement with, or assumemake any payments to, guaranteeany Related Party of the Company other than the Xxxxx Fee;
(xii) endorse, endorse or otherwise as an accommodation become responsible for for, the obligations of any other person, company, partnership or other business organization, or make any loans or advances;
(ivxiii) adopt a plan of liquidation or resolutions providing for the liquidation or dissolution of the Company;
(xiv) take any action or enter into any transaction that would preclude the Acquiror from obtaining the tax “bump”, determined under paragraph 88(1)(d) of the Tax Act, in respect of the non-depreciable capital property of the Company upon a wind-up, or amalgamation with, the Company;
(xv) pay, discharge or satisfy any claimmaterial claims, liability liabilities or obligation prior to the same being due, obligations other than the payment, discharge or satisfaction, in the ordinary course of businessbusiness consistent with past practice, of liabilities reflected or reserved against in the Financial Statements, Company's financial statements or voluntarily waive, release, assign, settle or compromise any Proceeding;
(v) make any investment in or to Chile or any person or property located, domiciled or otherwise incorporated, as applicable, in Chile, including but not limited to, in the form of cash, cash equivalents, loan, purchase of securities, contribution of capital, property transfer or purchase of any property or assets (except incurred in the ordinary course of business consistent with past practice in the last 12 months or as contemplated in the Exeter Budget)practice;
(vixvi) engage in authorize, recommend, propose or agree to any new business, enterprise release or relinquishment of any material contractual right or other activity that is inconsistent with the existing businesses of the Company in the manner such existing businesses generally have been carried on material right under any licence or (as disclosed in the Public Disclosure Record) planned permit or proposed to be carried on prior to the date of this Agreementmaterial contract;
(viixvii) except as provided abandon or fail to diligently pursue any application for in the Exeter Budget in respect of any Exeter Property material licence, permit, order, authorization, consent, approval or as are required by applicable Laws registration which is currently pending or contemplated to maintain any Permits in good standing, expend be sought or commit to expend any amounts with respect to expenses for such Exeter Property; or
(viii) authorize any of the foregoing, or enter into or modify any Contract to do any of the foregoingrequired;
(fxviii) the Company will not, and will not cause or permit its subsidiaries to, directly or indirectly, except in the ordinary course of business:
(i) terminate, fail to renew, cancel, waive, release, grant or transfer any rights of material value;
(ii) except in connection with matters otherwise permitted under this Section 4.1, enter into any Contract which would be a Material Contract if in existence on the date hereof, value or terminate, cancel, extend, renew or amend, modify or change in any Material Contract;
(iii) enter into material respect any lease existing licence, lease, permit, material contract or sublease of real property (whether as a lessorother material document, sublessor, lessee or sublessee), or modify, amend or exercise any right to renew any lease or sublease of real property or acquire any interest in real property; or
(iv) enter into any Contract containing any provision restricting or triggered by the Contemplated Transactions;
(g) Neither the Company nor its subsidiaries will, except other than in the ordinary course of business consistent with past practice; or
(xix) enter into new commitments of a capital expenditure nature or pursuant incur any new contingent liabilities;
(c) not enter into or modify any employment, consulting, severance, change of control or similar agreements or arrangements with, or grant any bonuses, salary or fee increases, severance or termination pay to, any officers or directors or, in the case of employees or consultants who are not officers or directors, take any action other than in the ordinary, regular and usual course of business and consistent with past practice (none of which actions shall be unreasonable or unusual) with respect to the grant of any bonuses, salary or fee increases, severance or termination pay or with respect to any existing Contracts or employment, pension, supplemental pension, termination or compensation arrangements or policies or plans increase of benefits payable in effect on the date hereofhereof and shall not pay or agree to pay any bonuses, and except as is necessary to comply with applicable Laws:
(i) grant salary or fee increases, severance or termination pay to any director, officer, director, employee or consultant of in connection with the Company or its subsidiaries an increase in compensation in any formtransactions contemplated by this Agreement;
(iid) grant any general salary increase, fee or pay any bonus or other material compensation to the directors, officers, employees or consultants of the Company and its subsidiaries;
(iii) except as set out in Section 4.1(g)(iii) of the Exeter Disclosure Letter, take any action with respect to the grant or increase of any severance, change of control, retirement, retention or termination pay;
(iv) enter into or modify any employment or consulting agreement with any officer or director of the Company or its subsidiaries;
(v) terminate the employment or consulting arrangement of any senior management employees (including the Exeter Senior Management), except for cause;
(vi) increase any benefits payable under its current severance or termination pay policies;
(vii) other than as set out in Section 4.1(g)(vii) of the Exeter Disclosure Letter, not adopt or amend or make any contribution to or any award under the Stock Option Plan, any restricted share unit plan, deferred share unit plan, performance share unit plan or other bonus, profit sharing, incentive, compensation, stock option, pension, retirement, deferred compensation, insurance, incentive compensation, compensation employment or other similar employee benefit plan, agreement, trust, fund or arrangement for the benefit of directors or senior officers or former directors or senior officers of the Company or its subsidiaries; or
(viii) take any action to accelerate the time of payment welfare of any compensation or benefits, amend or waive any performance or vesting criteria or accelerate vesting under the Stock Option Plan, except in accordance with its terms as contemplated herein or thereinemployee;
(he) neither the Company nor its subsidiaries will make any loan to any officer, director, employee or consultant of the Company or its subsidiaries;
(i) the Company will use its commercially reasonable efforts to cause the current insurance (or re-insurance) policies maintained by the Company, including directors’ and officers’ insurance, not to be cancelled or terminated and to prevent any of the coverage thereunder from lapsing, unless at the time of such termination, cancellation or lapse, replacement policies underwritten by insurance or re-insurance companies of nationally recognized standing having comparable deductions and providing coverage comparable to or greater than the coverage under the cancelled, terminated or lapsed policies for substantially similar premiums are in full force and effect, provided, however, that, except as contemplated by Section 4.8(b), the Company will not obtain or renew any insurance (or re-insurance) policy for a term exceeding 12 months;
(j) the Company will use commercially reasonable efforts to retain the services of its and its subsidiaries’ existing employees and consultants (including the Exeter Senior Management) and will promptly provide written notice to the Purchaser of the resignation or termination of any of its key employees or consultants;
(k) neither the Company nor its subsidiaries will make an application to amend, terminate, allow to expire or lapse or otherwise modify any of its Permits or take any action or fail to take any action which action or failure to act would result in the material loss, expiration or surrender of, or the loss of any material benefit under, or reasonably be expected to cause any Governmental Authority to institute proceedings for the suspension, revocation or limitation of rights under, any material Permit necessary to conduct its businesses as now being conducted;
(l) the Company and each of its subsidiaries will (i) duly and timely file all Returns required to be filed by it on or after the date hereof and all such Returns will be true, complete and correct in all material respects and (ii) timely withhold, collect, remit and pay all Taxes which are to be withheld, collected, remitted or paid by it to the extent due and payable except for any Taxes contested in good faith pursuant to applicable Laws, and the Company will not (A) change its tax accounting methods, principles or practices, except insofar as may have been required by a change in IFRS or applicable Law, (B) settle, compromise or agree to the entry of judgment with respect to any action, claim or other Proceeding relating to Taxes, (other than the payment, discharge or satisfaction of liabilities reflected or reserved against in the Financial Statements) (C) enter into any tax sharing, tax allocation or tax indemnification agreement, (D) make a request for a tax ruling to any Governmental Authority, or (E) agree to any extension or waiver of the limitation period relating to any material Tax claim or assessment or reassessment;
(m) the Company will not, and will not cause or permit its subsidiaries to, settle or compromise any action, claim or other Proceeding (i) brought against it for damages or providing for the grant of injunctive relief or other non-monetary remedy (“Litigation”) or (ii) brought by any present, former or purported holder of its securities in connection with the Contemplated Transactions;
(n) the Company will not, and will not cause or permit its subsidiaries to, commence any Litigation (other than litigation in connection with the collection of accounts receivable, to enforce the terms of this Agreement or the Confidentiality Agreement, to enforce other obligations of the Purchaser or as a result of litigation commenced against the Company);
(o) the Company will not, and will not cause or permit its subsidiaries to, enter into or renew any Contract (i) containing (A) any limitation or restriction on the ability of the Company or its subsidiaries or, following the Effective Time, the ability of the Purchaser or any of its affiliates, to engage in any type of activity or business, (B) any limitation or restriction on the manner in which, or the localities in which, all or any portion of the business of the Company or its subsidiaries or, following the Effective Time, all or any portion of the business of the Purchaser or any of its affiliates, is or would be conducted or (C) any limit or restriction on the ability of the Company or its subsidiaries or, following the Effective Time, the ability of the Purchaser or any of its affiliates, to solicit customers or employees, or (ii) that would reasonably be expected to prevent or significantly impede or materially delay the completion of the Contemplated Transactions;
(p) the Company will not, and will not cause or permit any of its subsidiaries to, take any action which would render, or which reasonably may be expected to render, any representation or warranty made by the Company it in this Agreement untrue or inaccurate in any material respect (disregarding for this purpose all materiality or Material Adverse Effect qualifications contained therein) at any time prior to the Effective Time if then made; and, and promptly notify the Acquiror first immediately orally and then promptly in writing of the occurrence of any event or condition that has, or is reasonably likely to have, a Material Adverse Effect in respect of the Company in the course of its business or in the operation of its properties and of any material governmental or third party complaints, investigations or hearings (or communications indicating that the same may be contemplated);
(qf) as is applicable, the Company will not, and will not cause or permit its subsidiaries to, agree, announce, resolve, authorize or commit propose or enter into or modify any contract, agreement, commitment or arrangement to do any of the foregoingmatters prohibited by the other paragraphs of this Section 5.1;
(g) not enter into or adopt any shareholder rights plan or similar agreement or arrangement;
(h) (i) duly and timely file all Tax Returns required to be filed by it on or after the date hereof and all such Tax Returns shall be true, complete and correct in all material respects, (ii) timely pay all Taxes which are due and payable, (iii) not make or rescind any material express or deemed election relating to Taxes, (iv) not make a request for a Tax ruling or enter into a closing agreement with any taxing authorities, (v) not settle or compromise any claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to Taxes, and (vi) not change in any material respect any of its methods of reporting losses, deductions or accounting for income tax purposes from those employed in the preparation of its Tax Return for the taxation year ending December 31, 2014, except as may be required by applicable Law;
(i) not engage in any business, enterprise or other activity different from that carried on by it at the date of this Agreement that would reasonably be expected to have a Material Adverse Effect on the Company; and
(j) make or cooperate as necessary in the making of all necessary filings and applications under all applicable Law required in connection with the transactions contemplated herein and take all reasonable action necessary to be in compliance with such Laws.
Appears in 1 contract
Samples: Arrangement Agreement (Northern Dynasty Minerals LTD)
Covenants of the Company Regarding the Conduct of Business. The Company covenants and agrees that, as follows from the date of this Agreement until the earlier of the Effective Time and or the time that date on which this Agreement is terminated in accordance with its termsArticle 7, unless in each case except (x) with the Purchaser otherwise consents in writing (to the extent that such consent is permitted by applicable Law)of Parent, which consent will shall not be unreasonably withheld, conditioned or delayed, (y) with respect to any matters which are disclosed in the Disclosure Letter or expressly (z) as otherwise permitted or specifically contemplated by this Agreement, Agreement or the Arrangement or as set may be required to carry out in the Exeter Disclosure Letter transactions contemplated by this Agreement or as is otherwise may be required by applicable Lawto facilitate compliance with any Laws:
(a) the businesses each of the Company and its subsidiaries will be conducted only in the ordinary course Subsidiaries shall, for the purpose of business endeavouring to maintain the Company’s goodwill and in accordance with the Exeter Budgetongoing business, the Company and its subsidiaries will comply with the terms of all Material Contracts and the Company and its subsidiaries will use commercially reasonable efforts to maintain and preserve intact (i) carry on its business organizationsbusinesses in the ordinary course consistent with past practice, assets, properties, rights, goodwill and business relationships and (ii) keep available the services of its officerscurrent officers and Employees, employees and consultants as a group(iii) maintain good relations with customers and suppliers;
(b) the Company will cooperate shall not, nor shall it permit any of the Subsidiaries to, (i) split, combine, subdivide or reclassify any of its share capital 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 share capital; (ii) issue, reserve, set aside, repurchase, redeem or otherwise acquire any shares of its share capital or any securities or obligations convertible into, exercisable or exchangeable for, or any rights, warrants, calls, subscriptions or options to acquire, shares of its share capital or authorize any of the foregoing; or (iii) authorize any of the foregoing, in each case other than pursuant to (A) Options issued prior to the date of this Agreement, (B) Options issued to new employees of the Company and consult through meetings the Subsidiaries after the date of this Agreement in the ordinary course of business not to exceed Options for 250,000 Common Shares, or (C) in compliance with the Purchaser, as the Purchaser may reasonably request, to allow the Purchaser to monitor, and provide reasonable input with respect to the direction of, any activities relating to the exploration and maintenance terms of Exeter Properties and discuss with the Purchaser prior to any required public disclosure of exploration results or other technical information provided nothing contained in this Section 4.1(b) shall prevent the Company from publicly disclosing any information required by Law or the rules or policies of the TSX or NYSE MKT after prior notice to the Purchaser and, other than as contemplated by the Exeter Budget, will not make any capital expenditures or other financial commitments in excess of $500,000 or $2,000,000 in the aggregateAgreement;
(c) the Company will shall not, directly or indirectly:
(i) alter or amend the notice of articles, articles, charter, by-laws or other constating documents nor shall it permit any of the Company or its subsidiaries;
(ii) Subsidiaries to, declare, set aside for payment or pay any dividend on or make any other distribution or payment or return of capital in respect of any equity securities Common Shares unless the Consideration payable to each holder of Common Shares shall be reduced by the Company (other than dividends, distributions, payments amount of such dividend or return distribution paid in respect of capital made to the Company);
(iii) split, divide, consolidate, combine or reclassify the Exeter Shares or any other securities of the Company or its subsidiaries;
(iv) issue, grant, sell or pledge or authorize or agree to issue, grant, sell or pledge any Exeter Shares or other securities of the Company or its subsidiaries, or securities convertible into or exchangeable or exercisable for, or otherwise evidencing a right to acquire, Exeter Shares or other securities of the Company or its subsidiaries, other than the issuance of Exeter Shares issuable pursuant to the terms of Exeter Options outstanding on the date hereof;
(v) redeem, purchase or otherwise acquire or subject to any Lien, any of its outstanding Exeter Shares or other securities or securities convertible into or exchangeable or exercisable for Exeter Shares or any such other securities or any shares or other securities of its subsidiaries;
(vi) other than as set out in Section 4.1(c)(vi) of the Exeter Disclosure Letter, amend the terms of any securities of the Company or its subsidiaries;
(vii) adopt a plan of liquidation or resolution providing for the liquidation or dissolution of the Company or its subsidiaries;
(viii) reorganize, amalgamate or merge with any other person and will not cause or permit its subsidiaries to reorganize, amalgamate or merge with any other person;
(ix) create any subsidiary or enter into any Contracts or other arrangements regarding the control or management of the operations, or the appointment of governing bodies or enter into any Joint Ventures;
(x) make any material changes to any of its accounting policies, principles, methods, practices or procedures (including by adopting any material new accounting policies, principles, methods, practices or procedures), except as disclosed in the Public Disclosure Record, as required by applicable Laws or under IFRS; or
(xi) enter into, modify or terminate any Contract with respect to any of the foregoingthose Common Shares;
(d) the Company will immediately notify shall not, nor shall it permit any of the Purchaser orally and then promptly notify the Purchaser in writing of (i) any “material change” (as defined in the Securities Act) in relation to the Company or Subsidiaries to, amend its subsidiaries, (ii) any event, circumstance or development that has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, (iii) any breach of this Agreement by the Company, or (iv) any event occurring after the date of this Agreement that would render a representation or warranty, if made on that date or the Effective Time, inaccurateconstating documents;
(e) except as contemplated in the Exeter Budget, the Company will shall not, and will not cause or nor shall it permit its subsidiaries any of the Subsidiaries to, directly or indirectly, except in connection with this Agreement:
(i) sell, pledge, leaseencumber, licence, lease (whether such lease is an operating or capital lease or a sale and lease back of assets) or otherwise dispose of or encumber any material assets or properties of the Company or its subsidiaries related to the Material Property;
(ii) acquire (by merger, amalgamation, consolidation, arrangement or acquisition of shares or other equity securities or interests or assets or otherwise) any corporation, partnership, association or other business organization or division thereof or any property or asset, or make any investment by the purchase of securities, contribution of capital, property transfer, or purchase of any property or assets of any other person;
(iii) incur any expenses (except in the ordinary course of business consistent with past practice in the last 12 months, as required to exercise its rights and discharge its obligations under this Agreement, or as contemplated in the Exeter Budget) or incur any indebtedness for borrowed money or issue any debt securities, or assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other person, or make any loans or advances;
(iv) pay, discharge or satisfy any claim, liability or obligation prior to the same being due, other than the payment, discharge or satisfaction, (i) in the ordinary course of business, of liabilities reflected or reserved against in the Financial Statements, or voluntarily waive, release, assign, settle or compromise (ii) pursuant to any Proceeding;
(v) make any investment in or to Chile or any person or property located, domiciled or otherwise incorporated, as applicable, in Chile, including but not limited to, in the form of cash, cash equivalents, loan, purchase of securities, contribution of capital, property transfer or purchase of any property or assets (except in the ordinary course of business consistent with past practice in the last 12 months or as contemplated in the Exeter Budget);
(vi) engage in any new business, enterprise or other activity that is inconsistent with the material Contract existing businesses of the Company in the manner such existing businesses generally have been carried on or (as disclosed in the Public Disclosure Record) planned or proposed to be carried on prior to at the date of this Agreement;
, (viiiii) except as provided security for borrowings permitted by Section 5.1(f) or (iv) pursuant to plans or proposals disclosed in the Exeter Budget in respect of any Exeter Property or as are required by applicable Laws to maintain any Permits in good standing, expend or commit to expend any amounts with respect to expenses for such Exeter Property; or
(viii) authorize any of the foregoing, or enter into or modify any Contract to do any of the foregoingDisclosure Letter;
(f) the Company will shall not, and will not cause or nor shall it permit its subsidiaries any of the Subsidiaries to, directly or indirectly, except (i) incur any material indebtedness for borrowed money other than (A) short-term borrowings incurred in the ordinary course of business:business not to exceed $1 million, and (B) additional borrowings under credit lines existing as of the date of this Agreement incurred in the ordinary course of business and not to exceed $1 million, or pursuant to any modifications, renewals or replacements of any such credit lines, and (ii) enter into any material operating lease or create any Liens, other than Permitted Liens, on any material property of the Company in connection with any indebtedness for borrowed money (other than any indebtedness permitted pursuant to this Section 5.1(f));
(g) the Company shall not, nor shall it permit any of the Subsidiaries to, (i) terminate, fail to renewamend or modify the Roche Agreement, cancel, waive, release, grant except as required by the terms of the Roche Agreement or transfer any rights of material value;
applicable Laws or (ii) except in connection with matters otherwise permitted under this Section 4.1, enter into materially amend or prematurely terminate any Contract which would be a Material Contract if in existence on the date hereof, or terminate, cancel, extend, renew or amend, modify or change any Material Contract;
(iii) enter into any lease or sublease of real property (whether as a lessor, sublessor, lessee or sublessee), or modify, amend or exercise any right to renew any lease or sublease of real property or acquire any interest in real property; or
(iv) enter into any Contract containing any provision restricting or triggered by the Contemplated Transactions;
(g) Neither the Company nor its subsidiaries will, except in the ordinary course of business or pursuant where failure to any existing Contracts amend or employmentterminate a Material Contract would, pensionin the reasonable judgment of the Company, supplemental pension, termination or compensation arrangements or policies or plans in effect have an adverse impact on the date hereof, and except as is necessary to comply with applicable Laws:
(i) grant to any officer, director, employee or consultant of the Company or its subsidiaries an increase in compensation in any form;
(ii) grant any general salary increase, fee or pay any bonus or other material compensation to the directors, officers, employees or consultants Subsidiary of the Company and its subsidiaries;
(iii) except as set out in Section 4.1(g)(iii) of the Exeter Disclosure Letter, take any action with respect to the grant or increase of any severance, change of control, retirement, retention or termination pay;
(iv) enter into or modify any employment or consulting agreement with any officer or director of the Company or its subsidiaries;
(v) terminate the employment or consulting arrangement of any senior management employees (including the Exeter Senior Management), except for cause;
(vi) increase any benefits payable under its current severance or termination pay policies;
(vii) other than as set out in Section 4.1(g)(vii) of the Exeter Disclosure Letter, adopt or amend or make any contribution to or any award under the Stock Option Plan, any restricted share unit plan, deferred share unit plan, performance share unit plan or other bonus, profit sharing, option, pension, retirement, deferred compensation, insurance, incentive compensation, compensation or other similar plan, agreement, trust, fund or arrangement for the benefit of directors or senior officers or former directors or senior officers of the Company or its subsidiaries; or
(viii) take any action to accelerate the time of payment of any compensation or benefits, amend or waive any performance or vesting criteria or accelerate vesting under the Stock Option Plan, except in accordance with its terms as contemplated herein or thereinCompany;
(h) neither the Company shall not, nor its subsidiaries will shall the Company permit any of the Subsidiaries to authorize, make or commit to make any loan to any officer, director, employee capital expenditures (including capital lease obligations) in excess of $1 million individually or consultant of in the Company or its subsidiariesaggregate;
(i) other than in the Company will use its commercially reasonable efforts to cause the current insurance (or re-insurance) policies maintained by the Company, including directors’ and officers’ insurance, not to be cancelled or terminated and to prevent any ordinary course of the coverage thereunder from lapsing, unless at the time of such termination, cancellation or lapse, replacement policies underwritten by insurance or re-insurance companies of nationally recognized standing having comparable deductions and providing coverage comparable to or greater than the coverage under the cancelled, terminated or lapsed policies for substantially similar premiums are in full force and effect, provided, however, that, except as contemplated by Section 4.8(b)business, the Company will not obtain shall not, nor shall it permit any of its Subsidiaries to sell, pledge, encumber, lease (whether such lease is a sale and lease back of assets) or renew otherwise dispose of any insurance (or re-insurance) policy for a term exceeding 12 monthsassets;
(j) increase in any material manner the Company will use commercially reasonable efforts to retain the services of its and its subsidiaries’ existing employees and consultants (including the Exeter Senior Management) and will promptly provide written notice to the Purchaser of the resignation or termination compensation of any of its key directors, officers or employees or consultantsenter into, establish or amend any Plan for the benefit of any director or employee of the Company, other than: (i) as required pursuant to applicable Law, this Agreement, the Arrangement or the terms of contracts in effect as of the date of this Agreement; and (ii) increases in salaries, wages and benefits effected in the ordinary course of business;
(k) neither the Company shall not, nor its subsidiaries will make an application to amend, terminate, allow to expire or lapse or otherwise modify shall it permit any of its Permits or take any action or fail to take any action which action or failure to act would result in the material lossSubsidiaries to, expiration or surrender of, or the loss of make any material benefit underchanges to the existing accounting practices, methods, and principles relating to the Company or reasonably be expected to cause any Governmental Authority to institute proceedings for of the suspensionSubsidiaries, revocation except as required by applicable Laws or limitation of rights under, any material Permit necessary to conduct its businesses as now being conductedGAAP;
(l) except as required by applicable Law or in the ordinary course of business, the Company and each shall not, nor shall it permit any of its subsidiaries will Subsidiaries to, (i) duly and timely file all Returns required to be filed by it on make, change or after the date hereof and all such Returns will be truerescind any material tax election, complete and correct in all material respects and (ii) timely withhold, collect, remit and pay all Taxes which are to be withheld, collected, remitted or paid by it to the extent due and payable except for any Taxes contested in good faith pursuant to applicable Laws, and the Company will not (A) change its tax accounting methods, principles or practices, except insofar as may have been required by a change in IFRS or applicable Law, (B) settle, compromise or agree to the entry of judgment with respect to take any action, claim or other Proceeding omit to take any action, in either case inconsistent with past practice, relating to Taxesthe filing of any Tax Return or the payment of any Tax, (other than the payment, discharge or satisfaction of liabilities reflected or reserved against in the Financial Statementsiii) (C) enter into any tax sharing, tax allocation or tax indemnification agreement, (D) make a request for a tax ruling to any Governmental Authority, or (E) agree to any extension or waiver of the limitation period relating to settle any material Tax claim or assessment in excess of $1 million, (iv) surrender any right or reassessment;claim to a Tax refund, or (v) materially amend any of its transfer pricing policies; and
(m) the Company will notshall promptly, and will not cause or permit its subsidiaries toafter the matter in question comes to the attention of an individual to whom the definition of knowledge of the Company applies, settle or compromise any action, claim or other Proceeding advise Acquisitionco in writing:
(i) brought against it for damages of any event, condition or providing for the grant of injunctive relief circumstance that would be reasonably expected to cause any representation or other non-monetary remedy (“Litigation”) or (ii) brought by any present, former or purported holder of its securities in connection with the Contemplated Transactions;
(n) the Company will not, and will not cause or permit its subsidiaries to, commence any Litigation (other than litigation in connection with the collection of accounts receivable, to enforce the terms of this Agreement or the Confidentiality Agreement, to enforce other obligations of the Purchaser or as a result of litigation commenced against the Company);
(o) the Company will not, and will not cause or permit its subsidiaries to, enter into or renew any Contract (i) containing (A) any limitation or restriction on the ability warranty of the Company or its subsidiaries contained in this Agreement to be materially untrue at the Effective Time (or, following in the Effective Time, the ability case of the Purchaser or any of its affiliates, to engage in any type of activity or business, (B) any limitation or restriction on the manner in which, or the localities in which, all or any portion of the business of the Company or its subsidiaries or, following the Effective Time, all or any portion of the business of the Purchaser or any of its affiliates, is or would be conducted or (C) any limit or restriction on the ability of the Company or its subsidiaries or, following the Effective Time, the ability of the Purchaser or any of its affiliates, to solicit customers or employees, or (ii) that would reasonably be expected to prevent or significantly impede or materially delay the completion of the Contemplated Transactions;
(p) the Company will not, and will not cause or permit any of its subsidiaries to, take any action which would render, or which reasonably may be expected to render, any representation or warranty made by as of a specified date, as of such specified date), in either case such that the Company condition in this Agreement untrue or inaccurate in any material respect (disregarding for this purpose all materiality or Material Adverse Effect qualifications contained thereinSection 6.2(b) at any time prior to the Effective Time if then madewould not be satisfied; and
(qii) as is applicable, of any material breach by the Company will not, and will not cause or permit its subsidiaries to, agree, announce, resolve, authorize or commit to do of any of the foregoingcovenant contained in this Agreement.
Appears in 1 contract
Samples: Combination Agreement (Aspreva Pharmaceuticals CORP)
Covenants of the Company Regarding the Conduct of Business. The Company covenants and agrees that, until the earlier of prior to the Effective Time and the time that this Agreement is terminated in accordance with its termsTime, unless the Purchaser Acquiror shall otherwise consents agree in writing (writing, such agreement not to the extent that such consent is permitted by applicable Law), which consent will not be unreasonably withheld, conditioned delayed or delayed, or expressly permitted or specifically contemplated by this Agreementconditioned, or as set out in otherwise expressly contemplated or permitted by this Agreement or the Exeter Disclosure Letter or as is otherwise required by applicable LawLetter, the Company shall:
(a) conduct its businesses only in, not take any action except in, and maintain its facilities in, the businesses of the Company usual, ordinary and its subsidiaries will be conducted only in the ordinary regular course of business consistent with past practice and in accordance with the Exeter Budget, the Company and its subsidiaries will comply with the terms of all Material Contracts and the Company and its subsidiaries will use commercially reasonable efforts to maintain and to: (i) preserve intact its present business organizationsorganization, assetsassets (including intellectual property) and goodwill; (ii) maintain its real property interests (including title to, propertiesand leasehold interests in respect of, rights, goodwill and business relationships and any real property) in good standing; (iii) keep available the services of its officers, officers and employees and consultants as a group; and (iv) preserve the current relationships with suppliers, distributors, employees, consultants, customers and others having business relationships with it;
(bi) the Company will cooperate and consult through meetings with the Purchaser, as the Purchaser may reasonably request, to allow the Purchaser to monitor, and provide reasonable input Acquiror (A) with respect to decisions and expenditures in respect of the direction ofexploration, any activities relating to the exploration development and maintenance of Exeter Properties all of the properties and discuss with assets owned and controlled by the Purchaser Company, and (B) prior to making any required public disclosure of exploration results payments or other technical information provided nothing contained incurring any expenses that are not included in this Section 4.1(b) shall prevent the Company from publicly disclosing any information required Officer’s Certificate, and (ii) make available to the Acquiror on a weekly basis (at a time designated by Law or the rules or policies Acquiror, acting reasonably) members of senior management of the TSX or NYSE MKT after prior notice to the Purchaser and, other than as contemplated Company designated by the Exeter BudgetAcquiror to discuss the business, will not make any capital expenditures or other financial commitments in excess affairs, finances and operations of $500,000 or $2,000,000 in the aggregateCompany;
(c) the Company will not, directly or indirectly:
(i) issue, sell, pledge, lease, dispose of, encumber or agree to issue, sell, pledge, lease, dispose of or encumber: (A) any additional shares of, or any options, warrants, calls, conversion privileges or rights of any kind to acquire any shares or other securities of, the Company (other than the issuance of Common Shares pursuant to the exercise in accordance with their terms of Options or Warrants currently outstanding); or (B) except in the ordinary course of business, any assets of the Company;
(ii) amend or agree to amend any of the terms of any of the Options or the Warrants, or amend, extend, terminate or otherwise alter (or agree to do any of the foregoing in respect of) any other contractual arrangement of the Company;
(iii) amend or propose to amend the notice of articles, articles, charter, by-laws or other constating documents of the Company or its subsidiariesCompany;
(iiiv) split, combine or reclassify any outstanding Common Shares or declare, set aside or pay any dividend on or make any other distribution payable in cash, stock, property or payment or return of capital in otherwise with respect of any equity securities of the Company (other than dividends, distributions, payments or return of capital made to the Company);
(iii) split, divide, consolidate, combine or reclassify the Exeter Shares or any other securities of the Company or its subsidiaries;
(iv) issue, grant, sell or pledge or authorize or agree to issue, grant, sell or pledge any Exeter Shares or other securities of the Company or its subsidiaries, or securities convertible into or exchangeable or exercisable for, or otherwise evidencing a right to acquire, Exeter Shares or other securities of the Company or its subsidiaries, other than the issuance of Exeter Shares issuable pursuant to the terms of Exeter Options outstanding on the date hereofCommon Shares;
(v) redeem, purchase or otherwise acquire or subject offer to purchase any Lien, any of its outstanding Exeter Common Shares or other securities or securities convertible into or exchangeable or exercisable for Exeter Shares or any such other securities or any shares or other securities of its subsidiariesthe Company;
(vi) other than as set out in Section 4.1(c)(vi) of the Exeter Disclosure Letter, amend the terms of any securities of the Company or its subsidiaries;
(vii) adopt a plan of liquidation or resolution providing for the liquidation or dissolution of the Company or its subsidiaries;
(viii) reorganize, amalgamate or merge with any other person and will not cause by plan of arrangement or permit its subsidiaries to reorganize, amalgamate or merge otherwise the Company with any other person;
(ixvii) create any subsidiary or enter into any Contracts or other arrangements regarding reduce the control or management stated capital of the operations, or the appointment of governing bodies or enter into any Joint VenturesCompany;
(xviii) make any material changes acquire or agree to any of its accounting policies, principles, methods, practices or procedures (including by adopting any material new accounting policies, principles, methods, practices or procedures), except as disclosed in the Public Disclosure Record, as required by applicable Laws or under IFRS; or
(xi) enter into, modify or terminate any Contract with respect to any of the foregoing;
(d) the Company will immediately notify the Purchaser orally and then promptly notify the Purchaser in writing of (i) any “material change” (as defined in the Securities Act) in relation to the Company or its subsidiaries, (ii) any event, circumstance or development that has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, (iii) any breach of this Agreement by the Company, or (iv) any event occurring after the date of this Agreement that would render a representation or warranty, if made on that date or the Effective Time, inaccurate;
(e) except as contemplated in the Exeter Budget, the Company will not, and will not cause or permit its subsidiaries to, directly or indirectly, except in connection with this Agreement:
(i) sell, pledge, lease, licence, dispose of or encumber any assets or properties of the Company or its subsidiaries related to the Material Property;
(ii) acquire (by merger, amalgamation, consolidationplan of arrangement, arrangement or acquisition of shares or other equity securities or interests or assets or otherwise) any corporationcompany, partnership, association partnership or other business organization or division thereof division, or incorporate or form any property company, partnership or asset, other business organization or make any investment either by the purchase of shares or securities, contribution contributions of capital, property transfer, transfer or purchase of any property or assets of any other person;
(iiiix) enter into or agree to the terms of any joint venture or similar agreement, arrangement or relationship;
(x) sell, transfer or assign any interest in any of the Company Properties;
(xi) incur any expenses (except in the ordinary course of business consistent with past practice in the last 12 months, as required or commit to exercise its rights and discharge its obligations under this Agreement, or as contemplated in the Exeter Budget) or incur any indebtedness for borrowed money money, capital expenditures other than the Credit Facility, or any other material liability, contractual commitment or obligation or issue any debt securities;
(xii) enter into any agreement with, or assumemake any payments to, guaranteeany Related Party of the Company;
(xiii) endorse, endorse or otherwise as an accommodation become responsible for for, the obligations of any other person, company, partnership or other business organization, or make any loans or advances;
(ivxiv) adopt a plan of liquidation or resolutions providing for the liquidation or dissolution of the Company;
(xv) take any action or enter into any transaction that would preclude the Acquiror from obtaining the tax "bump", determined under paragraph 88(1)(d) of the Tax Act, in respect of the non-depreciable capital property of the Company upon a wind-up, or amalgamation with, the Company;
(xvi) pay, discharge or satisfy any claimmaterial claims, liability liabilities or obligation prior to the same being due, obligations other than the payment, discharge or satisfaction, as reflected in the ordinary course of business, of liabilities reflected or reserved against in the Financial Statements, or voluntarily waive, release, assign, settle or compromise any ProceedingCompany’s Officer’s Certificate;
(vxvii) make authorize, recommend, propose or agree to any investment in release or to Chile or any person or property located, domiciled or otherwise incorporated, as applicable, in Chile, including but not limited to, in the form of cash, cash equivalents, loan, purchase of securities, contribution of capital, property transfer or purchase relinquishment of any property material contractual right or assets (except in the ordinary course of business consistent with past practice in the last 12 months other material right under any licence or as contemplated in the Exeter Budget)permit or material contract;
(vixviii) engage in abandon or fail to diligently pursue any new businessapplication for any material licence, enterprise permit, order, authorization, consent, approval or other activity that registration which is inconsistent with the existing businesses of the Company in the manner such existing businesses generally have been carried on currently pending or (as disclosed in the Public Disclosure Record) planned or proposed contemplated to be carried on prior to the date of this Agreementsought or required;
(viixix) except as provided for in the Exeter Budget in respect of any Exeter Property or as are required by applicable Laws to maintain any Permits in good standing, expend or commit to expend any amounts with respect to expenses for such Exeter Property; or
(viii) authorize any of the foregoing, or enter into or modify any Contract to do any of the foregoing;
(f) the Company will not, and will not cause or permit its subsidiaries to, directly or indirectly, except in the ordinary course of business:
(i) terminate, fail to renew, cancel, waive, release, grant or transfer any rights of material value;
(ii) except in connection with matters otherwise permitted under this Section 4.1, enter into any Contract which would be a Material Contract if in existence on the date hereof, value or terminate, cancel, extend, renew or amend, modify or change in any Material Contract;
(iii) enter into material respect any lease existing licence, lease, permit, material contract or sublease of real property (whether as a lessorother material document, sublessor, lessee or sublessee), or modify, amend or exercise any right to renew any lease or sublease of real property or acquire any interest in real property; or
(iv) enter into any Contract containing any provision restricting or triggered by the Contemplated Transactions;
(g) Neither the Company nor its subsidiaries will, except other than in the ordinary course of business consistent with past practice; or
(xx) enter into new commitments of a capital expenditure nature or pursuant incur any new contingent liabilities;
(d) not enter into or modify any employment, consulting, severance, change of control or similar agreements or arrangements with, or grant any bonuses, salary or fee increases, severance or termination pay to, any officers or directors or, in the case of employees or consultants who are not officers or directors, take any action other than as disclosed in the Company Officer’s Certificate with respect to the grant of any bonuses, salary or fee increases, severance or termination pay or with respect to any existing Contracts or employment, pension, supplemental pension, termination or compensation arrangements or policies or plans increase of benefits payable in effect on the date hereofhereof and shall not pay or agree to pay any bonuses, and except as is necessary to comply with applicable Laws:
(i) grant salary or fee increases, severance or termination pay to any director, officer, director, employee or consultant of in connection with the Company or its subsidiaries an increase in compensation in any formtransactions contemplated by this Agreement;
(iie) grant any general salary increase, fee or pay any bonus or other material compensation to the directors, officers, employees or consultants of the Company and its subsidiaries;
(iii) except as set out in Section 4.1(g)(iii) of the Exeter Disclosure Letter, take any action with respect to the grant or increase of any severance, change of control, retirement, retention or termination pay;
(iv) enter into or modify any employment or consulting agreement with any officer or director of the Company or its subsidiaries;
(v) terminate the employment or consulting arrangement of any senior management employees (including the Exeter Senior Management), except for cause;
(vi) increase any benefits payable under its current severance or termination pay policies;
(vii) other than as set out in Section 4.1(g)(vii) of the Exeter Disclosure Letter, not adopt or amend or make any contribution to or any award under the Stock Option Plan, any restricted share unit plan, deferred share unit plan, performance share unit plan or other bonus, profit sharing, incentive, compensation, stock option, pension, retirement, deferred compensation, insurance, incentive compensation, compensation employment or other similar employee benefit plan, agreement, trust, fund or arrangement for the benefit of directors or senior officers or former directors or senior officers of the Company or its subsidiaries; or
(viii) take any action to accelerate the time of payment welfare of any compensation or benefits, amend or waive any performance or vesting criteria or accelerate vesting under the Stock Option Plan, except in accordance with its terms as contemplated herein or thereinemployee;
(hf) neither the Company nor its subsidiaries will make any loan to any officer, director, employee or consultant of the Company or its subsidiaries;
(i) the Company will use its commercially reasonable efforts to cause the its current insurance (or re-re- insurance) policies maintained by the Company, including directors’ and officers’ insurance, not to be cancelled or terminated and to prevent or any of the coverage thereunder from lapsingto lapse unless, unless at the time of simultaneously with such terminationcancellation, cancellation termination or lapse, replacement policies underwritten by insurance or and re-insurance companies of nationally recognized standing having comparable deductions and providing coverage comparable equal to or greater than the coverage under the cancelled, terminated or lapsed policies for substantially similar premiums are in full force and effect, provided, however, that, except as contemplated by Section 4.8(b), the Company will not obtain or renew any insurance (or re-insurance) policy for a term exceeding 12 months;
(jg) the Company will use commercially reasonable efforts to retain the services of its and its subsidiaries’ existing employees and consultants (including the Exeter Senior Management) and will promptly provide written notice to the Purchaser of the resignation or termination of any of its key employees or consultants;
(k) neither the Company nor its subsidiaries will make an application to amend, terminate, allow to expire or lapse or otherwise modify any of its Permits or not take any action or fail to take any action which action or failure to act would result in the material loss, expiration or surrender of, or the loss of any material benefit under, or reasonably be expected to cause any Governmental Authority to institute proceedings for the suspension, revocation or limitation of rights under, any material Permit necessary to conduct its businesses as now being conducted;
(l) the Company and each of its subsidiaries will (i) duly and timely file all Returns required to be filed by it on or after the date hereof and all such Returns will be true, complete and correct in all material respects and (ii) timely withhold, collect, remit and pay all Taxes which are to be withheld, collected, remitted or paid by it to the extent due and payable except for any Taxes contested in good faith pursuant to applicable Laws, and the Company will not (A) change its tax accounting methods, principles or practices, except insofar as may have been required by a change in IFRS or applicable Law, (B) settle, compromise or agree to the entry of judgment with respect to any action, claim or other Proceeding relating to Taxes, (other than the payment, discharge or satisfaction of liabilities reflected or reserved against in the Financial Statements) (C) enter into any tax sharing, tax allocation or tax indemnification agreement, (D) make a request for a tax ruling to any Governmental Authority, or (E) agree to any extension or waiver of the limitation period relating to any material Tax claim or assessment or reassessment;
(m) the Company will not, and will not cause or permit its subsidiaries to, settle or compromise any action, claim or other Proceeding (i) brought against it for damages or providing for the grant of injunctive relief or other non-monetary remedy (“Litigation”) or (ii) brought by any present, former or purported holder of its securities in connection with the Contemplated Transactions;
(n) the Company will not, and will not cause or permit its subsidiaries to, commence any Litigation (other than litigation in connection with the collection of accounts receivable, to enforce the terms of this Agreement or the Confidentiality Agreement, to enforce other obligations of the Purchaser or as a result of litigation commenced against the Company);
(o) the Company will not, and will not cause or permit its subsidiaries to, enter into or renew any Contract (i) containing (A) any limitation or restriction on the ability of the Company or its subsidiaries or, following the Effective Time, the ability of the Purchaser or any of its affiliates, to engage in any type of activity or business, (B) any limitation or restriction on the manner in which, or the localities in which, all or any portion of the business of the Company or its subsidiaries or, following the Effective Time, all or any portion of the business of the Purchaser or any of its affiliates, is or would be conducted or (C) any limit or restriction on the ability of the Company or its subsidiaries or, following the Effective Time, the ability of the Purchaser or any of its affiliates, to solicit customers or employees, or (ii) that would reasonably be expected to prevent or significantly impede or materially delay the completion of the Contemplated Transactions;
(p) the Company will not, and will not cause or permit any of its subsidiaries to, take any action which would render, or which reasonably may be expected to render, any representation or warranty made by the Company it in this Agreement untrue or inaccurate in any material respect (disregarding for this purpose all materiality or Material Adverse Effect qualifications contained therein) at any time prior to the Effective Time if then made; and, and promptly notify the Acquiror first immediately orally and then promptly in writing of the occurrence of any event or condition that has, or is reasonably likely to have, a Material Adverse Effect in respect of the Company in the course of its business or in the operation of its properties and of any material governmental or third party complaints, investigations or hearings (or communications indicating that the same may be contemplated);
(qh) as is applicable, the Company will not, and will not cause or permit its subsidiaries to, agree, announce, resolve, authorize or commit propose or enter into or modify any contract, agreement, commitment or arrangement to do any of the foregoingmatters prohibited by the other paragraphs of this Section 5.1;
(i) not enter into or adopt any shareholder rights plan or similar agreement or arrangement;
(j) (i) duly and timely file all Tax Returns required to be filed by it on or after the date hereof and all such Tax Returns shall be true, complete and correct in all material respects, (ii) timely pay all Taxes which are due and payable, (iii) not make or rescind any material express or deemed election relating to Taxes, (iv) not make a request for a Tax ruling or enter into a closing agreement with any taxing authorities, (v) not settle or compromise any claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to Taxes, and (vi) not change in any material respect any of its methods of reporting losses, deductions or accounting for income tax purposes from those employed in the preparation of its Tax Return for the most recent taxation year, except as may be required by applicable Law;
(k) not engage in any business, enterprise or other activity different from that carried on by it at the date of this Agreement that would reasonably be expected to have a Material Adverse Effect on the Company; and
(l) make or cooperate as necessary in the making of all necessary filings and applications under all applicable Law required in connection with the transactions contemplated herein and take all reasonable action necessary to be in compliance with such Laws.
Appears in 1 contract
Covenants of the Company Regarding the Conduct of Business. The Company covenants and agrees that, until the earlier of prior to the Effective Time and the time that this Agreement is terminated in accordance with its termsTime, unless the Purchaser Acquiror shall otherwise consents agree in writing (writing, such agreement not to the extent that such consent is permitted by applicable Law), which consent will not be unreasonably withheld, conditioned delayed or delayed, or expressly permitted or specifically contemplated by this Agreementconditioned, or as set out in otherwise expressly contemplated or permitted by this Agreement or the Exeter Disclosure Letter or as is otherwise required by applicable LawLetter, the Company shall, and shall cause each Company Subsidiary to:
(a) conduct its business only in, not take any action except in, and maintain its facilities in, the businesses of the Company usual, ordinary and its subsidiaries will be conducted only in the ordinary regular course of business consistent with past practice and in accordance with the Exeter Budget, the Company and its subsidiaries will comply with the terms of all Material Contracts and the Company and its subsidiaries will use commercially reasonable efforts to maintain and to: (i) preserve intact its present business organizationsorganization, assetsassets (including intellectual property) and goodwill; (ii) maintain its real property interests (including title to, propertiesand leasehold interests in respect of, rights, goodwill and business relationships and any real property) in good standing; (iii) keep available the services of its officers, officers and employees and consultants as a group; and (iv) preserve the current relationships with employees, consultants, and others having business relationships with it;
(b) the Company will cooperate and consult through meetings with the Purchaser, as the Purchaser may reasonably request, to allow the Purchaser to monitor, and provide Acquiror on a reasonable input with respect request basis in relation to the direction of, any activities relating Alto Parana Sale to keep the exploration and maintenance Acquiror appraised of Exeter Properties and discuss with the Purchaser prior to any required public disclosure of exploration results or other technical information provided nothing contained in this Section 4.1(b) shall prevent the Company from publicly disclosing any information required by Law or the rules or policies of the TSX or NYSE MKT after prior notice to the Purchaser and, other than as contemplated by the Exeter Budget, will not make any capital expenditures or other financial commitments in excess of $500,000 or $2,000,000 in the aggregatedevelopments;
(c) if requested by the Acquiror and at the Acquiror’s cost, within ten (10) Business Days of the end of each month prior to the Effective Date, provide trial balances of the Company will and Company Subsidiaries (excluding CIC Resources Inc. and its direct and indirect subsidiaries, but with reasonable supplementary summary information about CIC Resources Inc) for the prior month;
(d) except for transactions involving only the Company and one or more Company Subsidiaries, the Company shall not, directly or indirectlyand shall cause each of the Company Subsidiaries not to:
(i) issue, sell, pledge, lease, dispose of, encumber or agree to issue, sell, pledge, lease, dispose of or encumber: (A) any additional shares of, or any options, warrants, calls, conversion privileges or rights of any kind to acquire any shares or other securities of, the Company or any Company Subsidiary (other than the issuance of Common Shares pursuant to the exercise in accordance with their terms of Options or Warrants currently outstanding); or (B) any assets of the Company or any Company Subsidiary other than the Alto Parana Sale;
(ii) amend or agree to amend any of the terms of any of the Options or the Warrants, or amend, extend, terminate or otherwise alter (or agree to do any of the foregoing in respect of) any other contractual arrangement of the Company or any Company Subsidiary;
(iii) amend or propose to amend the notice of articles, articles, charter, by-laws or other constating documents of the Company or its subsidiariesany Company Subsidiary;
(iiiv) split, combine or reclassify any outstanding Common Shares or declare, set aside or pay any dividend on or make any other distribution payable in cash, stock, property or payment or return of capital in otherwise with respect of any equity securities of the Company (other than dividends, distributions, payments or return of capital made to the Company)Common Shares;
(iiiv) splitcause any Company Subsidiary to declare, divideset aside or pay any dividend or other distribution payable in cash, consolidatestock, combine property or reclassify otherwise with respect to the Exeter Shares or any other securities shares of the a Company or its subsidiariesSubsidiary;
(ivvi) issueredeem, grantpurchase or offer to purchase (or permit any Company Subsidiary to redeem, sell purchase or pledge or authorize or agree offer to issue, grant, sell or pledge purchase) any Exeter Common Shares or other securities of the Company or its subsidiaries, or securities convertible into or exchangeable or exercisable for, or otherwise evidencing a right to acquire, Exeter Shares or other securities of the Company or its subsidiaries, other than the issuance of Exeter Shares issuable pursuant to the terms of Exeter Options outstanding on the date hereof;
(v) redeem, purchase or otherwise acquire or subject to any Lien, any of its outstanding Exeter Shares or other securities or securities convertible into or exchangeable or exercisable for Exeter Shares or any such other securities or any shares or other securities of its subsidiaries;
(vi) other than as set out in Section 4.1(c)(vi) of the Exeter Disclosure Letter, amend the terms of any securities of the Company or its subsidiariesSubsidiary;
(vii) adopt a reorganize, amalgamate or merge by plan of liquidation arrangement or resolution providing for the liquidation or dissolution of otherwise the Company or its any Company Subsidiary with any other person, company, partnership or other business organization whatsoever or incorporate any subsidiaries;
(viii) reorganize, amalgamate reduce the stated capital of the Company or merge with of any other person and will not cause or permit its subsidiaries to reorganize, amalgamate or merge with any other personCompany Subsidiary;
(ix) create any subsidiary acquire or enter into any Contracts or other arrangements regarding the control or management of the operations, or the appointment of governing bodies or enter into any Joint Ventures;
(x) make any material changes agree to any of its accounting policies, principles, methods, practices or procedures (including by adopting any material new accounting policies, principles, methods, practices or procedures), except as disclosed in the Public Disclosure Record, as required by applicable Laws or under IFRS; or
(xi) enter into, modify or terminate any Contract with respect to any of the foregoing;
(d) the Company will immediately notify the Purchaser orally and then promptly notify the Purchaser in writing of (i) any “material change” (as defined in the Securities Act) in relation to the Company or its subsidiaries, (ii) any event, circumstance or development that has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, (iii) any breach of this Agreement by the Company, or (iv) any event occurring after the date of this Agreement that would render a representation or warranty, if made on that date or the Effective Time, inaccurate;
(e) except as contemplated in the Exeter Budget, the Company will not, and will not cause or permit its subsidiaries to, directly or indirectly, except in connection with this Agreement:
(i) sell, pledge, lease, licence, dispose of or encumber any assets or properties of the Company or its subsidiaries related to the Material Property;
(ii) acquire (by merger, amalgamation, consolidationplan of arrangement, arrangement or acquisition of shares or other equity securities or interests or assets or otherwise) any corporationcompany, partnership, association partnership or other business organization or division thereof division, or incorporate or form any property company, partnership or asset, other business organization or make any investment either by the purchase of shares or securities, contribution contributions of capitalcapital (other than to a Company Subsidiary), property transfer, transfer or purchase of any property or assets of any other person, company, partnership or other business organization;
(iiix) enter into or agree to the terms of any joint venture or similar agreement, arrangement or relationship;
(xi) sell, transfer or assign (or permit any Company Subsidiary to sell, transfer or assign) any interest in any of the Company Properties, other than the Alto Parana Sale;
(xii) incur any expenses (except in the ordinary course of business consistent with past practice in the last 12 months, as required or commit to exercise its rights and discharge its obligations under this Agreement, or as contemplated in the Exeter Budget) or incur any indebtedness for borrowed money money, capital expenditures, or any other material liability, contractual commitment or obligation or issue any debt securities;
(xiii) enter into any agreement with, or assumemake any payments to, guaranteeany Related Party of the Company or any Company Subsidiary;
(xiv) endorse, endorse or otherwise as an accommodation become responsible for for, the obligations of any other person, company, partnership or other business organization, or make any loans or advances;
(ivxv) adopt a plan of liquidation or resolutions providing for the liquidation or dissolution of the Company or any Company Subsidiary;
(xvi) take any action or enter into any transaction that would preclude the Acquiror from obtaining the tax “bump”, determined under paragraph 88(1)(d) of the Tax Act, in respect of the non-depreciable capital property of the Company upon a wind-up, or amalgamation with, the Company;
(xvii) pay, discharge or satisfy any claimmaterial claims, liability liabilities or obligation prior to the same being due, obligations other than the payment, discharge or satisfaction, in the ordinary course of businessbusiness consistent with past practice, of liabilities reflected or reserved against in the Financial Statements, Company's financial statements or voluntarily waive, release, assign, settle or compromise any Proceeding;
(v) make any investment in or to Chile or any person or property located, domiciled or otherwise incorporated, as applicable, in Chile, including but not limited to, in the form of cash, cash equivalents, loan, purchase of securities, contribution of capital, property transfer or purchase of any property or assets (except incurred in the ordinary course of business consistent with past practice in the last 12 months or as contemplated in the Exeter Budget)practice;
(vixviii) engage in authorize, recommend, propose or agree to any new business, enterprise release or relinquishment of any material contractual right or other activity that is inconsistent with the existing businesses of the Company in the manner such existing businesses generally have been carried on material right under any licence or (as disclosed in the Public Disclosure Record) planned permit or proposed to be carried on prior to the date of this Agreementmaterial contract;
(viixix) except as provided abandon or fail to diligently pursue any application for in the Exeter Budget in respect of any Exeter Property material licence, permit, order, authorization, consent, approval or as are required by applicable Laws registration which is currently pending or contemplated to maintain any Permits in good standing, expend be sought or commit to expend any amounts with respect to expenses for such Exeter Property; or
(viii) authorize any of the foregoing, or enter into or modify any Contract to do any of the foregoingrequired;
(fxx) the Company will not, and will not cause or permit its subsidiaries to, directly or indirectly, except in the ordinary course of business:
(i) terminate, fail to renew, cancel, waive, release, grant or transfer any rights of material value;
(ii) except in connection with matters otherwise permitted under this Section 4.1, enter into any Contract which would be a Material Contract if in existence on the date hereof, value or terminate, cancel, extend, renew or amend, modify or change in any Material Contract;
(iii) enter into material respect any lease existing licence, lease, permit, material contract or sublease of real property (whether as a lessorother material document, sublessor, lessee or sublessee), or modify, amend or exercise any right to renew any lease or sublease of real property or acquire any interest in real property; or
(iv) enter into any Contract containing any provision restricting or triggered by the Contemplated Transactions;
(g) Neither the Company nor its subsidiaries will, except other than in the ordinary course of business consistent with past practice; or
(xxi) enter into new commitments of a capital expenditure nature or pursuant incur any new contingent liabilities;
(e) not enter into or modify any employment, consulting, severance, change of control or similar agreements or arrangements with, or grant any bonuses, salary or fee increases, severance or termination pay to, any officers or directors or, in the case of employees or consultants who are not officers or directors, take any action other than in the ordinary, regular and usual course of business and consistent with past practice (none of which actions shall be unreasonable or unusual) with respect to the grant of any bonuses, salary or fee increases, severance or termination pay or with respect to any existing Contracts or employment, pension, supplemental pension, termination or compensation arrangements or policies or plans increase of benefits payable in effect on the date hereofhereof and shall not pay or agree to pay any bonuses, and except as is necessary to comply with applicable Laws:
(i) grant salary or fee increases, severance or termination pay to any director, officer, director, employee or consultant of in connection with the Company or its subsidiaries an increase in compensation in any formtransactions contemplated by this Agreement;
(iif) grant any general salary increase, fee or pay any bonus or other material compensation to the directors, officers, employees or consultants of the Company and its subsidiaries;
(iii) except as set out in Section 4.1(g)(iii) of the Exeter Disclosure Letter, take any action with respect to the grant or increase of any severance, change of control, retirement, retention or termination pay;
(iv) enter into or modify any employment or consulting agreement with any officer or director of the Company or its subsidiaries;
(v) terminate the employment or consulting arrangement of any senior management employees (including the Exeter Senior Management), except for cause;
(vi) increase any benefits payable under its current severance or termination pay policies;
(vii) other than as set out in Section 4.1(g)(vii) of the Exeter Disclosure Letter, not adopt or amend or make any contribution to or any award under the Stock Option Plan, any restricted share unit plan, deferred share unit plan, performance share unit plan or other bonus, profit sharing, incentive, compensation, stock option, pension, retirement, deferred compensation, insurance, incentive compensation, compensation employment or other similar employee benefit plan, agreement, trust, fund or arrangement for the benefit or welfare of directors any employee;
(g) not take any action, which would render, or senior officers which reasonably may be expected to render, any representation or former directors warranty made by it in this Agreement untrue in any material respect at any time prior to the Effective Time if then made, and promptly notify the Acquiror first immediately orally and then promptly in writing of the occurrence of any event or senior officers condition that has, or is reasonably likely to have, a Material Adverse Effect in respect of the Company in the course of its or any Company Subsidiary's businesses or in the operation of its subsidiaries; or
(viii) take or any action to accelerate the time of payment Company Subsidiary's properties and of any compensation material governmental or benefitsthird party complaints, amend investigations or waive any performance hearings (or vesting criteria or accelerate vesting under communications indicating that the Stock Option Plan, except in accordance with its terms as contemplated herein or thereinsame may be contemplated);
(h) neither the Company nor its subsidiaries will make not authorize or propose or enter into or modify any loan contract, agreement, commitment or arrangement to do any officer, director, employee or consultant of the Company or its subsidiariesmatters prohibited by the other paragraphs of this Section 5.1;
(i) not enter into or adopt any shareholder rights plan or similar agreement or arrangement;
(j) (i) duly and timely file all Tax Returns required to be filed by it on or after the Company will date hereof and all such Tax Returns shall be true, complete and correct in all material respects, (ii) timely pay all Taxes which are due and payable, (iii) not make or rescind any material express or deemed election relating to Taxes, (iv) not make a request for a Tax ruling or enter into a closing agreement with any taxing authorities, (v) not settle or compromise any claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to Taxes, and (vi) not change in any material respect any of its methods of reporting losses, deductions or accounting for income tax purposes from those employed in the preparation of its Tax Return for the most recent taxation year, except as may be required by applicable Law;
(k) use its commercially reasonable efforts to cause the its current insurance (or re-re- insurance) policies maintained by the Company, including directors’ and officers’ insurance, not to be cancelled or terminated and to prevent or any of the coverage thereunder from lapsingto lapse unless, unless at the time of simultaneously with such terminationcancellation, cancellation termination or lapse, replacement policies underwritten by insurance or and re-insurance companies of nationally recognized standing having comparable deductions and providing coverage comparable equal to or greater than the coverage under the cancelled, terminated or lapsed policies for substantially similar premiums are in full force and effect, provided, however, that, except as contemplated by Section 4.8(b), the Company will not obtain or renew any insurance (or re-insurance) policy for a term exceeding 12 months;
(j) the Company will use commercially reasonable efforts to retain the services of its and its subsidiaries’ existing employees and consultants (including the Exeter Senior Management) and will promptly provide written notice to the Purchaser of the resignation or termination of any of its key employees or consultants;
(k) neither the Company nor its subsidiaries will make an application to amend, terminate, allow to expire or lapse or otherwise modify any of its Permits or take any action or fail to take any action which action or failure to act would result in the material loss, expiration or surrender of, or the loss of any material benefit under, or reasonably be expected to cause any Governmental Authority to institute proceedings for the suspension, revocation or limitation of rights under, any material Permit necessary to conduct its businesses as now being conducted;
(l) the Company and each of its subsidiaries will (i) duly and timely file all Returns required to be filed not engage in any business, enterprise or other activity different from that carried on by it on or after at the date hereof and all such Returns will be true, complete and correct in all material respects and (ii) timely withhold, collect, remit and pay all Taxes which are to be withheld, collected, remitted or paid by it to the extent due and payable except for any Taxes contested in good faith pursuant to applicable Laws, and the Company will not (A) change its tax accounting methods, principles or practices, except insofar as may have been required by a change in IFRS or applicable Law, (B) settle, compromise or agree to the entry of judgment with respect to any action, claim or other Proceeding relating to Taxes, (other than the payment, discharge or satisfaction of liabilities reflected or reserved against in the Financial Statements) (C) enter into any tax sharing, tax allocation or tax indemnification agreement, (D) make a request for a tax ruling to any Governmental Authority, or (E) agree to any extension or waiver of the limitation period relating to any material Tax claim or assessment or reassessment;
(m) the Company will not, and will not cause or permit its subsidiaries to, settle or compromise any action, claim or other Proceeding (i) brought against it for damages or providing for the grant of injunctive relief or other non-monetary remedy (“Litigation”) or (ii) brought by any present, former or purported holder of its securities in connection with the Contemplated Transactions;
(n) the Company will not, and will not cause or permit its subsidiaries to, commence any Litigation (other than litigation in connection with the collection of accounts receivable, to enforce the terms of this Agreement or the Confidentiality Agreement, to enforce other obligations of the Purchaser or as a result of litigation commenced against the Company);
(o) the Company will not, and will not cause or permit its subsidiaries to, enter into or renew any Contract (i) containing (A) any limitation or restriction on the ability of the Company or its subsidiaries or, following the Effective Time, the ability of the Purchaser or any of its affiliates, to engage in any type of activity or business, (B) any limitation or restriction on the manner in which, or the localities in which, all or any portion of the business of the Company or its subsidiaries or, following the Effective Time, all or any portion of the business of the Purchaser or any of its affiliates, is or would be conducted or (C) any limit or restriction on the ability of the Company or its subsidiaries or, following the Effective Time, the ability of the Purchaser or any of its affiliates, to solicit customers or employees, or (ii) that would reasonably be expected to prevent or significantly impede or materially delay the completion of the Contemplated Transactions;
(p) the Company will not, and will not cause or permit any of its subsidiaries to, take any action which would render, or which reasonably may be expected to render, any representation or warranty made by the Company in this Agreement untrue or inaccurate in any material respect (disregarding for this purpose all materiality or have a Material Adverse Effect qualifications contained therein) at any time prior to on the Effective Time if then madeCompany; and
(qm) make or cooperate as is applicable, necessary in the Company will not, making of all necessary filings and will not cause or permit its subsidiaries to, agree, announce, resolve, authorize or commit applications under all applicable Law required in connection with the transactions contemplated herein and take all reasonable action necessary to do any of the foregoingbe in compliance with such Laws.
Appears in 1 contract
Samples: Arrangement Agreement (Northern Dynasty Minerals LTD)
Covenants of the Company Regarding the Conduct of Business. The Company covenants and agrees that, until that prior to the earlier of the Effective Time and the Date or such time that as this Agreement is terminated in accordance with its terms, unless except (i) with the Purchaser otherwise consents in writing prior written consent of Xxxxxx (not to the extent that such consent is permitted by applicable Lawbe unreasonably withheld or delayed), which consent will not be unreasonably withheld, conditioned (ii) as otherwise expressly contemplated or delayed, or expressly permitted or specifically contemplated by this Agreement, or (iii) as set out in the Exeter Disclosure Letter or as is otherwise required by applicable LawLaw or any Government Entities:
(a) except as provided for in the Budget, the Company shall, and shall cause each of its Subsidiaries to, conduct its and their respective businesses in, not take any action except in, and maintain their respective facilities in, the ordinary course of business consistent with past practice and to use commercially reasonable efforts to preserve intact its and their present business organization and goodwill, to preserve intact the Company, its Properties and Mineral Rights, to keep available the services of its officers and employees as a group and to maintain satisfactory relationships consistent with past practice with suppliers, distributors, employees, Governmental Entities and others having business relationships with them;
(b) without limiting the generality of Subsection 5.1(a), the Company shall not, directly or indirectly, and shall cause each of its Subsidiaries not to:
(i) issue, sell, grant, award, pledge, dispose of, encumber or agree to issue, sell, grant, award, pledge, dispose of or encumber any Company Shares, Company Options, Company Warrants or any calls, conversion privileges or rights of any kind to acquire any Company Shares or other securities or any shares of its Subsidiaries (including, for greater certainty, Company Options, Company DSUs, Company PSUs, Company RSUs or any other equity based awards), other than (A) the issuance of Company Options and Company DSUs, pursuant to agreements already entered into and in effect as of the date hereof which have been disclosed in the Company and its subsidiaries will be conducted only Disclosure Letter or in the ordinary course of business and consistent with past practice to newly hired Company Employees or (B) pursuant to the exercise of Company Options, Company Warrants or Company DSUs existing as of the date hereof;
(ii) except as provided for in accordance with the Exeter BudgetBudget or as disclosed in the Company Public Documents and for sales of minerals in the ordinary course of business, sell, pledge, lease, dispose of, mortgage, licence, encumber or agree to sell, pledge, dispose of, mortgage, licence, encumber or otherwise transfer any assets of the Company or any of its Subsidiaries or any interest in any assets of the Company and its subsidiaries will comply with the terms of all Material Contracts and the Company and its subsidiaries will use commercially reasonable efforts to maintain and preserve intact its business organizations, assets, properties, rights, goodwill and business relationships and keep available the services of its officers, employees and consultants as Subsidiaries having a group;
(b) the Company will cooperate and consult through meetings with the Purchaser, as the Purchaser may reasonably request, to allow the Purchaser to monitor, and provide reasonable input with respect to the direction of, any activities relating to the exploration and maintenance of Exeter Properties and discuss with the Purchaser prior to any required public disclosure of exploration results or other technical information provided nothing contained in this Section 4.1(b) shall prevent the Company from publicly disclosing any information required by Law or the rules or policies of the TSX or NYSE MKT after prior notice to the Purchaser and, other value greater than as contemplated by the Exeter Budget, will not make any capital expenditures or other financial commitments in excess of $500,000 or $2,000,000 5,000,000 in the aggregate;
(ciii) the Company will not, directly amend or indirectly:
(i) alter or propose to amend the notice of articles, articles, charter, by-laws or other constating documents or the terms of any securities of the Company or any of its subsidiariesSubsidiaries;
(iiiv) split, combine or reclassify any outstanding Company Shares or the securities of any of its Subsidiaries;
(v) redeem, purchase or offer to purchase any Company Shares or other securities of the Company or any shares or other securities of its Subsidiaries;
(vi) declare, set aside or pay any dividend on or make other distribution (whether in cash, securities or property or any distribution or payment or return of capital combination thereof) in respect of any equity securities Company Shares other than in the ordinary course of business and consistent with past practice except, in the case of any of the Company (other than dividendsCompany’s wholly-owned Subsidiaries, distributions, payments or return of capital made for dividends payable to the Company);
(iiivii) splitreorganize, divide, consolidate, combine amalgamate or reclassify merge the Exeter Shares Company or any of its Subsidiaries with any other securities Person;
(viii) reduce the stated capital of the shares of the Company or of any of its subsidiariesSubsidiaries;
(ivix) issueexcept as provided for in the Budget and other than cash management investments made in accordance with the Company’s existing cash management policies and practices, grant, sell or pledge or authorize acquire or agree to issueacquire (by merger, grantamalgamation, sell acquisition of shares or pledge assets or otherwise) any Exeter Shares or other securities of the Company or its subsidiariesPerson, or securities convertible into make any investment either by purchase of shares or exchangeable or exercisable forsecurities, or otherwise evidencing a right to acquire, Exeter Shares or other securities contributions of the Company or its subsidiaries, capital (other than to wholly-owned Subsidiaries), property transfer or purchase of any property or assets of any other Person that has a value greater than $5,000,000 in the issuance of Exeter Shares issuable pursuant to the terms of Exeter Options outstanding on the date hereofaggregate;
(vx) redeemexcept as provided for in the Budget, purchase incur, create, assume or otherwise acquire or subject to become liable for any Lien, any of its outstanding Exeter Shares or other securities or securities convertible into or exchangeable or exercisable indebtedness for Exeter Shares borrowed money or any such other securities material liability or obligation or issue any shares debt securities, except for the borrowing of working capital in the ordinary course of business consistent with past practice, or guarantee, endorse or otherwise as an accommodation become responsible for, the obligations of any other securities Person or make any loans or advances in excess of its subsidiaries$5,000,000 in the aggregate;
(vi) other than as set out in Section 4.1(c)(vi) of the Exeter Disclosure Letter, amend the terms of any securities of the Company or its subsidiaries;
(viixi) adopt a plan of liquidation or resolution resolutions providing for the liquidation or dissolution of the Company or any of its subsidiariesSubsidiaries;
(viii) reorganize, amalgamate or merge with any other person and will not cause or permit its subsidiaries to reorganize, amalgamate or merge with any other person;
(ix) create any subsidiary or enter into any Contracts or other arrangements regarding the control or management of the operations, or the appointment of governing bodies or enter into any Joint Ventures;
(x) make any material changes to any of its accounting policies, principles, methods, practices or procedures (including by adopting any material new accounting policies, principles, methods, practices or procedures), except as disclosed in the Public Disclosure Record, as required by applicable Laws or under IFRS; or
(xi) enter into, modify or terminate any Contract with respect to any of the foregoing;
(d) the Company will immediately notify the Purchaser orally and then promptly notify the Purchaser in writing of (i) any “material change” (as defined in the Securities Act) in relation to the Company or its subsidiaries, (ii) any event, circumstance or development that has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, (iii) any breach of this Agreement by the Company, or (iv) any event occurring after the date of this Agreement that would render a representation or warranty, if made on that date or the Effective Time, inaccurate;
(e) except as contemplated in the Exeter Budget, the Company will not, and will not cause or permit its subsidiaries to, directly or indirectly, except in connection with this Agreement:
(i) sell, pledge, lease, licence, dispose of or encumber any assets or properties of the Company or its subsidiaries related to the Material Property;
(ii) acquire (by merger, amalgamation, consolidation, arrangement or acquisition of shares or other equity securities or interests or assets or otherwise) any corporation, partnership, association or other business organization or division thereof or any property or asset, or make any investment by the purchase of securities, contribution of capital, property transfer, or purchase of any property or assets of any other person;
(iii) incur any expenses (except in the ordinary course of business consistent with past practice in the last 12 months, as required to exercise its rights and discharge its obligations under this Agreement, or as contemplated in the Exeter Budget) or incur any indebtedness for borrowed money or issue any debt securities, or assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other person, or make any loans or advances;
(ivxii) pay, discharge discharge, settle, satisfy, compromise, waive, assign or satisfy release any claimclaims, liability liabilities or obligation prior to obligations for an amount exceeding $5,000,000 in the same being due, aggregate other than the payment, discharge or satisfaction, in the ordinary course of businessbusiness consistent with past practice, of liabilities reflected or reserved against in the Financial Statements, Company’s financial statements or voluntarily waive, release, assign, settle or compromise any Proceeding;
(v) make any investment in or to Chile or any person or property located, domiciled or otherwise incorporated, as applicable, in Chile, including but not limited to, in the form of cash, cash equivalents, loan, purchase of securities, contribution of capital, property transfer or purchase of any property or assets (except incurred in the ordinary course of business consistent with past practice in the last 12 months or as contemplated in the Exeter Budget)practice;
(vixiii) engage waive, release, grant, transfer, exercise, modify or amend in any new businessmaterial respect, enterprise or other activity that is inconsistent with the existing businesses of the Company in the manner such existing businesses generally have been carried on or (as disclosed in the Public Disclosure Record) planned or proposed to be carried on prior to the date of this Agreement;
(vii) except as provided for in the Exeter Budget in respect of any Exeter Property or as are required by applicable Laws to maintain any Permits in good standing, expend or commit to expend any amounts with respect to expenses for such Exeter Property; or
(viii) authorize any of the foregoing, or enter into or modify any Contract to do any of the foregoing;
(f) the Company will not, and will not cause or permit its subsidiaries to, directly or indirectly, except than in the ordinary course of business:
the business consistent with past practice, (i) terminateany existing contractual rights in respect of any Mineral Rights or Properties, fail to renew(ii) any material Authorization, cancellease, waiveconcession, releasecontract or other document, grant or transfer (iii) any other material legal rights of material valueor claims;
(iixiv) except in connection with matters otherwise permitted under this Section 4.1, enter into any Contract which would be a Material Contract if in existence on the date hereof, or terminate, cancel, extend, renew or amend, modify or change any Material Contract;
(iii) enter into any lease or sublease of real property (whether as a lessor, sublessor, lessee or sublessee), or modify, amend or exercise any right to renew any lease or sublease of real property or acquire any interest in real property; or
(iv) enter into any Contract containing any provision restricting or triggered by the Contemplated Transactions;
(g) Neither the Company nor its subsidiaries will, except in the ordinary course of business or pursuant to any existing Contracts or employment, pension, supplemental pension, termination or compensation arrangements or policies or plans in effect on the date hereof, and except as is necessary to comply with applicable Laws:
(i) grant to any officer, director, employee or consultant of the Company or its subsidiaries an increase in compensation in any form;
(ii) grant any general salary increase, fee or pay any bonus or other material compensation to the directors, officers, employees or consultants of the Company and its subsidiaries;
(iii) except as set out in Section 4.1(g)(iii) of the Exeter Disclosure Letter, take any action with respect to the grant or increase of any severance, change of control, retirement, retention or termination pay;
(iv) enter into or modify any employment or consulting agreement with any officer or director of the Company or its subsidiaries;
(v) terminate the employment or consulting arrangement of any senior management employees (including the Exeter Senior Management), except for cause;
(vi) increase any benefits payable under its current severance or termination pay policies;
(vii) other than as set out in Section 4.1(g)(vii) of the Exeter Disclosure Letter, adopt or amend or make any contribution to or any award under the Stock Option Plan, any restricted share unit plan, deferred share unit plan, performance share unit plan or other bonus, profit sharing, option, pension, retirement, deferred compensation, insurance, incentive compensation, compensation or other similar plan, agreement, trust, fund or arrangement for the benefit of directors or senior officers or former directors or senior officers of the Company or its subsidiaries; or
(viii) take any action to accelerate the time of payment of any compensation or benefits, amend or waive any performance or vesting criteria or accelerate vesting under the Stock Option Plan, except in accordance with its terms as contemplated herein or therein;
(h) neither the Company nor its subsidiaries will make any loan to any officer, director, employee or consultant of the Company or its subsidiaries;
(i) the Company will use its commercially reasonable efforts to cause the current insurance (or re-insurance) policies maintained by the Company, including directors’ and officers’ insurance, not to be cancelled or terminated and to prevent any of the coverage thereunder from lapsing, unless at the time of such termination, cancellation or lapse, replacement policies underwritten by insurance or re-insurance companies of nationally recognized standing having comparable deductions and providing coverage comparable to or greater than the coverage under the cancelled, terminated or lapsed policies for substantially similar premiums are in full force and effect, provided, however, that, except as contemplated by Section 4.8(b), the Company will not obtain or renew any insurance (or re-insurance) policy for a term exceeding 12 months;
(j) the Company will use commercially reasonable efforts to retain the services of its and its subsidiaries’ existing employees and consultants (including the Exeter Senior Management) and will promptly provide written notice to the Purchaser of the resignation or termination of any of its key employees or consultants;
(k) neither the Company nor its subsidiaries will make an application to amend, terminate, allow to expire or lapse or otherwise modify any of its Permits or take any action or fail to take any action which action or failure to act would result in the material loss, expiration or surrender of, or the loss of any material benefit under, or reasonably be expected to cause any Governmental Authority Entities to institute proceedings for the suspension, revocation or limitation of rights under, any material Permit Permits necessary to conduct its businesses as now being conducted;
(lxv) take any action or fail to take any action that is intended to, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the ability of the Company to consummate the Arrangement or the other transactions contemplated by this Agreement, other than in connection with a Pre-Acquisition Reorganization;
(xvi) other than as required pursuant to agreements already entered into and each in existence as of its subsidiaries will (i) duly and timely file all Returns required to be filed by it on or after the date hereof and all such Returns will be true, complete and correct which have been set out in all material respects and (iiSchedule 5.1(b)(xvi) timely withhold, collect, remit and pay all Taxes which are to be withheld, collected, remitted or paid by it to the extent due and payable except for any Taxes contested in good faith pursuant to applicable Laws, and of the Company will not (A) change its tax accounting methodsDisclosure Letter, principles increase the compensation or practices, except insofar as may have been required by a change in IFRS benefits payable or applicable Law, (B) settle, compromise or agree to the entry of judgment with respect to any action, claim or other Proceeding relating to Taxes, (other than the payment, discharge or satisfaction of liabilities reflected or reserved against in the Financial Statements) (C) enter into any tax sharing, tax allocation or tax indemnification agreement, (D) make a request for a tax ruling to any Governmental Authority, or (E) agree to any extension or waiver of the limitation period relating to any material Tax claim or assessment or reassessment;
(m) the Company will not, and will not cause or permit its subsidiaries to, settle or compromise any action, claim or other Proceeding (i) brought against it for damages or providing for the grant of injunctive relief or other non-monetary remedy (“Litigation”) or (ii) brought by any present, former or purported holder of its securities in connection with the Contemplated Transactions;
(n) the Company will not, and will not cause or permit its subsidiaries to, commence any Litigation (other than litigation in connection with the collection of accounts receivable, to enforce the terms of this Agreement or the Confidentiality Agreement, to enforce other obligations of the Purchaser or as a result of litigation commenced against the Company);
(o) the Company will not, and will not cause or permit its subsidiaries become payable to, enter into or renew modify any Contract employment, severance, or similar agreements or arrangements with, or grant any bonuses, salary increases, severance or termination pay to, in each case, any director, officer, or current or former Company Employee (whether from the Company or any of its Subsidiaries) paid a base salary of at least $150,000 per annum;
(xvii) loan or advance money or other property by the Company or its Subsidiaries to any current or former Company Employees other than in the ordinary course of business consistent with past practice; or
(xviii) establish, adopt, enter into, amend in any material manner or terminate any Company Benefit Plan (or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Benefit Plan if it were in existence as of the date hereof) or collective bargaining agreement;
(c) the Company shall not, and shall cause each of its Subsidiaries not to, establish, adopt, enter into, amend or waive any performance or vesting criteria or accelerate vesting, exercisability or funding under any bonus, profit sharing, thrift, incentive, compensation, stock option, restricted stock, pension, retirement, deferred compensation, savings, welfare, employment, termination, severance or other employee benefit plan, agreement, trust, fund, policy or arrangement for the benefit or welfare of any directors, officers, current or former employees of the Company or its Subsidiaries;
(d) the Company shall use all reasonable commercial efforts to cause its current insurance (or re-insurance) policies not to be cancelled or terminated or any of the coverage thereunder to lapse, unless simultaneously with such termination, cancellation or lapse, replacement policies underwritten by insurance and re-insurance companies of nationally recognized standing providing coverage equal to or greater than the coverage under the cancelled, terminated or lapsed policies for substantially similar premiums are in full force and effect;
(e) the Company shall use its commercially reasonable best efforts to maintain and preserve all of its rights under each of its Mineral Rights and Properties and under each of its Authorizations;
(f) the Company shall:
(i) provide Xxxxxx with prompt written notice of, to its knowledge, any change (or any condition, event, circumstance or development involving a prospective change) in the business, assets, operations, capitalization, condition (financial or otherwise), share or debt ownership, results of operations, cash flows, properties (including the Properties and Mineral Rights), articles, by-laws, licenses, permits (including Authorizations), rights, or privileges, whether contractual or otherwise, or liabilities (including any contingent liabilities that may arise through outstanding, pending or threatened litigation or otherwise), of the Company or any of its Subsidiaries which, when considered either individually or in the aggregate, has resulted in or would reasonably be expected to result in a Company Material Adverse Effect;
(ii) not enter into or renew any agreement, contract, lease, licence or other binding obligation of the Company or its Subsidiaries (A) containing (A1) any limitation or restriction on the ability of the Company or its subsidiaries Subsidiaries or, following completion of the Effective Timetransactions contemplated hereby, the ability of the Purchaser Xxxxxx or any of its affiliatesSubsidiaries, to engage in any type of activity or business, (B2) any limitation or restriction on the manner in which, or the localities in which, all or any portion of the business of the Company or its subsidiaries Subsidiaries or, following consummation of the Effective Timetransactions contemplated hereby, all or any portion of the business of the Purchaser Xxxxxx or any of its affiliatesSubsidiaries, is or would be conducted conducted, or (C3) any limit or restriction on the ability of the Company or its subsidiaries Subsidiaries or, following completion of the Effective Timetransactions contemplated hereby, the ability of the Purchaser Xxxxxx or any of its affiliatesSubsidiaries, to solicit customers or employees, or (iiB) that would reasonably be expected to prevent or significantly impede or materially delay or prevent the completion consummation of the Contemplated Transactionstransactions contemplated by this Agreement;
(piii) except as provided for in the Budget or in the ordinary course of business consistent with past practice, not enter into or renew any agreement, contract, lease, licence or other binding obligation of the Company will not, and will or its Subsidiaries that is not cause terminable within 30 days of the Effective Date without payment by Xxxxxx or permit any of its subsidiaries to, take any action which Subsidiaries that involves or would render, or which reasonably may be expected to render, any representation or warranty made by involve payments in excess of $5,000,000 in the Company in this Agreement untrue or inaccurate in any material respect (disregarding for this purpose all materiality or Material Adverse Effect qualifications contained therein) at any time prior to aggregate over the Effective Time if then madeterm of the contract; and
(qiv) except as is applicablemay be set forth in the Budget, not incur any capital expenditures or enter into any agreement obligating the Company or its Subsidiaries to provide for future capital expenditures involving payments in excess of $10,000,000 in the aggregate;
(g) the Company and each of its Subsidiaries shall:
(i) duly and timely file all material Tax Returns required to be filed by it on or after the date hereof and all such Tax Returns will notbe true, complete and correct in all material respects;
(ii) timely withhold, collect, remit and pay all material Taxes which are to be withheld, collected, remitted or paid by it to the extent due and payable;
(iii) not make or rescind any material express or deemed election relating to Taxes;
(iv) except as set out in Schedule 5.1(g)(iv) of the Company Disclosure Letter not make a request for a Tax ruling or enter into any agreement with any taxing authorities or consent to any extension or waiver of any limitation period with respect to Taxes;
(v) not settle or compromise any claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to Taxes in excess of 5,000,000; and
(vi) not amend any Tax Return or change any of its methods of reporting income, deductions or accounting for income Tax purposes from those employed in the preparation of its income Tax Return for the tax year ended March 31, 2010, except as may be required by applicable Laws;
(h) the Company shall not initiate any material discussions, negotiations or filings with any Governmental Entity regarding any matter with respect to the Arrangement or the transactions contemplated by this Agreement or regarding the status of the Property or the Mineral Rights without the prior consent of Xxxxxx, such consent not to be unreasonably withheld, and will further agrees to provide Xxxxxx with notice as promptly as reasonably practicable of any material communication with respect to such matters (whether oral or written) from a Governmental Entity, including a copy of any written communication; and
(i) the Company shall not cause or permit its subsidiaries to, agree, announce, resolve, authorize or commit propose, or enter into or modify any contract, agreement, commitment or arrangement, to do any of the foregoingmatters prohibited by the other Subsections of this Section 5.1.
Appears in 1 contract
Covenants of the Company Regarding the Conduct of Business. The Company covenants and agrees that, until the earlier of the Effective Time and the time that this Agreement is terminated in accordance with its terms, unless the Purchaser otherwise consents in writing (to the extent that such consent is permitted by applicable Law), which consent will not be unreasonably withheld, conditioned or delayed, or expressly permitted or specifically contemplated by this Agreement, or as set out in the Exeter Disclosure Letter or as is otherwise required by applicable Law:
(a) the businesses of the Company and its subsidiaries will be conducted only in the ordinary course of business and in accordance with the Exeter Budget, the Company and its subsidiaries will comply with the terms of all Material Contracts and the Company and its subsidiaries will use commercially reasonable efforts to maintain and preserve intact its business organizations, assets, properties, rights, goodwill and business relationships and keep available the services of its officers, employees and consultants as a group;
(b) the Company will cooperate and consult through meetings with the Purchaser, as the Purchaser may reasonably request, to allow the Purchaser to monitor, and provide reasonable input with respect to the direction of, any activities relating to the exploration and maintenance of Exeter Properties and discuss with the Purchaser prior to any required public disclosure of exploration results or other technical information provided nothing contained in this Section 4.1(b) shall prevent the Company from publicly disclosing any information required by Law or the rules or policies of the TSX or NYSE MKT after prior notice to the Purchaser and, other than as contemplated by the Exeter Budget, will not make any capital expenditures or other financial commitments in excess of $500,000 or $2,000,000 in the aggregate;
(c) the Company will not, directly or indirectly:
(i) alter or amend the notice of articles, articles, charter, by-laws or other constating documents of the Company or its subsidiaries;
(ii) declare, set aside or pay any dividend on or make any distribution or payment or return of capital in respect of any equity securities of the Company (other than dividends, distributions, payments or return of capital made to the Company);
(iii) split, divide, consolidate, combine or reclassify the Exeter Shares or any other securities of the Company or its subsidiaries;
(iv) issue, grant, sell or pledge or authorize or agree to issue, grant, sell or pledge any Exeter Shares or other securities of the Company or its subsidiaries, or securities convertible into or exchangeable or exercisable for, or otherwise evidencing a right to acquire, Exeter Shares or other securities of the Company or its subsidiaries, other than the issuance of Exeter Shares issuable pursuant to the terms of Exeter Options outstanding on the date hereof;
(v) redeem, purchase or otherwise acquire or subject to any Lien, any of its outstanding Exeter Shares or other securities or securities convertible into or exchangeable or exercisable for Exeter Shares or any such other securities or any shares or other securities of its subsidiaries;
(vi) other than as set out in Section 4.1(c)(vi) of the Exeter Disclosure Letter, amend the terms of any securities of the Company or its subsidiaries;
(vii) adopt a plan of liquidation or resolution providing for the liquidation or dissolution of the Company or its subsidiaries;
(viii) reorganize, amalgamate or merge with any other person and will not cause or permit its subsidiaries to reorganize, amalgamate or merge with any other person;
(ix) create any subsidiary or enter into any Contracts or other arrangements regarding the control or management of the operations, or the appointment of governing bodies or enter into any Joint Ventures;
(x) make any material changes to any of its accounting policies, principles, methods, practices or procedures (including by adopting any material new accounting policies, principles, methods, practices or procedures), except as disclosed in the Public Disclosure Record, as required by applicable Laws or under IFRS; or
(xi) enter into, modify or terminate any Contract with respect to any of the foregoing;
(d) the Company will immediately notify the Purchaser orally and then promptly notify the Purchaser in writing of (i) any “material change” (as defined in the Securities Act) in relation to the Company or its subsidiaries, (ii) any event, circumstance or development that has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, (iii) any breach of this Agreement by the Company, or (iv) any event occurring after the date of this Agreement that would render a representation or warranty, if made on that date or the Effective TimeDate, inaccurateinaccurate such that any of the conditions in Section 7.3(b) would not be satisfied;
(e) except as contemplated in the Exeter Budget, the Company will not, and will not cause or permit its subsidiaries to, directly or indirectly, except in connection with this Agreement:
(i) sell, pledge, lease, licence, dispose of or encumber any assets or properties of the Company or its subsidiaries related to the Material Property;
(ii) acquire (by merger, amalgamation, consolidation, arrangement or acquisition of shares or other equity securities or interests or assets or otherwise) any corporation, partnership, association or other business organization or division thereof or any property or asset, or make any investment by the purchase of securities, contribution of capital, property transfer, or purchase of any property or assets of any other person;
(iii) incur any expenses (except in the ordinary course of business consistent with past practice in the last 12 months, as required to exercise its rights and discharge its obligations under this Agreement, or as contemplated in the Exeter Budget) or incur any indebtedness for borrowed money or issue any debt securities, or assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other person, or make any loans or advances;
(iv) pay, discharge or satisfy any claim, liability or obligation prior to the same being due, other than the payment, discharge or satisfaction, in the ordinary course of business, of liabilities reflected or reserved against in the Financial Statements, or voluntarily waive, release, assign, settle or compromise any Proceeding;
(v) make any investment in or to Chile or any person or property located, domiciled or otherwise incorporated, as applicable, in Chile, including but not limited to, in the form of cash, cash equivalents, loan, purchase of securities, contribution of capital, property transfer or purchase of any property or assets (except in the ordinary course of business consistent with past practice in the last 12 months or as contemplated in the Exeter Budget);
(vi) engage in any new business, enterprise or other activity that is inconsistent with the existing businesses of the Company in the manner such existing businesses generally have been carried on or (as disclosed in the Public Disclosure Record) planned or proposed to be carried on prior to the date of this Agreement;
(vii) except as provided for in the Exeter Budget in respect of any Exeter Property or as are required by applicable Laws to maintain any Permits in good standing, expend or commit to expend any amounts with respect to expenses for such Exeter Property; or
(viii) authorize any of the foregoing, or enter into or modify any Contract to do any of the foregoing;
(f) the Company will not, and will not cause or permit its subsidiaries to, directly or indirectly, except in the ordinary course of business:
(i) terminate, fail to renew, cancel, waive, release, grant or transfer any rights of material value;
(ii) except in connection with matters otherwise permitted under this Section 4.1, enter into any Contract which would be a Material Contract if in existence on the date hereof, or terminate, cancel, extend, renew or amend, modify or change any Material Contract;
(iii) enter into any lease or sublease of real property (whether as a lessor, sublessor, lessee or sublessee), or modify, amend or exercise any right to renew any lease or sublease of real property or acquire any interest in real property; or
(iv) enter into any Contract containing any provision restricting or triggered by the Contemplated Transactionstransactions contemplated herein;
(g) Neither the Company nor its subsidiaries will, except in the ordinary course of business or pursuant to any existing Contracts or employment, pension, supplemental pension, termination or compensation arrangements or policies or plans in effect on the date hereof, and except as is necessary to comply with applicable Laws:
(i) grant to any officer, director, employee or consultant of the Company or its subsidiaries an increase in compensation in any form;
(ii) grant any general salary increase, fee or pay any bonus or other material compensation to the directors, officers, employees or consultants of the Company and its subsidiaries;
(iii) except as set out in Section 4.1(g)(iii) of the Exeter Disclosure Letter, take any action with respect to the grant or increase of any severance, change of control, retirement, retention or termination pay;
(iv) enter into or modify any employment or consulting agreement with any officer or director of the Company or its subsidiaries;
(v) terminate the employment or consulting arrangement of any senior management employees (including the Exeter Senior Management), except for cause;
(vi) increase any benefits payable under its current severance or termination pay policies;
(vii) other than as set out in Section 4.1(g)(vii) of the Exeter Disclosure Letter, adopt or amend or make any contribution to or any award under the Stock Option Plan, any restricted share unit plan, deferred share unit plan, performance share unit plan or other bonus, profit sharing, option, pension, retirement, deferred compensation, insurance, incentive compensation, compensation or other similar plan, agreement, trust, fund or arrangement for the benefit of directors or senior officers or former directors or senior officers of the Company or its subsidiaries; or
(viii) take any action to accelerate the time of payment of any compensation or benefits, amend or waive any performance or vesting criteria or accelerate vesting under the Stock Option Plan, except in accordance with its terms as contemplated herein or therein;
(h) neither the Company nor its subsidiaries will make any loan to any officer, director, employee or consultant of the Company or its subsidiaries;
(i) the Company will use its commercially reasonable efforts to cause the current insurance (or re-insurance) policies maintained by the Company, including directors’ and officers’ insurance, not to be cancelled or terminated and to prevent any of the coverage thereunder from lapsing, unless at the time of such termination, cancellation or lapse, replacement policies underwritten by insurance or re-insurance companies of nationally recognized standing having comparable deductions and providing coverage comparable to or greater than the coverage under the cancelled, terminated or lapsed policies for substantially similar premiums are in full force and effect, provided, however, that, except as contemplated by Section 4.8(b), the Company will not obtain or renew any insurance (or re-insurance) policy for a term exceeding 12 months;
(j) the Company will use commercially reasonable efforts to retain the services of its and its subsidiaries’ existing employees and consultants (including the Exeter Senior Management) until the Effective Time, and will promptly provide written notice to the Purchaser of the resignation or termination of any of its key employees or consultants;
(k) neither the Company nor its subsidiaries will make an application to amend, terminate, allow to expire or lapse or otherwise modify any of its Permits or take any action or fail to take any action which action or failure to act would result in the material loss, expiration or surrender of, or the loss of any material benefit under, or reasonably be expected to cause any Governmental Authority to institute proceedings for the suspension, revocation or limitation of rights under, any material Permit necessary to conduct its businesses as now being conducted;
(l) the Company and each of its subsidiaries will (i) duly and timely file all Returns required to be filed by it on or after the date hereof and all such Returns will be true, complete and correct in all material respects and (ii) timely withhold, collect, remit and pay all Taxes which are to be withheld, collected, remitted or paid by it to the extent due and payable except for any Taxes contested in good faith pursuant to applicable Laws, and the Company will not (A) change its tax accounting methods, principles or practices, except insofar as may have been required by a change in IFRS or applicable Law, (B) settle, compromise or agree to the entry of judgment with respect to any action, claim or other Proceeding relating to Taxes, (other than the payment, discharge or satisfaction of liabilities reflected or reserved against in the Financial Statements) (C) enter into any tax sharing, tax allocation or tax indemnification agreement, (D) make a request for a tax ruling to any Governmental Authority, or (E) agree to any extension or waiver of the limitation period relating to any material Tax claim or assessment or reassessment;
(m) the Company will not, and will not cause or permit its subsidiaries to, settle or compromise any action, claim or other Proceeding (i) brought against it for damages or providing for the grant of injunctive relief or other non-monetary remedy (“Litigation”) or (ii) brought by any present, former or purported holder of its securities in connection with the Contemplated Transactionstransactions contemplated by this Agreement or the Arrangement;
(n) the Company will not, and will not cause or permit its subsidiaries to, commence any Litigation (other than litigation in connection with the collection of accounts receivable, to enforce the terms of this Agreement or the Confidentiality Agreement, to enforce other obligations of the Purchaser or as a result of litigation commenced against the Company);
(o) the Company will not, and will not cause or permit its subsidiaries to, enter into or renew any Contract (i) containing (A) any limitation or restriction on the ability of the Company or its subsidiaries or, following completion of the Effective Timetransactions contemplated hereby, the ability of the Purchaser or any of its affiliates, to engage in any type of activity or business, (B) any limitation or restriction on the manner in which, or the localities in which, all or any portion of the business of the Company or its subsidiaries or, following consummation of the Effective Timetransactions contemplated hereby, all or any portion of the business of the Purchaser or any of its affiliates, is or would be conducted or (C) any limit or restriction on the ability of the Company or its subsidiaries or, following completion of the Effective Timetransactions contemplated hereby, the ability of the Purchaser or any of its affiliates, to solicit customers or employees, or (ii) that would reasonably be expected to prevent or significantly impede or materially delay the completion of the Contemplated TransactionsArrangement;
(p) the Company will not, and will not cause or permit any of its subsidiaries to, take any action which would render, or which reasonably may be expected to render, any representation or warranty made by the Company in this Agreement untrue or inaccurate in any material respect (disregarding for this purpose all materiality or Material Adverse Effect qualifications contained therein) at any time prior to the Effective Time Date if then made; and
(q) as is applicable, the Company will not, and will not cause or permit its subsidiaries to, agree, announce, resolve, authorize or commit to do any of the foregoing.
Appears in 1 contract
Covenants of the Company Regarding the Conduct of Business. The Company covenants and agrees that, during the period from the date of this Agreement until the earlier of the Effective Time and the time that this Agreement is terminated in accordance with its terms, unless except: (a) as set out in Schedule 5.1 of the Company Disclosure Letter; (b) as required by this Agreement (including, for greater certainty, Section 5.3); (c) as required by applicable Law or by a Governmental Entity; or (d) with the prior written consent of the Purchaser otherwise consents in writing (to the extent that such consent is permitted by applicable Lawnot to be unreasonably withheld in the case of Section 5.1(a), which consent will not be unreasonably withheld(f) to (t) and (v) to (x), conditioned or delayed, or expressly permitted or specifically contemplated by this Agreement, or as set out in the Exeter Disclosure Letter or as is otherwise required by applicable Law:
(a) the businesses of the Company and its subsidiaries will be conducted only in the ordinary course of business and in accordance with the Exeter Budget, the Company and its subsidiaries will comply with the terms of all Material Contracts and the Company and its subsidiaries will use commercially reasonable efforts to maintain and preserve intact its business organizations, assets, properties, rights, goodwill and business relationships and keep available the services of its officers, employees and consultants as a group;
(b) the Company will cooperate and consult through meetings with the Purchaser, as the Purchaser may reasonably request, to allow the Purchaser to monitorshall, and provide reasonable input with respect to the direction of, any activities relating to the exploration and maintenance shall cause each of Exeter Properties and discuss with the Purchaser prior to any required public disclosure of exploration results or other technical information provided nothing contained in this Section 4.1(b) shall prevent the Company from publicly disclosing any information required by Law or the rules or policies of the TSX or NYSE MKT after prior notice to the Purchaser and, other than as contemplated by the Exeter Budget, will not make any capital expenditures or other financial commitments in excess of $500,000 or $2,000,000 in the aggregate;
(c) the Company will not, directly or indirectly:
(i) alter or amend the notice of articles, articles, charter, by-laws or other constating documents of the Company or its subsidiaries;
(ii) declare, set aside or pay any dividend on or make any distribution or payment or return of capital in respect of any equity securities of the Company (other than dividends, distributions, payments or return of capital made to the Company);
(iii) split, divide, consolidate, combine or reclassify the Exeter Shares or any other securities of the Company or its subsidiaries;
(iv) issue, grant, sell or pledge or authorize or agree to issue, grant, sell or pledge any Exeter Shares or other securities of the Company or its subsidiaries, or securities convertible into or exchangeable or exercisable for, or otherwise evidencing a right to acquire, Exeter Shares or other securities of the Company or its subsidiaries, other than the issuance of Exeter Shares issuable pursuant to the terms of Exeter Options outstanding on the date hereof;
(v) redeem, purchase or otherwise acquire or subject to any Lien, any of its outstanding Exeter Shares or other securities or securities convertible into or exchangeable or exercisable for Exeter Shares or any such other securities or any shares or other securities of its subsidiaries;
(vi) other than as set out in Section 4.1(c)(vi) of the Exeter Disclosure Letter, amend the terms of any securities of the Company or its subsidiaries;
(vii) adopt a plan of liquidation or resolution providing for the liquidation or dissolution of the Company or its subsidiaries;
(viii) reorganize, amalgamate or merge with any other person and will not cause or permit its subsidiaries to reorganize, amalgamate or merge with any other person;
(ix) create any subsidiary or enter into any Contracts or other arrangements regarding the control or management of the operations, or the appointment of governing bodies or enter into any Joint Ventures;
(x) make any material changes to any of its accounting policies, principles, methods, practices or procedures (including by adopting any material new accounting policies, principles, methods, practices or procedures), except as disclosed in the Public Disclosure Record, as required by applicable Laws or under IFRS; or
(xi) enter into, modify or terminate any Contract with respect to any of the foregoing;
(d) the Company will immediately notify the Purchaser orally and then promptly notify the Purchaser in writing of (i) any “material change” (as defined in the Securities Act) in relation to the Company or its subsidiaries, (ii) any event, circumstance or development that has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, (iii) any breach of this Agreement by the Company, or (iv) any event occurring after the date of this Agreement that would render a representation or warranty, if made on that date or the Effective Time, inaccurate;
(e) except as contemplated in the Exeter Budget, the Company will not, and will not cause or permit its subsidiaries to, directly or indirectly, except in connection with this Agreement:
(i) sell, pledge, lease, licence, dispose of or encumber any assets or properties of the Company or conduct its subsidiaries related to the Material Property;
(ii) acquire (by merger, amalgamation, consolidation, arrangement or acquisition of shares or other equity securities or interests or assets or otherwise) any corporation, partnership, association or other business organization or division thereof or any property or asset, or make any investment by the purchase of securities, contribution of capital, property transfer, or purchase of any property or assets of any other person;
(iii) incur any expenses (except in the ordinary course of business consistent with past practice practice, and shall use its commercially reasonable efforts to maintain its business organization, operations and goodwill and assets (which, for greater certainty, shall be in good working condition except for normal wear and tear) to keep available the services of its employees and to maintain satisfactory relationships with others having business relationships with the Company, to comply in all material respects with the terms of all Material Contracts and with applicable Laws and not make any material change in its business, assets, liabilities, operations, capital or affairs. Without limiting the generality of the foregoing, during such above-mentioned time period and subject to such above-mentioned exceptions, the Company shall not, nor shall it permit any of its subsidiaries to directly or indirectly:
(a) amend its articles, notice of articles or by-laws or similar constating documents;
(b) split, combine or reclassify any shares of the Company, or declare, set aside or pay any dividends or make any other distributions payable in cash, securities, property or otherwise, other than dividends or distributions from a subsidiary of the Company to the Company or to a wholly-owned subsidiary of the Company;
(c) redeem, repurchase, or otherwise acquire or offer to redeem, repurchase or otherwise acquire any shares of capital stock of the Company or any of its subsidiaries, except for the acquisition of shares of capital stock of any wholly-owned subsidiary of the Company by the Company or by any other wholly-owned subsidiary of the Company;
(d) issue, deliver or sell, pledge, lease, dispose of, or grant any Lien with respect to, or authorize the issuance, delivery, sale, pledge, lease, disposition, or grant of any Lien with respect to, any shares of capital stock, or any options, warrants, derivative securities or similar rights exercisable or exchangeable for or convertible into such capital stock of the Company or any of its subsidiaries other than: (i) the issuance of Shares on the exercise of Options outstanding on the date hereof under the Stock Option Plan; and (ii) the issuance of any shares of capital stock of any wholly-owned subsidiary of the Company to the Company or any other wholly-owned subsidiary of the Company;
(e) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation, reorganization or winding up of the Company or any of its subsidiaries or reorganize, amalgamate or merge the Company or any of its subsidiaries with any other person;
(f) acquire (by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, in one transaction or in a series of related transactions, assets, securities, properties, interests or businesses having a cost, on a per transaction or series of related transactions basis, in excess of $150,000 and subject to a maximum of $500,000 in the last 12 monthsaggregate for all such transactions, other than in the ordinary course of business consistent with past practice;
(g) amend, vary or grant any waiver (including the acceleration of vesting) under the Stock Option Plan, the Debenture Indenture or any Option or Note;
(h) sell, lease or otherwise transfer, in one transaction or in a series of related transactions, any assets, securities, properties, interests or businesses, having a cost or providing proceeds, as required applicable, on a per transaction or series of related transactions basis, in excess of $150,000 and subject to exercise its rights and discharge its obligations under this Agreementa maximum of $500,000 in the aggregate for all such transactions, other than, for greater certainty, (i) the sale, lease or other use or transfer of inventories in the ordinary course of business consistent with past practice; or (ii) in respect of obsolete, damaged or destroyed assets;
(i) make, in one transaction or in a series of related transactions, any loans, advances or capital contributions to, or as contemplated investments in, in an amount on a per transaction or series of related transactions basis in excess of $50,000 individually and $150,000 in the Exeter Budgetaggregate, to or in any person, other than the Company or any wholly-owned subsidiary of the Company;
(j) prepay any long-term indebtedness before its scheduled maturity or incur create, incur, assume or otherwise become liable, in one transaction or in a series of related transactions, with respect to any indebtedness for borrowed money or issue any debt securitiesguarantees thereof in an amount, on a per transaction or assumeseries of related transactions basis, guaranteein excess of $100,000 individually and $250,000 in the aggregate, endorse other than (i) indebtedness for borrowed money owing by one wholly-owned subsidiary of the Company to the Company or otherwise as an accommodation become responsible another wholly-owned subsidiary of the Company or of the Company to a wholly-owned subsidiary of the Company; (ii) in connection with the refinancing of indebtedness for borrowed money outstanding on the obligations date hereof; or (iii) in respect of any other persontrade payables, which trade payables in no event will exceed $100,000 individually or make any loans or advances$250,000 in the aggregate;
(ivk) payfail to pay all accounts payable, discharge or satisfy and collect all accounts receivable in the ordinary course of business consistent with past practice;
(l) engage in any claim, liability or obligation prior to the same being duetransaction with any related parties, other than transactions with subsidiaries and under employment agreements in the payment, discharge or satisfaction, ordinary course of business consistent with past practice;
(m) other than in the ordinary course of business, grant, modify sell, lease, license, sublicense, covenant not to assert, abandon, allow to lapse, assign, transfer, or otherwise dispose of liabilities reflected or reserved against terminate any IP Rights or enter into any agreement relating to IP Rights or do or omit to do anything to jeopardize the validity or enforceability of such IP Rights, including: (i) the non-payment of any application, search, maintenance or other official fees; or (ii) disclosing any trade secrets to any other person (except pursuant to sufficiently protective non-disclosure agreements);
(n) except as may be required by applicable Law or the terms of any existing Company Plan or any existing agreement in writing as of the date hereof: (i) increase any severance, change of control, bonus or termination pay to (or amend any existing arrangement with) any Company Employee or any director or officer of the Company or any of its subsidiaries; (ii) increase the benefits payable under any existing severance or termination pay policies or employment agreements with any current or former director or officer of the Company or, other than in the Financial Statementsordinary course of business consistent with past practice, any Company Employee (other than a director or officer); (iii) enter into any employment, deferred compensation or other similar agreement (or amend any such existing agreement) with any director or officer of the Company or, other than in the ordinary course of business consistent with past practice, any Company Employee (other than a director or officer); (iv) increase compensation, bonus levels or other benefits payable to any director or officer of the Company or any of its subsidiaries or, other than in the ordinary course of business consistent with past practice, any Company Employee (other than a director or officer); (v) loan or advance money or other property by the Company or its subsidiaries to any of their present or former directors, officers or Company Employees; (vi) establish, adopt, enter into, amend or terminate any Company Plan (or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Plan if it were in existence as of the date hereof) or collective bargaining agreement; (vii) grant any equity or equity-based awards; or (viii) increase, or voluntarily agree to increase, any funding obligation or accelerate, or agree to accelerate, the timing of any funding contribution under any Company Plan;
(o) make any material change in the Company’s methods of accounting, except as required by IFRS or pursuant to written instructions, comments or orders from any applicable Securities Authority, which instructions, comments, or orders shall have been disclosed to the Parent;
(p) waive, release, assign, settle or compromise any Proceeding;
(v) make Proceeding in a manner that could require a payment by, or release another person of an obligation to, the Company or any investment of its subsidiaries of $100,000 individually, or $250,000 in the aggregate, or that could reasonably be expected to have a Material Adverse Effect or to Chile or any person or property located, domiciled or otherwise incorporated, as applicable, in Chile, including but not limited to, in the form of cash, cash equivalents, loan, purchase of securities, contribution of capital, property transfer or purchase of any property or assets (except in the ordinary course of business consistent with past practice in the last 12 months or as contemplated in the Exeter Budget);
(vi) engage adversely affect in any new business, enterprise or other activity that is inconsistent with material respect the existing businesses ability of the Company in to complete the manner such existing businesses generally have been carried on or (as disclosed in the Public Disclosure Record) planned or proposed to be carried on prior to the date of transactions contemplated by this Agreement;
(viiq) (i) fail to duly and timely file, in accordance with applicable Laws, all Tax Returns required to be filed by it on or after the date hereof; (ii) fail to timely withhold, collect, remit and pay all material Taxes which are to be withheld, collected, remitted or paid by it to the extent due and payable except for any Taxes contested in good faith pursuant to applicable Laws; (iii) make or rescind any material election relating to Taxes (except as otherwise contemplated in this Agreement); (iv) make a request for a tax ruling or enter into a closing agreement with any taxing authority; (v) settle or compromise any material claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to Taxes; and (vi) change in any material respect any of its methods of reporting income, deductions or accounting for income tax purposes from those employed in the preparation of its income Tax Return for the tax year ending December 31, 2020, except as may be required by applicable Laws;
(r) except as provided for set forth in the Exeter Budget in respect of any Exeter Property or as are required by applicable Laws to maintain any Permits in good standingCompany Disclosure Letter, expend or commit to expend any amounts with respect to expenses for such Exeter Property; or
(viii) authorize any of the foregoing, or enter into any contract which would be a Material Contract if in existence on the date hereof (other than the renewal of a contract in existence on the date hereof on terms materially consistent with terms in existence on the date hereof) or modify any Contract to do any of the foregoing;
(f) the Company will not, and will not cause or permit its subsidiaries to, directly or indirectly, except in the ordinary course of business:
(i) terminate, fail to renew, cancel, waive, release, assign, grant or transfer any rights of material value;
(ii) except in connection with matters otherwise permitted under this Section 4.1, enter into any Contract which would be a Material Contract if in existence on the date hereof, or terminate, cancel, extend, renew value or amend, modify or change in any material respect any existing Material Contract;
(iiis) enter into any lease or sublease of real property (whether as a lessor, sublessor, lessee or sublessee), or modify, amend or exercise any right to renew any lease or sublease of real property or acquire any interest in real property; or
(iv) enter into any Contract containing any provision restricting or triggered by the Contemplated Transactions;
(g) Neither the Company nor its subsidiaries will, except in the ordinary course of business or pursuant to any existing Contracts or employment, pension, supplemental pension, termination or compensation arrangements or policies or plans in effect on the date hereof, and except as is necessary to comply with applicable Laws:
(i) grant to any officer, director, employee or consultant of the Company or its subsidiaries an increase in compensation in any form;
(ii) grant any general salary increase, fee or pay any bonus or other material compensation to the directors, officers, employees or consultants of the Company and its subsidiaries;
(iii) except as set out in Section 4.1(g)(iii) of the Exeter Disclosure Letter, take any action with respect to the grant or increase of any severance, change of control, retirement, retention or termination pay;
(iv) enter into or modify any employment or consulting agreement with any officer or director of the Company or its subsidiaries;
(v) terminate the employment or consulting arrangement of any senior management employees (including the Exeter Senior Management), except for cause;
(vi) increase any benefits payable under its current severance or termination pay policies;
(vii) other than as set out in Section 4.1(g)(vii) of the Exeter Disclosure Letter, adopt or amend or make any contribution to or any award under the Stock Option Plan, any restricted share unit plan, deferred share unit plan, performance share unit plan or other bonus, profit sharing, option, pension, retirement, deferred compensation, insurance, incentive compensation, compensation or other similar plan, agreement, trust, fund or arrangement for the benefit of directors or senior officers or former directors or senior officers of the Company or its subsidiaries; or
(viii) take any action to accelerate the time of payment of any compensation or benefits, amend or waive any performance or vesting criteria or accelerate vesting under the Stock Option Plan, except in accordance with its terms as contemplated herein or therein;
(h) neither the Company nor its subsidiaries will make any loan to any officer, director, employee or consultant of the Company or its subsidiaries;
(i) the Company will use its commercially reasonable efforts to cause the current insurance (or re-insurance) policies maintained by the Company, including directors’ and officers’ insurance, not to be cancelled or terminated and to prevent any of the coverage thereunder from lapsing, unless at the time of such termination, cancellation or lapse, replacement policies underwritten by insurance or re-insurance companies of nationally recognized standing having comparable deductions and providing coverage comparable to or greater than the coverage under the cancelled, terminated or lapsed policies for substantially similar premiums are in full force and effect, provided, however, that, except as contemplated by Section 4.8(b), the Company will not obtain or renew any insurance (or re-insurance) policy for a term exceeding 12 months;
(j) the Company will use commercially reasonable efforts to retain the services of its and its subsidiaries’ existing employees and consultants (including the Exeter Senior Management) and will promptly provide written notice to the Purchaser of the resignation or termination of any of its key employees or consultants;
(k) neither the Company nor its subsidiaries will make an application to amend, terminate, allow to expire or lapse or otherwise modify any of its Permits or take any action or fail to take any action which action or failure to act would result in the material loss, expiration or surrender of, or the loss of any material benefit under, or reasonably be expected to cause any Governmental Authority Entities to institute proceedings Proceedings for the suspension, revocation or limitation of rights under, any material Permit necessary authorizations or permits, or fail to conduct its businesses as now being conductedprosecute with commercially reasonable due diligence any pending applications to any Governmental Entities;
(lt) enter into or agree to the terms of any joint venture, strategic alliance, partnership, or similar agreement, arrangement or relationship, other than those currently in place as of the date hereof;
(u) enter into or adopt any shareholder rights plan or similar agreement or arrangement;
(v) make an application to terminate, allow to expire or lapse any of its Permits;
(w) amend, modify or terminate in any material respect any material insurance policy of the Company and each its subsidiaries, taken as a whole, in effect on the date of its subsidiaries will (i) duly and timely file all Returns required to be filed by it this Agreement, except for scheduled renewals of any insurance policy of the Company or any subsidiary in effect on or after the date hereof and all such Returns will in the ordinary course of business consistent with past practice;
(x) except as disclosed in the Company’s budget as disclosed to the Purchaser prior to the date hereof, make or commit to make capital expenditures in excess of $150,000 in the aggregate;
(y) knowingly take any action or enter into any transaction, other than a transaction contemplated by this Agreement (including, for greater certainty, the Pre-Acquisition Reorganization) or a transaction undertaken in the ordinary course of business consistent with past practice, that could reasonably be true, complete and correct in all material respects expected to have the effect of materially reducing or eliminating the amount of the tax cost “bump” pursuant to paragraphs 88(1)(c) and (iid) timely withhold, collect, remit and pay all Taxes which are to be withheld, collected, remitted or paid by it of the Tax Act otherwise available to the extent due Purchaser and payable except for any Taxes contested its successors and assigns in good faith pursuant respect of the non-depreciable capital properties owned by the Company and its subsidiaries as of the date of this Agreement or acquired by such entities subsequent to applicable Lawsthe date of this Agreement in accordance with the terms of this Agreement, without first consulting with the Parent and the Company will not (A) change use its tax accounting methods, principles or practices, except insofar as may have been required by a change in IFRS or applicable Law, (B) settle, compromise or agree commercially reasonable efforts to address the entry of judgment with respect to any action, claim or other Proceeding relating to Taxes, (other than the payment, discharge or satisfaction of liabilities reflected or reserved against in the Financial Statements) (C) enter into any tax sharing, tax allocation or tax indemnification agreement, (D) make a request for a tax ruling to any Governmental Authority, or (E) agree to any extension or waiver reasonable concerns of the limitation period relating Parent in regards to any material Tax claim such provisions prior to taking or assessment allowing a subsidiary to take such action or reassessmenttransaction;
(mz) the Company will not, and will not cause take any action or permit its subsidiaries to, settle or compromise fail to take any action, claim or other Proceeding (i) brought against it for damages or providing for the grant of injunctive relief or other non-monetary remedy (“Litigation”) or (ii) brought by any present, former or purported holder of its securities in connection with the Contemplated Transactions;
(n) the Company will not, and will not cause or permit its subsidiaries to, commence any Litigation (other than litigation in connection with the collection of accounts receivable, to enforce the terms of this Agreement or the Confidentiality Agreement, to enforce other obligations of the Purchaser or as a result of litigation commenced against the Company);
(o) the Company will not, and will not cause or permit its subsidiaries to, enter into or renew any Contract (i) containing (A) any limitation or restriction on the ability of the Company or its subsidiaries or, following the Effective Time, the ability of the Purchaser or any of its affiliates, to engage in any type of activity or business, (B) any limitation or restriction on the manner in whichaction that prevents, or the localities in whichmaterially delays, all impedes or any portion of the business of the Company or its subsidiaries or, following the Effective Time, all or any portion of the business of the Purchaser or any of its affiliates, is or would be conducted or (C) any limit or restriction on the ability of the Company or its subsidiaries or, following the Effective Time, the ability of the Purchaser or any of its affiliates, to solicit customers or employeesinterferes with, or (ii) that would reasonably be expected to prevent or significantly materially delay, impede or materially delay interfere with, the completion ability of the Contemplated TransactionsParties to consummate the transactions contemplated by this Agreement or the Arrangement;
(paa) the Company will not, and will not cause enter into any transaction or permit perform any of its subsidiaries to, take any action which act that would render, or which would reasonably may be expected to render, render any representation or warranty representations and warranties made by the Company set forth in this Agreement untrue or inaccurate in any material respect (disregarding for this purpose all materiality or Material Adverse Effect qualifications contained therein) at any time prior to the Effective Time if then maderespect; andor
(qbb) as is applicable, the Company will not, and will not cause or permit its subsidiaries toannounce an intention, agree, announce, resolve, authorize resolve or commit to do any of the foregoing.
Appears in 1 contract
Samples: Arrangement Agreement (Genius Brands International, Inc.)
Covenants of the Company Regarding the Conduct of Business. The Company covenants and agrees that, during the period from the date of this Agreement until the earlier of the Effective Time and the time that termination of this Agreement is terminated in accordance with its terms, unless except (i) as required by Law or any Governmental Entity; (ii) in order to comply with any COVID-19 Measure; (iii) with the Purchaser otherwise consents in writing prior written consent of Hudbay (not to the extent that such consent is permitted by applicable Law), which consent will not be unreasonably withheld, conditioned or delayed, or expressly permitted or specifically contemplated by this Agreement, or ); (iv) as set out in Schedule 5.1 of the Exeter Company Disclosure Letter Letter; or (v) as is otherwise required expressly contemplated or permitted by applicable Lawthis Agreement or the Plan of Arrangement:
(a) the Company shall, and shall cause each of its Subsidiaries to, conduct its and their respective businesses of the Company in, not take any action except in, and its subsidiaries will be conducted only in maintain their respective facilities in, the ordinary course of business and in accordance with the Exeter Budget, the Company and its subsidiaries will comply with the terms of all Material Contracts and the Company and its subsidiaries will to use commercially reasonable efforts to maintain and preserve intact in all material respects its and their present business organizationsorganization, assets, propertiesproperties (including the Company Mineral Interests) and goodwill, rights, goodwill and business relationships and to keep available the services of its officersofficers and employees as a group and to maintain satisfactory relationships consistent with past practice with joint venture partners, suppliers, distributors, employees and consultants as a groupGovernmental Entities having business relationships with them;
(b) without limiting the generality of Section 5.1(a), the Company will cooperate and consult through meetings with the Purchaser, as the Purchaser may reasonably request, to allow the Purchaser to monitorshall not, and provide reasonable input with respect to the direction of, shall not permit any activities relating to the exploration and maintenance of Exeter Properties and discuss with the Purchaser prior to any required public disclosure of exploration results or other technical information provided nothing contained in this Section 4.1(b) shall prevent the Company from publicly disclosing any information required by Law or the rules or policies of the TSX or NYSE MKT after prior notice to the Purchaser and, other than as contemplated by the Exeter Budget, will not make any capital expenditures or other financial commitments in excess of $500,000 or $2,000,000 in the aggregate;
(c) the Company will notits Subsidiaries to, directly or indirectly:
(i) alter other than as required by the terms of any Company Equity Incentive Plan or written employment agreement, issue, sell, grant, award, pledge or dispose of or agree to issue, sell, grant, award, pledge or dispose of, any Company Shares, or other equity or voting interests or any options, stock appreciation rights, warrants, calls, conversion or exchange privileges or rights of any kind to acquire (whether on exchange, exercise, conversion or otherwise) any Company Shares or other equity or voting interests or other securities or any shares of its Subsidiaries (including, for greater certainty, Company Incentive Awards), other than pursuant to the exercise or settlement of any Company Incentive Awards that are outstanding as of the date hereof in accordance with their terms;
(ii) amend the notice of articles, articles, charter, by-laws articles or other constating documents of the Company and its Subsidiaries or the terms of any securities of the Company or any of its subsidiariesSubsidiaries;
(iiiii) declare, set aside or pay any dividend on or make other distribution to Company Shareholders (whether in cash, securities or property or any distribution or payment or return of capital combination thereof) in respect of any equity Company Shares or the securities of any of its Subsidiaries, other than (A) the declaration and payment of a dividend payable in cash so long as the dividend gives rise to an adjustment in Consideration in accordance with Section 2.13, and (B) for certainty, the payment of any interest on the Company (other than dividends, distributions, payments or return of capital made to the Company);
(iii) split, divide, consolidate, combine or reclassify the Exeter Shares or any other securities of the Company or its subsidiariesBonds in accordance with their terms;
(iv) issue[Redacted - Commercially Sensitive];
(v) split, grantcombine or reclassify any outstanding Company Shares or the securities of any of its Subsidiaries;
(vi) redeem, sell purchase or pledge or authorize or agree offer to issue, grant, sell or pledge purchase any Exeter Company Shares or other securities of the Company or its subsidiaries, or securities convertible into or exchangeable or exercisable for, or otherwise evidencing a right to acquire, Exeter Shares or other securities of the Company or its subsidiaries, other than the issuance of Exeter Shares issuable pursuant to the terms of Exeter Options outstanding on the date hereof;
(v) redeem, purchase or otherwise acquire or subject to any Lien, any of its outstanding Exeter Shares or other securities or securities convertible into or exchangeable or exercisable for Exeter Shares or any such other securities or any shares or other securities of its subsidiariesSubsidiaries, other than pursuant to the settlement of any Company Incentive Awards that are outstanding as of the date hereof in accordance with their terms;
(vivii) except in connection with a Pre-Acquisition Reorganization, reorganize, amalgamate or merge the Company or any of its Subsidiaries with any other than as set out in Section 4.1(c)(viPerson;
(viii) [Redacted - Commercially Sensitive];
(ix) reduce the stated capital of the Exeter Disclosure Letter, amend the terms of any securities shares of the Company or of any of its subsidiariesSubsidiaries;
(viix) except as disclosed in Schedule 5.1(b)(x) of the Company Disclosure Letter, sell, pledge, lease, dispose of, mortgage, licence, permit a Lien (other than a Company Permitted Lien) to be created on or agree to sell, pledge, dispose of, mortgage, licence, permit a Lien (other than a Company Permitted Lien) to be created on or otherwise transfer any assets of the Company or any of its Subsidiaries or any interest in any assets of the Company and its Subsidiaries having a value greater than $3,500,000 in the aggregate, other than sales of inventory, equipment or obsolete assets in the ordinary course;
(xi) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) or agree to acquire, directly or indirectly, in one transaction or in a series of related transactions, any Person, or make any investment or agree to make any investment (by purchase of shares or securities, contributions of capital (other than to wholly-owned Subsidiaries), property transfer, purchase of any property or assets or otherwise), directly or indirectly, in one transaction or in a series of related transactions, in any Person, other than acquisitions of assets, equipment and supplies in the ordinary course that do not exceed 115% of the amounts budgeted for such acquisitions in the Company Budget and, for certainty, excluding capital expenditures permitted by Section 5.1(b)(xxiv);
(xii) except in the ordinary course or as required by the terms of the Company Bonds, incur, create, assume or otherwise become liable for any indebtedness for borrowed money or any other material liability or obligation or issue any debt securities, or guarantee or otherwise become responsible for, the obligations of any other Person or make any loans or advances to any Person that is not a wholly-owned Subsidiary of the Company;
(xiii) adopt a plan of liquidation or resolution resolutions providing for the winding-up, liquidation or dissolution of the Company or any of its subsidiariesSubsidiaries;
(viii) reorganize, amalgamate or merge with any other person and will not cause or permit its subsidiaries to reorganize, amalgamate or merge with any other person;
(ix) create any subsidiary or enter into any Contracts or other arrangements regarding the control or management of the operations, or the appointment of governing bodies or enter into any Joint Ventures;
(x) make any material changes to any of its accounting policies, principles, methods, practices or procedures (including by adopting any material new accounting policies, principles, methods, practices or procedures), except as disclosed in the Public Disclosure Record, as required by applicable Laws or under IFRS; or
(xi) enter into, modify or terminate any Contract with respect to any of the foregoing;
(d) the Company will immediately notify the Purchaser orally and then promptly notify the Purchaser in writing of (i) any “material change” (as defined in the Securities Act) in relation to the Company or its subsidiaries, (ii) any event, circumstance or development that has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, (iii) any breach of this Agreement by the Company, or (iv) any event occurring after the date of this Agreement that would render a representation or warranty, if made on that date or the Effective Time, inaccurate;
(e) except as contemplated in the Exeter Budget, the Company will not, and will not cause or permit its subsidiaries to, directly or indirectly, except in connection with this Agreement:
(i) sell, pledge, lease, licence, dispose of or encumber any assets or properties of the Company or its subsidiaries related to the Material Property;
(ii) acquire (by merger, amalgamation, consolidation, arrangement or acquisition of shares or other equity securities or interests or assets or otherwise) any corporation, partnership, association or other business organization or division thereof or any property or asset, or make any investment by the purchase of securities, contribution of capital, property transfer, or purchase of any property or assets of any other person;
(iii) incur any expenses (except in the ordinary course of business consistent with past practice in the last 12 months, as required to exercise its rights and discharge its obligations under this Agreement, or as contemplated in the Exeter Budget) or incur any indebtedness for borrowed money or issue any debt securities, or assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other person, or make any loans or advances;
(iv) pay, discharge or satisfy any claim, liability or obligation prior to the same being due, other than the payment, discharge or satisfaction, in the ordinary course of business, of liabilities reflected or reserved against in the Financial Statements, or voluntarily waive, release, assign, settle or compromise any Proceeding;
(v) make any investment in or to Chile or any person or property located, domiciled or otherwise incorporated, as applicable, in Chile, including but not limited to, in the form of cash, cash equivalents, loan, purchase of securities, contribution of capital, property transfer or purchase of any property or assets (except in the ordinary course of business consistent with past practice in the last 12 months or as contemplated in the Exeter Budget);
(vi) engage in any new business, enterprise or other activity that is inconsistent with the existing businesses of the Company in the manner such existing businesses generally have been carried on or (as disclosed in the Public Disclosure Record) planned or proposed to be carried on prior to the date of this Agreement;
(vii) except as provided for in the Exeter Budget in respect of any Exeter Property or as are required by applicable Laws to maintain any Permits in good standing, expend or commit to expend any amounts with respect to expenses for such Exeter Property; or
(viii) authorize any of the foregoing, or enter into or modify any Contract to do any of the foregoing;
(f) the Company will not, and will not cause or permit its subsidiaries to, directly or indirectly, except in the ordinary course of business:
(i) terminate, fail to renew, cancel, waive, release, grant or transfer any rights of material value;
(ii) except in connection with matters otherwise permitted under this Section 4.1, enter into any Contract which would be a Material Contract if in existence on the date hereof, or terminate, cancel, extend, renew or amend, modify or change any Material Contract;
(iii) enter into any lease or sublease of real property (whether as a lessor, sublessor, lessee or sublessee), or modify, amend or exercise any right to renew any lease or sublease of real property or acquire any interest in real property; or
(iv) enter into any Contract containing any provision restricting or triggered by the Contemplated Transactions;
(g) Neither the Company nor its subsidiaries will, except in the ordinary course of business or pursuant to any existing Contracts or employment, pension, supplemental pension, termination or compensation arrangements or policies or plans in effect on the date hereof, and except as is necessary to comply with applicable Laws:
(i) grant to any officer, director, employee or consultant of the Company or its subsidiaries an increase in compensation in any form;
(ii) grant any general salary increase, fee or pay any bonus or other material compensation to the directors, officers, employees or consultants of the Company and its subsidiaries;
(iiixiv) except as set out in Section 4.1(g)(iiiSchedule 5.1(b)(xiv) of the Exeter Company Disclosure Letter, take pay, discharge, settle, satisfy, compromise, waive, assign or release any action with respect material claims, liabilities or obligations prior to the grant or increase of any severance, change of control, retirement, retention or termination paysame becoming due;
(ivxv) enter into waive, release, grant, transfer, exercise, modify or modify amend in any employment material respect, other than in the ordinary course, (A) any existing material contractual rights in respect of any Company Mineral Interests, or consulting agreement with (B) any officer material Authorization, lease, concession, contract or director of the Company or its subsidiariesother document;
(vxvi) terminate the employment or consulting arrangement of any senior management employees (including the Exeter Senior Management), except for cause;
(vi) increase any benefits payable under its current severance or termination pay policies;
(vii) other than as set out in Section 4.1(g)(vii) of the Exeter Disclosure Letter, adopt or amend or make any contribution to or any award under the Stock Option Plan, any restricted share unit plan, deferred share unit plan, performance share unit plan or other bonus, profit sharing, option, pension, retirement, deferred compensation, insurance, incentive compensation, compensation or other similar plan, agreement, trust, fund or arrangement for the benefit of directors or senior officers or former directors or senior officers of the Company or its subsidiaries; or
(viii) take any action to accelerate the time of payment of any compensation or benefits, amend or waive any performance or vesting criteria or accelerate vesting under the Stock Option Plan, except in accordance with its terms as contemplated herein or therein;
(h) neither the Company nor its subsidiaries will make any loan to any officer, director, employee or consultant of the Company or its subsidiaries;
(i) the Company will use its commercially reasonable efforts to cause the current insurance (or re-insurance) policies maintained by the Company, including directors’ and officers’ insurance, not to be cancelled or terminated and to prevent any of the coverage thereunder from lapsing, unless at the time of such termination, cancellation or lapse, replacement policies underwritten by insurance or re-insurance companies of nationally recognized standing having comparable deductions and providing coverage comparable to or greater than the coverage under the cancelled, terminated or lapsed policies for substantially similar premiums are in full force and effect, provided, however, that, except as contemplated by Section 4.8(b), the Company will not obtain or renew any insurance (or re-insurance) policy for a term exceeding 12 months;
(j) the Company will use commercially reasonable efforts to retain the services of its and its subsidiaries’ existing employees and consultants (including the Exeter Senior Management) and will promptly provide written notice to the Purchaser of the resignation or termination of any of its key employees or consultants;
(k) neither the Company nor its subsidiaries will make an application to amend, terminate, allow to expire or lapse or otherwise modify any of its Permits or take any action or fail to take any action which action or failure to act would result in the material loss, expiration or surrender of, or the loss of any material benefit under, or reasonably be expected to cause any Governmental Authority Entities to institute proceedings for the suspension, revocation or limitation of rights under, any material Permit Authorizations necessary to conduct its businesses as now being conducted or planned to be conducted;
(lxvii) other than as disclosed in Schedule 5.1(b)(xvii), in the ordinary course, in accordance with this Agreement or the Plan of Arrangement, or as is necessary to comply with applicable Laws or the current terms of any Contracts or Company Benefit Plans: (A) grant to any Company Employee an increase in compensation in any form, or grant any general salary increase; (B) make any loan to any Company Employee (other than expense reimbursements in the ordinary course); (C) take any action with respect to the grant of any severance, retention, change of control or bonus to, or enter into any employment agreement, deferred compensation or other similar agreement (or amend any such existing agreement) with any Company Employee; (D) increase any benefits payable under any existing severance or termination pay policies or employment agreements, or adopt or materially amend or make any contribution to any Company Benefit Plan or other bonus, profit sharing, option, pension, retirement, deferred compensation, insurance, incentive compensation, compensation or other similar plan, agreement, trust, fund or arrangement for the benefit of directors or Company Employees or former directors or former Company Employees; (E) increase bonus levels or other benefits payable to any director or executive officer; (F) provide for accelerated vesting, removal of restrictions or an exercise of any stock-based or stock-related awards (including stock options); (G) establish, adopt or amend (except as required by applicable Law) any collective bargaining agreement or similar agreement; or (H) hire or engage, or amend the terms of employment or engagement of, any Company Employee or independent contractor with total annual remuneration exceeding $200,000;
(xviii) enter into or terminate any interest rate, currency, equity or commodity swaps, xxxxxx, derivatives, forward sales contracts or other financial instruments or like transaction, other than in the ordinary course;
(xix) materially change the business carried on by the Company and each of its subsidiaries will Subsidiaries, as a whole;
(ixx) duly and timely file all Returns required to be filed by it on amend its accounting policies or after the date hereof and all such Returns will be true, complete and correct in all material respects and (ii) timely withhold, collect, remit and pay all Taxes which are to be withheld, collected, remitted or paid by it to the extent due and payable adopt new accounting policies except for any Taxes contested in good faith pursuant to applicable Laws, and the Company will not (A) change its tax accounting methods, principles or practices, except insofar as may have been required by a change concurrent changes in IFRS or applicable Law, IFRS;
(B) settle, compromise or agree to the entry of judgment with respect to any action, claim or other Proceeding relating to Taxes, (other than the payment, discharge or satisfaction of liabilities reflected or reserved against in the Financial Statements) (Cxxi) enter into any tax sharingContract or series of Contracts, tax allocation other than in the ordinary course, resulting in a new Contract or tax indemnification agreement, (D) make series of related new Contracts having a request for a tax ruling to any Governmental Authorityterm in excess of 12 months and that would not be terminable by the Company or its Subsidiaries upon notice of 90 days or less from the date of the relevant Contract, or (E) agree to that would impose financial obligations on the Company or any extension or waiver of its Subsidiaries in excess of $3,500,000 in the aggregate over the term of the limitation period relating to any material Tax claim or assessment or reassessmentContract;
(mxxii) (A) except in the Company will notordinary course, and will not cause alter, amend, or permit its subsidiaries tootherwise modify or supplement, settle or compromise waive any actionmaterial provision or condition of, claim or other Proceeding (i) brought against it for damages or providing for the grant of injunctive relief or other non-monetary remedy (“Litigation”) any Material Contract or (iiB) brought by enter into any present, former or purported holder of its securities in connection with the Contemplated TransactionsCompany Standstill Agreement;
(nxxiii) the Company will not, and will not cause or permit its subsidiaries to, commence any Litigation (other than litigation in connection with the collection of accounts receivable, to enforce the terms of this Agreement or the Confidentiality Agreement, to enforce other obligations of the Purchaser or as a result of litigation commenced against the Company);
(o) the Company will not, and will not cause or permit its subsidiaries to, enter into or renew any Contract (i) agreement, contract, lease, licence or other binding obligation of the Company or its Subsidiaries containing (A1) any limitation or restriction on the ability of the Company or its subsidiaries Subsidiaries or, following completion of the Effective Timetransactions contemplated hereby, the ability of the Purchaser Hudbay or any of its affiliatesSubsidiaries, to engage in any type of activity or business, (B2) any limitation or restriction on the manner in which, or the localities in which, all or any portion of the business of the Company or its subsidiaries Subsidiaries or, following consummation of the Effective Timetransactions contemplated hereby, all or any portion of the business of the Purchaser Hudbay or any of its affiliatesSubsidiaries, is or would be conducted conducted, or (C3) any limit or restriction on the ability of the Company or its subsidiaries Subsidiaries or, following completion of the Effective Timetransactions contemplated hereby, the ability of the Purchaser Hudbay or any of its affiliatesSubsidiaries, to solicit customers or employees; or
(xxiv) except as disclosed in Schedule 5.1(b)(xxiv) of the Company Disclosure Letter, not incur any capital expenditures or enter into any agreement obligating the Company or its Subsidiaries to provide for future capital expenditures involving payments in excess of 115% of the amounts budgeted for such capital expenditures in the Company Budget in the aggregate;
(c) except as contemplated by Section 5.15, the Company shall use its commercially reasonable efforts to cause its and its Subsidiaries' current insurance (or re-insurance) policies not to be cancelled or terminated or any of the coverage thereunder to lapse, unless simultaneously with such termination, cancellation or lapse, replacement policies underwritten by insurance and re-insurance companies of nationally recognized standing providing coverage equal to or greater than the coverage under the cancelled, terminated or lapsed policies for substantially similar premiums are in full force and effect;
(d) the Company and each of its Subsidiaries shall:
(i) duly and timely file all Tax Returns required to be filed by it on or after the date hereof and all such Tax Returns will be true, complete and correct in all respects;
(ii) that would reasonably timely withhold, collect, remit and pay all Taxes which are required to be expected withheld, collected, remitted or paid by it to prevent or significantly impede or materially delay the completion of the Contemplated Transactionsextent due and payable;
(piii) the Company will notnot make, and will change or rescind any material election, information, return or designation relating to Taxes, except as may be required by applicable Laws;
(iv) not cause amend or permit change any of its subsidiaries tomethods for reporting income deductions or accounting for Tax purposes, except as may be required by applicable Laws;
(v) not make a request for a Tax ruling, voluntarily disclose any potential or actual Tax issue to any taxing authority, or enter into or amend any agreement with any taxing authorities, or consent to any extension or waiver of any limitation period with respect to Taxes;
(vi) not settle or compromise any claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to Taxes affecting the Company or any of its Subsidiaries (other than the payment, discharge or satisfaction of liabilities reflected in or reserved against in the audited consolidated financial statements of the Company for the year ended December 31, 2022);
(vii) except in connection with this Agreement, not knowingly make or modify any agreement in respect of, or agree to take any action which would renderthat could affect the interpretation of, any Tax matters with any Governmental Entity;
(viii) not enter into any Tax sharing, Tax allocation or which reasonably Tax indemnification agreement;
(ix) not amend any Tax Return or change any of its methods of reporting income, deductions or accounting for income Tax purposes from those employed in the preparation of its income Tax Return for the tax year ended December 31, 2021, except as may be expected to render, any representation or warranty made required by the Company in this Agreement untrue or inaccurate in any material respect (disregarding for this purpose all materiality or Material Adverse Effect qualifications contained therein) at any time prior to the Effective Time if then madeapplicable Laws; and
(qx) as is applicablekeep Hudbay reasonably informed of any material events, discussions, correspondence or other action with respect to any Tax audit, investigation or assessment;
(e) if permitted by the terms and conditions of the Company will notBonds, and will issue conditional notices of defeasance and/or conditional redemption notices (in each case, conditioned on the Arrangement becoming effective) to the holders thereto as may be requested by Xxxxxx; and
(f) the Company shall not cause authorize, agree or permit its subsidiaries to, agree, announce, resolve, authorize or otherwise commit to do any of the foregoingmatters otherwise prohibited by this Section 5.1.
Appears in 1 contract
Covenants of the Company Regarding the Conduct of Business. (a) The Company covenants and agrees that, subject to Applicable Law, during the period from the date of this Agreement until the earlier of the Effective Time End Date and the time that this Agreement is terminated in accordance with its terms, unless except with the express prior written consent of the Parent and the Purchaser otherwise consents in writing (to the extent that such consent is or as required or permitted by applicable Law), which consent will not be unreasonably withheld, conditioned or delayed, or expressly permitted or specifically contemplated by this Agreement, or as set out the Company shall conduct its business in the Exeter Disclosure Letter or as is otherwise required by applicable Law:
(a) the businesses of the Company and its subsidiaries will be conducted only in the ordinary course of business Ordinary Course and in accordance with Applicable Law. Provided However the Exeter BudgetCompany will be permitted to enter into the Inventory Financing and Security Agreement and issue the Revolving Line of Credit Promissory Note.
(b) Without limiting the generality of Section 4.20(a), subject to Applicable Law, the Company covenants and its subsidiaries will comply agrees that, during the period from the date of this Agreement until the End Date, except with the terms express prior written consent of all Material Contracts and the Purchasers or as required or permitted by this Agreement, the Company and shall use its subsidiaries will use commercially reasonable best efforts to maintain and preserve intact its the current business organizationsorganization, assets, properties, rights, goodwill properties and business relationships and of the Company, keep available the services of its officers, the present employees and consultants as a group;
(b) agents of the Company will cooperate and consult through meetings maintain good relations with, and the goodwill of, employees, suppliers, customers, creditors and all other Persons having business relationships with the PurchaserCompany and, as the Purchaser may reasonably request, to allow the Purchaser to monitor, and provide reasonable input with respect to the direction of, any activities relating to the exploration and maintenance of Exeter Properties and discuss except with the Purchaser prior to any required public disclosure written consent of exploration results or other technical information provided nothing contained in this Section 4.1(b) shall prevent the Purchasers, the Company from publicly disclosing any information required by Law or the rules or policies of the TSX or NYSE MKT after prior notice to the Purchaser and, other than as contemplated by the Exeter Budget, will not make any capital expenditures or other financial commitments in excess of $500,000 or $2,000,000 in the aggregate;
(c) the Company will shall not, directly or indirectly:
(i) alter or amend the notice of articles, articles, charter, by-laws or other constating documents of the Company or make any change in its subsidiariesOrganizational Documents;
(ii) split, combine, consolidate or reclassify any shares of its capital stock, undertake any capital reorganization or declare, set aside or pay any dividend on or make other distribution (whether in cash, stock or property or any distribution or payment or return of capital in respect of any equity securities of the Company (other than dividends, distributions, payments or return of capital made to the Companycombination thereof);
(iii) splitreorganize, divide, consolidateamalgamate, combine or reclassify merge the Exeter Shares or Company with any other securities of Person (other than pursuant to the Company or its subsidiariestransactions contemplated by this Agreement);
(iv) issue, grant, sell or pledge or authorize or agree to issue, grant, sell or pledge any Exeter Shares or other securities of the Company or its subsidiaries, or securities convertible into or exchangeable or exercisable for, or otherwise evidencing a right to acquire, Exeter Shares or other securities of the Company or its subsidiaries, other than the issuance of Exeter Shares issuable pursuant to the terms of Exeter Options outstanding on the date hereof;
(v) redeem, purchase or otherwise acquire or subject to any Lien, any of its outstanding Exeter Shares or other securities or securities convertible into or exchangeable or exercisable for Exeter Shares or any such other securities or any shares or other securities of its subsidiaries;
(vi) other than as set out in Section 4.1(c)(vi) of the Exeter Disclosure Letter, amend the terms of any securities of the Company or its subsidiaries;
(vii) adopt a plan of liquidation or resolution resolutions providing for the liquidation or dissolution of the Company;
(v) sell, pledge, lease, dispose of, surrender, lose the right to use, mortgage, license, encumber (other than Permitted Liens) or otherwise dispose of or transfer any assets of the Company or its subsidiariesany interest in any assets of the Company, other than in the Ordinary Course;
(vi) make any capital expenditure or similar commitments, other than in the Ordinary Course;
(vii) enter into any interest rate, currency, equity or commodity swaps, hxxxxx, derivatives, forward sales contracts or similar financial instruments;
(viii) reorganize, amalgamate make any bonus or merge with profit sharing distribution or similar payment of any other person and will not cause or permit its subsidiaries to reorganize, amalgamate or merge with any other personkind;
(ix) create grant any subsidiary or enter into any Contracts general increase in the rate of wages, salaries, bonuses or other arrangements regarding remuneration of any Company employees, other than in the control or management of the operations, or the appointment of governing bodies or enter into any Joint VenturesOrdinary Course;
(x) make any material changes tax election, information schedule, return or designation, except as required by Applicable Law and in a manner consistent with past practice, settle or compromise any material tax claim, assessment, reassessment or liability, file any amended tax return, enter into any material agreement with a Governmental Authority with respect to taxes, surrender any right to claim a material tax abatement, reduction, deduction, exemption, credit or refund, consent to the extension or waiver of the limitation period applicable to any material tax matter or materially amend or change any of its methods or reporting income, deductions or accounting policies, principles, methods, practices or procedures (including by adopting any material new accounting policies, principles, methods, practices or procedures), for income tax purposes except as disclosed in the Public Disclosure Record, as may be required by applicable Laws or under IFRS; orApplicable Law;
(xi) create, enter intointo or increase any severance, modify change of control or terminate termination pay to (or amend any Contract similar existing arrangement with) any Company employee, director or executive officer of the Company or change the benefits payable under any existing severance or termination pay policies with respect any Company employee, director or executive officer of the Company;
(xii) except as required by Applicable Law: (A) adopt, enter into or amend any Stock Option Plan (other than entering into an employment agreement in the Ordinary Course with a new Company employee who was not employed by the Company on the date of this Agreement); (B) pay any benefit to any director or officer of the Company or to any Company employee other than in the Ordinary Course; (C) grant, accelerate, increase or otherwise amend any payment, award or other benefit payable to, or for the benefit of, any director or officer of the Company or to any Company employee; (D) take or propose any action to effect any of the foregoing; or (E) hire or terminate or promote any employee;
(dxiii) the Company will immediately notify the Purchaser orally and then promptly notify the Purchaser in writing of (i) any “material change” (as defined in the Securities Act) in relation to the Company or its subsidiariescancel, (ii) any event, circumstance or development that has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, (iii) any breach of this Agreement by the Company, or (iv) any event occurring after the date of this Agreement that would render a representation or warranty, if made on that date or the Effective Time, inaccurate;
(e) except as contemplated in the Exeter Budget, the Company will not, and will not cause or permit its subsidiaries to, directly or indirectly, except in connection with this Agreement:
(i) sell, pledge, lease, licence, dispose of or encumber any assets or properties of the Company or its subsidiaries related to the Material Property;
(ii) acquire (by merger, amalgamation, consolidation, arrangement or acquisition of shares or other equity securities or interests or assets or otherwise) any corporation, partnership, association or other business organization or division thereof or any property or asset, or make any investment by the purchase of securities, contribution of capital, property transfer, or purchase of any property or assets of any other person;
(iii) incur any expenses (except in the ordinary course of business consistent with past practice in the last 12 months, as required to exercise its rights and discharge its obligations under this Agreement, or as contemplated in the Exeter Budget) or incur any indebtedness for borrowed money or issue any debt securities, or assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other person, or make any loans or advances;
(iv) pay, discharge or satisfy any claim, liability or obligation prior to the same being due, other than the payment, discharge or satisfaction, in the ordinary course of business, of liabilities reflected or reserved against in the Financial Statements, or voluntarily waive, release, assign, settle or compromise any Proceedingmaterial claims or rights;
(vxiv) make any investment in or to Chile or any person or property located, domiciled or otherwise incorporated, as applicable, in Chile, including but not limited to, in the form of cash, cash equivalents, loan, purchase of securities, contribution of capital, property transfer or purchase of any property or assets (except in the ordinary course of business consistent with past practice in the last 12 months or as contemplated in the Exeter Budget);
(vi) engage in any new business, enterprise or other activity that is inconsistent with the existing businesses of the Company in the manner such existing businesses generally have been carried on or (as disclosed in the Public Disclosure Record) planned or proposed to be carried on prior to the date of this Agreement;
(vii) except as provided for in the Exeter Budget in respect of any Exeter Property or as are required by applicable Laws to maintain any Permits in good standing, expend or commit to expend any amounts with respect to expenses for such Exeter Property; or
(viii) authorize any of the foregoing, or enter into or modify any Contract to do any of the foregoing;
(f) the Company will not, and will not cause or permit its subsidiaries to, directly or indirectly, except in the ordinary course of business:
(i) terminate, fail to renew, cancelcommence, waive, release, grant assign, settle or transfer compromise any rights of material valuelitigation, proceedings or governmental investigations;
(iixv) except in connection with matters otherwise permitted amend, modify, terminate or waive any right under this Section 4.1, any material contract or enter into any Contract which would be a Material Contract if in existence on the date hereof, material contract or terminate, cancel, extend, renew or amend, modify or change any Material Contractagreement;
(iiixvi) enter into any lease or sublease of real property (whether as a lessoramend, sublessor, lessee or sublessee), or modify, amend terminate, cancel or exercise let lapse any right to renew any lease or sublease of real property or acquire any interest in real property; or
(iv) enter into any Contract containing any provision restricting or triggered by the Contemplated Transactions;
(g) Neither the Company nor its subsidiaries will, except in the ordinary course of business or pursuant to any existing Contracts or employment, pension, supplemental pension, termination or compensation arrangements or policies or plans in effect on the date hereof, and except as is necessary to comply with applicable Laws:
(i) grant to any officer, director, employee or consultant of the Company or its subsidiaries an increase in compensation in any form;
(ii) grant any general salary increase, fee or pay any bonus or other material compensation to the directors, officers, employees or consultants of the Company and its subsidiaries;
(iii) except as set out in Section 4.1(g)(iii) of the Exeter Disclosure Letter, take any action with respect to the grant or increase of any severance, change of control, retirement, retention or termination pay;
(iv) enter into or modify any employment or consulting agreement with any officer or director of the Company or its subsidiaries;
(v) terminate the employment or consulting arrangement of any senior management employees (including the Exeter Senior Management), except for cause;
(vi) increase any benefits payable under its current severance or termination pay policies;
(vii) other than as set out in Section 4.1(g)(vii) of the Exeter Disclosure Letter, adopt or amend or make any contribution to or any award under the Stock Option Plan, any restricted share unit plan, deferred share unit plan, performance share unit plan or other bonus, profit sharing, option, pension, retirement, deferred compensation, insurance, incentive compensation, compensation or other similar plan, agreement, trust, fund or arrangement for the benefit of directors or senior officers or former directors or senior officers of the Company or its subsidiaries; or
(viii) take any action to accelerate the time of payment of any compensation or benefits, amend or waive any performance or vesting criteria or accelerate vesting under the Stock Option Plan, except in accordance with its terms as contemplated herein or therein;
(h) neither the Company nor its subsidiaries will make any loan to any officer, director, employee or consultant of the Company or its subsidiaries;
(i) the Company will use its commercially reasonable efforts to cause the current insurance (or re-insurance) policies maintained by the Company, including directors’ and officers’ insurance, not to be cancelled or terminated and to prevent any policy of the coverage thereunder from lapsingCompany in effect on the date of this Agreement, unless at the time of simultaneously with such termination, cancellation or lapse, replacement policies underwritten by insurance or and re-insurance companies of nationally recognized standing having comparable deductions and providing coverage comparable equal to or greater than the coverage under the cancelledterminated, terminated cancelled or lapsed policies for substantially similar premiums are in full force and effect, provided, however, that, except as contemplated by Section 4.8(b), the Company will not obtain or renew any insurance (or re-insurance) policy for a term exceeding 12 months;
(jxvii) the Company will use commercially reasonable efforts to retain the services of its and its subsidiaries’ existing employees and consultants (including the Exeter Senior Management) and will promptly provide written notice to the Purchaser of the resignation or termination of any of its key employees or consultants;
(k) neither the Company nor its subsidiaries will make an application to amend, terminate, allow to expire or lapse or otherwise modify any of its Permits or take any action or fail to take refrain from taking any commercially reasonable action, or permitting any action which action or failure to act would result in the material loss, expiration or surrender of, or the loss of any material benefit under, or reasonably be expected to cause any Governmental Authority to institute proceedings for the suspension, revocation or limitation of rights under, any material Permit necessary to conduct its businesses as now being conducted;
(l) the Company and each of its subsidiaries will (i) duly and timely file all Returns required to be filed by it on taken or after the date hereof and all such Returns will be truenot taken, complete and correct in all material respects and (ii) timely withhold, collect, remit and pay all Taxes which are to be withheld, collected, remitted or paid by it to the extent due and payable except for any Taxes contested in good faith pursuant to applicable Laws, and the Company will not (A) change its tax accounting methods, principles or practices, except insofar as may have been required by a change in IFRS or applicable Law, (B) settle, compromise or agree to the entry of judgment is inconsistent with respect to any action, claim or other Proceeding relating to Taxes, (other than the payment, discharge or satisfaction of liabilities reflected or reserved against in the Financial Statements) (C) enter into any tax sharing, tax allocation or tax indemnification agreement, (D) make a request for a tax ruling to any Governmental Authority, or (E) agree to any extension or waiver of the limitation period relating to any material Tax claim or assessment or reassessment;
(m) the Company will not, and will not cause or permit its subsidiaries to, settle or compromise any action, claim or other Proceeding (i) brought against it for damages or providing for the grant of injunctive relief or other non-monetary remedy (“Litigation”) or (ii) brought by any present, former or purported holder of its securities in connection with the Contemplated Transactions;
(n) the Company will not, and will not cause or permit its subsidiaries to, commence any Litigation (other than litigation in connection with the collection of accounts receivable, to enforce the terms of this Agreement or the Confidentiality Agreement, to enforce other obligations of the Purchaser or as a result of litigation commenced against the Company);
(o) the Company will not, and will not cause or permit its subsidiaries to, enter into or renew any Contract (i) containing (A) any limitation or restriction on the ability of the Company or its subsidiaries or, following the Effective Time, the ability of the Purchaser or any of its affiliates, to engage in any type of activity or business, (B) any limitation or restriction on the manner in which, or the localities in which, all or any portion of the business of the Company or its subsidiaries or, following the Effective Time, all or any portion of the business of the Purchaser or any of its affiliates, is or would be conducted or (C) any limit or restriction on the ability of the Company or its subsidiaries or, following the Effective Time, the ability of the Purchaser or any of its affiliates, to solicit customers or employees, or (ii) that which would reasonably be expected to prevent prevent, delay or significantly otherwise impede or materially delay the completion consummation of the Contemplated Transactions;transactions contemplated by this Agreement; or
(pxviii) the Company will not, and will not cause or permit any of its subsidiaries to, take any action which would render, or which reasonably may be expected to render, any representation or warranty made by the Company in this Agreement untrue or inaccurate in any material respect (disregarding for this purpose all materiality or Material Adverse Effect qualifications contained therein) at any time prior to the Effective Time if then made; and
(q) as is applicable, the Company will not, and will not cause or permit its subsidiaries toauthorize, agree, announceresolve or otherwise commit, resolvewhether or not in writing, authorize or commit to do any of the foregoing.
Appears in 1 contract
Covenants of the Company Regarding the Conduct of Business. (1) The Company covenants and agrees that, during the period from the date of this Agreement until the earlier of the Effective Time Date and the time that this Agreement is terminated in accordance with its terms, unless the Purchaser Parent shall otherwise consents consent in writing (to the extent that writing, such consent is permitted by applicable Law), which consent will not to be unreasonably withheld, conditioned withheld or delayed, or as is otherwise expressly permitted or specifically contemplated by this Agreement, Agreement or as the Arrangement or set out forth in the Exeter Disclosure Letter or as is otherwise required by applicable Law:
(a) the businesses of Letter, the Company and its subsidiaries will be conducted shall conduct business only in the ordinary course Ordinary Course and shall conduct the activities of business Dachang Project only in the Ordinary Course, with any activities outside of the Ordinary Course requiring the prior written consent of Parent, such consent not to be unreasonably withheld or delayed, provided that Parent acknowledges that the Company has not conducted any exploration activities at the Dachang Project since December 2011 and in accordance with the Exeter BudgetCompany will not do so prior to the Effective Time.
(2) Without limiting the generality of Section 4.1(1), the Company and its subsidiaries will comply with the terms of all Material Contracts and the Company and its subsidiaries will shall use commercially reasonable efforts to maintain and preserve intact its the current business organizationsorganization of the Company, assets, properties, rights, goodwill and business relationships and keep available the services of its officers, the present employees and consultants as a group;
(b) agents of the Company will cooperate and consult through meetings maintain satisfactory relations with, and the goodwill of, suppliers, customers, landlords, creditors, distributors, Governmental Entities and all other Persons having business relationships with the Purchaser, as the Purchaser may reasonably request, to allow the Purchaser to monitorCompany, and provide reasonable input with respect to the direction of, any activities relating to the exploration and maintenance of Exeter Properties and discuss with the Purchaser prior to any required public disclosure of exploration results or other technical information provided nothing contained in this Section 4.1(b) shall prevent the Company from publicly disclosing shall not, and shall not permit any information required by Law or the rules or policies of the TSX or NYSE MKT after prior notice to the Purchaser and, other than as contemplated by the Exeter Budget, will not make any capital expenditures or other financial commitments in excess of $500,000 or $2,000,000 in the aggregate;
(c) the Company will notits affiliates to, directly or indirectly:
(ia) alter amend its Constating Documents or, in the case of any affiliate which is not a corporation, its similar organizational documents;
(b) amend, modify or amend supplement the notice of articlesJoint Venture Agreement;
(c) split, articles, charter, by-laws combine or other constating documents reclassify any shares of the Company or its subsidiaries;
(ii) declare, set aside or pay any dividend on or make other distribution (whether in cash, stock or property or any distribution or payment or return of capital in respect of any equity securities of the Company (other than dividends, distributions, payments or return of capital made to the Companycombination thereof);
(iiid) splitredeem, dividerepurchase, consolidateor otherwise acquire or offer to redeem, combine repurchase or reclassify the Exeter Shares or otherwise acquire any other securities shares of capital stock of the Company or any of its subsidiariesaffiliates;
(iv) issue, grant, sell or pledge or authorize or agree to issue, grant, sell or pledge any Exeter Shares or other securities of the Company or its subsidiaries, or securities convertible into or exchangeable or exercisable for, or otherwise evidencing a right to acquire, Exeter Shares or other securities of the Company or its subsidiaries, other than the issuance of Exeter Shares issuable pursuant to the terms of Exeter Options outstanding on the date hereof;
(v) redeem, purchase or otherwise acquire or subject to any Lien, any of its outstanding Exeter Shares or other securities or securities convertible into or exchangeable or exercisable for Exeter Shares or any such other securities or any shares or other securities of its subsidiaries;
(vie) other than as set out forth in Section 4.1(c)(vi) of the Exeter Company Disclosure Letter, amend issue, deliver or sell, or authorize the terms issuance, delivery or sale of any securities shares of capital stock, any options, warrants or similar rights exercisable or exchangeable for or convertible into such capital stock of the Company or any of its subsidiariesaffiliates, except for the issuance of the Company Shares issuable upon the exercise of the currently outstanding the Company Options and the Company Warrants;
(vii) adopt a plan of liquidation or resolution providing for the liquidation or dissolution of the Company or its subsidiaries;
(viii) reorganize, amalgamate or merge with any other person and will not cause or permit its subsidiaries to reorganize, amalgamate or merge with any other person;
(ix) create any subsidiary or enter into any Contracts or other arrangements regarding the control or management of the operations, or the appointment of governing bodies or enter into any Joint Ventures;
(x) make any material changes to any of its accounting policies, principles, methods, practices or procedures (including by adopting any material new accounting policies, principles, methods, practices or procedures), except as disclosed in the Public Disclosure Record, as required by applicable Laws or under IFRS; or
(xi) enter into, modify or terminate any Contract with respect to any of the foregoing;
(d) the Company will immediately notify the Purchaser orally and then promptly notify the Purchaser in writing of (i) any “material change” (as defined in the Securities Act) in relation to the Company or its subsidiaries, (ii) any event, circumstance or development that has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, (iii) any breach of this Agreement by the Company, or (iv) any event occurring after the date of this Agreement that would render a representation or warranty, if made on that date or the Effective Time, inaccurate;
(e) except as contemplated in the Exeter Budget, the Company will not, and will not cause or permit its subsidiaries to, directly or indirectly, except in connection with this Agreement:
(i) sell, pledge, lease, licence, dispose of or encumber any assets or properties of the Company or its subsidiaries related to the Material Property;
(iif) acquire (by merger, amalgamation, consolidation, arrangement or acquisition of shares or other equity securities or interests stock or assets or otherwise) any corporation), partnershipdirectly or indirectly, association in one transaction or other business organization or division thereof or any property or assetin a series of related transactions, or make any investment by the purchase of assets, securities, contribution of capitalproperties, property transfer, interests or purchase of any property or assets of any other personbusinesses;
(g) sell, lease, transfer or otherwise dispose of any of the assets of the Company or its affiliates except for assets which are obsolete and which individually or in the aggregate do not exceed $200,000;
(h) make any payment for any liability or obligation or otherwise, other than, (i) in the Ordinary Course, (ii) in accordance with the “Company Budget” as set forth in the Company Disclosure Letter, (iii) incur expenses or payments related to the Arrangement, including all professional fees, (iv) payment of amounts in respect of any expenses (except employee termination payments related to termination of employees as set out in the ordinary course Company Disclosure Letter, and (v) any payments that may be required on or following the Effective Date under existing employment agreements between the Company and certain officers of business consistent with past practice the Company due to a change of control as set out in the last 12 monthsCompany Disclosure Letter, as required all such amounts in (v) of this paragraph or such amounts in respect of severance payable to exercise such other employees to be terminated at the Effective Time to be paid to the employee or deposited for the benefit of such employee prior to the Effective Date with a trustee or depositary to be selected by the Company. In the event that the Company has extraordinary obligations not otherwise permitted in this Section 4.1(2)(h), the Company must seek the approval of the Parent to allow it to pay such obligations, which approval will not be unnecessarily withheld or delayed.
(i) prepay any indebtedness before its rights and discharge its obligations under this Agreementscheduled maturity or increase, create, incur, assume or as contemplated in the Exeter Budget) or incur otherwise become liable for any indebtedness for borrowed money or issue any debt securities, or assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other person, or make any loans or advances;
(iv) pay, discharge or satisfy any claim, liability or obligation prior to the same being due, other than the payment, discharge or satisfaction, in the ordinary course of business, of liabilities reflected or reserved against in the Financial Statements, or voluntarily waive, release, assign, settle or compromise any Proceeding;
(v) make any investment in or to Chile or any person or property located, domiciled or otherwise incorporated, as applicable, in Chile, including but not limited to, in the form of cash, cash equivalents, loan, purchase of securities, contribution of capital, property transfer or purchase of any property or assets (except in the ordinary course of business consistent with past practice in the last 12 months or as contemplated in the Exeter Budget);
(vi) engage in any new business, enterprise or other activity that is inconsistent with the existing businesses of the Company in the manner such existing businesses generally have been carried on or (as disclosed in the Public Disclosure Record) planned or proposed to be carried on prior to the date of this Agreement;
(vii) except as provided for in the Exeter Budget in respect of any Exeter Property or as are required by applicable Laws to maintain any Permits in good standing, expend or commit to expend any amounts with respect to expenses for such Exeter Property; or
(viii) authorize any of the foregoing, or enter into or modify any Contract to do any of the foregoing;
(f) the Company will not, and will not cause or permit its subsidiaries to, directly or indirectly, except in the ordinary course of business:
(i) terminate, fail to renew, cancel, waive, release, grant or transfer any rights of material value;
(ii) except in connection with matters otherwise permitted under this Section 4.1, enter into any Contract which would be a Material Contract if in existence on the date hereof, or terminate, cancel, extend, renew or amend, modify or change any Material Contract;
(iii) enter into any lease or sublease of real property (whether as a lessor, sublessor, lessee or sublessee), or modify, amend or exercise any right to renew any lease or sublease of real property or acquire any interest in real property; or
(iv) enter into any Contract containing any provision restricting or triggered by the Contemplated Transactions;
(g) Neither the Company nor its subsidiaries will, except in the ordinary course of business or pursuant to any existing Contracts or employment, pension, supplemental pension, termination or compensation arrangements or policies or plans in effect on the date hereof, and except as is necessary to comply with applicable Laws:
(i) grant to any officer, director, employee or consultant of the Company or its subsidiaries an increase in compensation in any form;
(ii) grant any general salary increase, fee or pay any bonus or other material compensation to the directors, officers, employees or consultants of the Company and its subsidiaries;
(iii) except as set out in Section 4.1(g)(iii) of the Exeter Disclosure Letter, take any action with respect to the grant or increase of any severance, change of control, retirement, retention or termination pay;
(iv) enter into or modify any employment or consulting agreement with any officer or director of the Company or its subsidiaries;
(v) terminate the employment or consulting arrangement of any senior management employees (including the Exeter Senior Management), except for cause;
(vi) increase any benefits payable under its current severance or termination pay policies;
(vii) other than as set out in Section 4.1(g)(vii) of the Exeter Disclosure Letter, adopt or amend or make any contribution to or any award under the Stock Option Plan, any restricted share unit plan, deferred share unit plan, performance share unit plan or other bonus, profit sharing, option, pension, retirement, deferred compensation, insurance, incentive compensation, compensation or other similar plan, agreement, trust, fund or arrangement for the benefit of directors or senior officers or former directors or senior officers of the Company or its subsidiaries; or
(viii) take any action to accelerate the time of payment of any compensation or benefits, amend or waive any performance or vesting criteria or accelerate vesting under the Stock Option Plan, except in accordance with its terms as contemplated herein or therein;
(h) neither the Company nor its subsidiaries will make any loan to any officer, director, employee or consultant of the Company or its subsidiaries;
(i) the Company will use its commercially reasonable efforts to cause the current insurance (or re-insurance) policies maintained by the Company, including directors’ and officers’ insurance, not to be cancelled or terminated and to prevent any of the coverage thereunder from lapsing, unless at the time of such termination, cancellation or lapse, replacement policies underwritten by insurance or re-insurance companies of nationally recognized standing having comparable deductions and providing coverage comparable to or greater than the coverage under the cancelled, terminated or lapsed policies for substantially similar premiums are in full force and effect, provided, however, that, except as contemplated by Section 4.8(b), the Company will not obtain or renew any insurance (or re-insurance) policy for a term exceeding 12 monthsguarantees thereof;
(j) the Company will use commercially reasonable efforts to retain the services of its and its subsidiaries’ existing employees and consultants (including the Exeter Senior Management) and will promptly provide written notice make any loan or advance to, or any capital contribution or investment in, or assume, guarantee or otherwise become liable with respect to the Purchaser of liabilities or obligations of, any Person except for expense advances to the resignation or termination of any of its key Company’s employees or consultants;
(k) neither the Company nor its subsidiaries will make an application to amendenter into any interest rate, terminatecurrency, allow to expire equity or lapse commodity swaps, xxxxxx, derivatives, forward sales contracts or otherwise modify any of its Permits or take any action or fail to take any action which action or failure to act would result in the material loss, expiration or surrender of, or the loss of any material benefit under, or reasonably be expected to cause any Governmental Authority to institute proceedings for the suspension, revocation or limitation of rights under, any material Permit necessary to conduct its businesses as now being conductedsimilar financial instruments;
(l) the Company and each make any bonus or profit sharing distribution or similar payment of its subsidiaries will (i) duly and timely file all Returns required to be filed by it on or after the date hereof and all such Returns will be true, complete and correct in all material respects and (ii) timely withhold, collect, remit and pay all Taxes which are to be withheld, collected, remitted or paid by it to the extent due and payable except for any Taxes contested in good faith pursuant to applicable Laws, and the Company will not (A) change its tax accounting methods, principles or practices, except insofar as may have been required by a change in IFRS or applicable Law, (B) settle, compromise or agree to the entry of judgment with respect to any action, claim or other Proceeding relating to Taxes, (other than the payment, discharge or satisfaction of liabilities reflected or reserved against in the Financial Statements) (C) enter into any tax sharing, tax allocation or tax indemnification agreement, (D) make a request for a tax ruling to any Governmental Authority, or (E) agree to any extension or waiver of the limitation period relating to any material Tax claim or assessment or reassessmentkind;
(m) make any change in the Company will not, and will not cause Company’s methods of accounting except as required under Canadian GAAP or permit its subsidiaries to, settle IFRS or compromise any action, claim or other Proceeding (i) brought against it for damages or providing for the grant of injunctive relief or other non-monetary remedy (“Litigation”) or (ii) brought by any present, former or purported holder of its securities in connection with the Contemplated Transactionsapplicable Laws;
(n) grant any general increase in the Company will notrate of wages, and will not cause salaries, bonuses or permit its subsidiaries to, commence other remuneration to any Litigation (other than litigation in connection with the collection of accounts receivable, to enforce the terms of this Agreement or the Confidentiality Agreement, to enforce other obligations of the Purchaser or as a result employees of litigation commenced against the Company);
(o) the Company will not, and will not cause or permit its subsidiaries to, enter into or renew any Contract (i) containing increase any severance, change of control or termination pay to (Aor amend any existing arrangement with) any limitation or restriction on the ability employee of the Company Company, director or its subsidiaries or, following the Effective Time, the ability of the Purchaser executive officer or any of its affiliates, to engage in ; (ii) increase the benefits payable under any type of activity existing severance or business, (B) termination pay policies with any limitation or restriction on the manner in which, or the localities in which, all or any portion employee of the business Company, director or executive officer of the Company or its subsidiaries or, following the Effective Time, all or any portion of the business of the Purchaser or any of its affiliates; (iii) increase the benefits payable under any employment agreements with any employee of the Company, is director or would be conducted or (C) any limit or restriction on the ability executive officer of the Company or its subsidiaries or, following the Effective Time, the ability of the Purchaser or any of its affiliates; (iv) enter into any employment, to solicit customers deferred compensation or employees, other similar agreement (or (iiamend any such existing agreement) that would reasonably be expected to prevent with any director or significantly impede or materially delay the completion executive officer of the Contemplated Transactions;
(p) the Company will not, and will not cause or permit any of its subsidiaries to, take any action which would render, or which reasonably may be expected to render, any representation or warranty made by the Company in this Agreement untrue or inaccurate in any material respect (disregarding for this purpose all materiality or Material Adverse Effect qualifications contained therein) at any time prior to the Effective Time if then madeCompany; and
(q) as is applicable, the Company will not, and will not cause or permit its subsidiaries to, agree, announce, resolve, authorize or commit to do any of the foregoing.or
Appears in 1 contract
Samples: Arrangement Agreement
Covenants of the Company Regarding the Conduct of Business. The Company covenants and agrees thatthat during the period from the date of this Agreement until the earlier of the Effective Date and the time that this Agreement is terminated in accordance with its terms and except as (i) mandated by the Manager, Technical Committee or Operating Committee, (ii) expressly permitted or required by this Agreement or the Plan of Arrangement, (iii) required by applicable Law or a Governmental Entity, or (iv) to comply with COVID-19 Measures, or unless the Purchaser shall otherwise request or provide consent in writing, such consent not to be unreasonably withheld, conditioned or delayed:
(a) the Company shall and shall cause each of its Subsidiaries to:
(i) conduct its and their respective businesses only in, and not take any action except in, the ordinary course of business consistent with past practice; and
(ii) use commercially reasonable efforts to preserve intact its and their present business organization, goodwill, properties, business relationships and assets in all material respects and to keep available the services of its and their officers and employees as a group and to maintain good relations with suppliers, customers, landlords, licensors, lessors, creditors, distributors and all other Persons having business relationships with the Company and its Subsidiaries (other than the Parent and its affiliates).
(b) without limiting the generality of Section 5.1(a), the Company shall not, and shall cause each of its Subsidiaries not to, directly or indirectly, during the period from the date of this Agreement until the earlier of the Effective Time and the time that this Agreement is terminated in accordance with its terms, unless the Purchaser otherwise consents in writing (to the extent that such consent is permitted by applicable Law), which consent will not be unreasonably withheld, conditioned or delayed, or expressly permitted or specifically contemplated by this Agreement, or as set out in the Exeter Disclosure Letter or as is otherwise required by applicable Law:
(ai) amend or propose to amend its articles or other comparable constating documents;
(ii) issue, sell, grant, award, pledge, dispose of or otherwise encumber or agree to issue, sell, grant, award, pledge, dispose of or otherwise encumber any Company Shares or other equity or voting interests or any options, share appreciation rights, warrants, calls, conversion or exchange privileges or rights of any kind to acquire (whether on exchange, exercise, conversion or otherwise) any Company Shares or other equity or voting interests or other securities or, other than in respect of Permitted Liens, any shares of its Subsidiaries (including, for greater certainty, any equity based awards), other than pursuant to the businesses vesting or settlement of Company DSUs, Company PSUs or Company RSUs in accordance with their terms or the issuance of Company and its subsidiaries will be conducted only DSUs in the ordinary course of business and in accordance consistent with the Exeter Budget, the Company and its subsidiaries will comply with the terms of all Material Contracts and the Company and its subsidiaries will use commercially reasonable efforts to maintain and preserve intact its business organizations, assets, properties, rights, goodwill and business relationships and keep available the services of its officers, employees and consultants as a group;
(b) the Company will cooperate and consult through meetings with the Purchaser, as the Purchaser may reasonably request, to allow the Purchaser to monitor, and provide reasonable input with respect to the direction of, any activities relating to the exploration and maintenance of Exeter Properties and discuss with the Purchaser prior to any required public disclosure of exploration results or other technical information provided nothing contained in this Section 4.1(b) shall prevent the Company from publicly disclosing any information required by Law or the rules or policies of the TSX or NYSE MKT after prior notice to the Purchaser and, other than as contemplated by the Exeter Budget, will not make any capital expenditures or other financial commitments in excess of $500,000 or $2,000,000 in the aggregate;
(c) the Company will not, directly or indirectly:
(i) alter or amend the notice of articles, articles, charter, by-laws or other constating documents of the Company or its subsidiaries;
(ii) declare, set aside or pay any dividend on or make any distribution or payment or return of capital in respect of any equity securities of the Company (other than dividends, distributions, payments or return of capital made to the Company)past practice;
(iii) adjust, split, divide, consolidate, combine or reclassify the Exeter any outstanding Company Shares or any other the securities of the Company or any of its subsidiariesSubsidiaries;
(iv) issueredeem, grant, sell purchase or pledge otherwise acquire or authorize offer to purchase or agree to issue, grant, sell or pledge any Exeter otherwise acquire Company Shares or other securities of the Company or its subsidiaries, or securities convertible into or exchangeable or exercisable for, or otherwise evidencing a right to acquire, Exeter Shares or other any securities of the Company or its subsidiaries, other than the issuance of Exeter Shares issuable pursuant to the terms of Exeter Options outstanding on the date hereof;
(v) redeem, purchase or otherwise acquire or subject to any Lien, any of its outstanding Exeter Shares or other securities Subsidiaries or securities convertible into or exchangeable or exercisable for Exeter Shares or any such other securities or any shares capital stock or other securities of the Company or any of its subsidiariesSubsidiaries;
(viv) other than as set out in Section 4.1(c)(vi) of the Exeter Disclosure Letter, amend the terms of any securities of the Company or any of its subsidiariesSubsidiaries;
(vi) create any Subsidiary;
(vii) adopt or propose a plan of liquidation or resolution resolutions providing for the liquidation or dissolution of the Company or any of its subsidiariesSubsidiaries;
(viii) reorganize, amalgamate or merge the Company or its Subsidiaries with any other person and will not cause or permit its subsidiaries to reorganize, amalgamate or merge with any other personPerson;
(ix) create any subsidiary or enter into any Contracts or other arrangements regarding the control or management of the operations, or the appointment of governing bodies or enter into any Joint Ventures;
(x) make any material changes to any of its accounting policies, principles, methods, practices or procedures (including by adopting any material new accounting policies, principles, methods, practices or procedures), except as disclosed in the Public Disclosure Record, as required by applicable Laws or under IFRS; or
(xi) enter into, modify or terminate any Contract with respect to any of the foregoing;
(d) the Company will immediately notify the Purchaser orally and then promptly notify the Purchaser in writing of (i) any “material change” (as defined in the Securities Act) in relation to the Company or its subsidiaries, (ii) any event, circumstance or development that has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, (iii) any breach of this Agreement by the Company, or (iv) any event occurring after the date of this Agreement that would render a representation or warranty, if made on that date or the Effective Time, inaccurate;
(e) except as contemplated in the Exeter Budget, the Company will not, and will not cause or permit its subsidiaries to, directly or indirectly, except in connection with this Agreement:
(i) sell, pledge, lease, dispose of, mortgage, licence, encumber or otherwise transfer or agree to sell, pledge, lease, dispose of of, mortgage, licence, encumber or encumber otherwise transfer any tangible or intangible assets or properties of the Company or any of its subsidiaries related to Subsidiaries or any interest in any tangible assets of the Material PropertyCompany or any of its Subsidiaries having a value in excess of US$5,000,000 in the aggregate, including for these purposes any Company Mineral Rights or mineral product from Company Mineral Rights but excluding any transaction in the ordinary course consistent with past practice;
(iix) acquire (by merger, amalgamation, consolidation, arrangement or acquisition of shares or other equity securities or interests or assets or otherwise) or agree to acquire, directly or indirectly, in one transaction or in a series of related transactions, any corporationPerson, partnershipassets, association securities, properties, interests or other business organization businesses or division thereof or any property or assetthereof, or make any investment or agree to make any investment, directly or indirectly, in one transaction or in a series of related transactions, in any case having a value in excess of US$5,000,000 in the aggregate, either by the purchase of shares or securities, contribution contributions of capitalcapital (other than to wholly-owned Subsidiaries), property transfer, transfer or purchase of any property or assets of any other personPerson;
(iiixi) incur any expenses capital expenditures or enter into any agreement obligating the Company or its Subsidiaries (other than OT LLC) to provide for future capital expenditures which individually or in the aggregate exceeds US$5,000,000;
(xii) enter into any Contract with a value of US$1,000,000 or greater or with a term greater than one year;
(xiii) make any changes in financial accounting methods, principles, policies or practices, except as required, in each case, by IFRS;
(xiv) reduce the stated capital of the Company Shares or the shares of any of its Subsidiaries;
(xv) other than as contemplated in the Amended HoA, incur, create, assume or otherwise become liable for any indebtedness for borrowed money or any other material liability or obligation or issue any debt securities, or guarantee, endorse or otherwise become responsible for, the obligations of any other Person or make any loans or advances;
(xvi) pay, discharge, settle, satisfy, compromise, waive, assign or release any claims, rights, liabilities or obligations including any litigation, proceeding or investigation other than:
(A) the payment, discharge, settlement or satisfaction of liabilities in an amount less than US$1,000,000 in the aggregate; or
(B) payment of any reasonable fees related to the Arrangement;
(xvii) enter into any agreement that, if entered into prior to the date hereof, would have been a Company Material Contract, or modify, amend in any material respect, transfer or terminate any Company Material Contract, or waive, release, or assign any material rights or claims thereto or thereunder;
(xviii) commence any litigation or proceeding other than in connection with the collection of accounts or the enforcement of any rights under this Agreement;
(xix) enter into or terminate any material interest rate, currency, equity or commodity swaps, xxxxxx, derivatives, options, forward sales contracts or other financial instruments or like transaction;
(xx) except as required by the terms of the Company Benefit Plans or any written employment Contracts in effect on the date of this Agreement and disclosed in Section 3.1(q)(ii) of the Company Disclosure Letter, (A) enter into, grant, accelerate, or increase any severance, change of control or termination pay to (or amend any existing arrangement relating to the foregoing with) any director, officer, employee or individual consultant of the Company or any of its Subsidiaries; (B) grant, accelerate, or increase any payment, award (equity or otherwise) or other benefits payable to, or for the benefit of, or make any bonus payment to, any director, officer, employee or individual consultant of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice in the last 12 months, as required (provided that payments of bonuses which are to exercise its rights and discharge its obligations under this Agreement, or as contemplated in the Exeter Budget) or incur any indebtedness for borrowed money or issue any debt securities, or assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other person, or make any loans or advances;
(iv) pay, discharge or satisfy any claim, liability or obligation prior be used to the same being due, other than the payment, discharge or satisfaction, in the purchase Company Shares shall not be considered ordinary course of businessbusiness consistent with past practice); (C) increase the coverage, contributions, funding requirements or benefits available under any Company Benefit Plan or adopt, establish or create any new plan which would be considered to be a Company Benefit Plan once created; (D) increase compensation (in any form), bonus levels or other benefits payable to any director, officer, employee or consultant of liabilities reflected the Company or reserved against any of its Subsidiaries or grant any general increase in the Financial Statementsrate of wages, salaries, bonuses or voluntarily waive, release, assign, settle or compromise any Proceeding;
(v) make any investment in or to Chile or any person or property located, domiciled or otherwise incorporated, as applicable, in Chileother remuneration, including but not limited tounder any Company Benefit Plan, in the form of cash, cash equivalents, loan, purchase of securities, contribution of capital, property transfer or purchase of any property or assets (except in the ordinary course of business consistent with past practice in the last 12 months or as contemplated in the Exeter Budget);
practice; (viE) engage in make any new business, enterprise or other activity material determination under any Company Benefit Plan that is inconsistent with the existing businesses of the Company in the manner such existing businesses generally have been carried on or (as disclosed in the Public Disclosure Record) planned or proposed to be carried on prior to the date of this Agreement;
(vii) except as provided for in the Exeter Budget in respect of any Exeter Property or as are required by applicable Laws to maintain any Permits in good standing, expend or commit to expend any amounts with respect to expenses for such Exeter Property; or
(viii) authorize any of the foregoing, or enter into or modify any Contract to do any of the foregoing;
(f) the Company will not, and will not cause or permit its subsidiaries to, directly or indirectly, except in the ordinary course of business:
(i) terminate, fail to renew, cancel, waive, release, grant or transfer any rights of material value;
(ii) except in connection with matters otherwise permitted under this Section 4.1, enter into any Contract which would be a Material Contract if in existence on the date hereof, or terminate, cancel, extend, renew or amend, modify or change any Material Contract;
(iii) enter into any lease or sublease of real property (whether as a lessor, sublessor, lessee or sublessee), or modify, amend or exercise any right to renew any lease or sublease of real property or acquire any interest in real property; or
(iv) enter into any Contract containing any provision restricting or triggered by the Contemplated Transactions;
(g) Neither the Company nor its subsidiaries will, except in the ordinary course of business consistent with past practice, other than determinations in furtherance of acceleration, vesting or pursuant similar determinations in connection with the transactions described herein; or (F) take or propose any action to effect any existing Contracts of the foregoing; provided that nothing in this Agreement shall be deemed to (X) guarantee employment for any period of time for, or employmentpreclude the ability of the Purchaser to terminate the employment of, pension, supplemental pension, termination or compensation arrangements or policies or plans in effect on the date hereof, and except as is necessary to comply with applicable Laws:
(i) grant to any officer, director, employee or consultant of the Company or any of its subsidiaries Subsidiaries after the Effective Time, (Y) require the Purchaser to continue any benefit plan or to prevent the amendment, modification or termination thereof after the Effective Date or will prohibit the Purchaser from amending or terminating any benefit plan or arrangement covering any continuing employee on or after the Effective Date, or (Z) constitute an increase in compensation in amendment to any formbenefit plan;
(iixxi) grant make or forgive any general salary increase, fee loans or pay any bonus or other material compensation advances to the directors, officers, employees or consultants of the Company and its subsidiaries;
(iii) except as set out in Section 4.1(g)(iii) of the Exeter Disclosure Letter, take any action with respect to the grant or increase of any severance, change of control, retirement, retention or termination pay;
(iv) enter into or modify any employment or consulting agreement with any officer or director of the Company or its subsidiaries;
(v) terminate the employment or consulting arrangement of any senior management employees (including the Exeter Senior Management), except for cause;
(vi) increase any benefits payable under its current severance or termination pay policies;
(vii) other than as set out in Section 4.1(g)(vii) of the Exeter Disclosure Letter, adopt or amend or make any contribution to or any award under the Stock Option Plan, any restricted share unit plan, deferred share unit plan, performance share unit plan or other bonus, profit sharing, option, pension, retirement, deferred compensation, insurance, incentive compensation, compensation or other similar plan, agreement, trust, fund or arrangement for the benefit of directors or senior officers or former directors or senior officers of the Company or its subsidiaries; or
(viii) take any action to accelerate the time of payment of any compensation or benefits, amend or waive any performance or vesting criteria or accelerate vesting under the Stock Option Plan, except in accordance with its terms as contemplated herein or therein;
(h) neither the Company nor its subsidiaries will make any loan to any officer, director, employee or consultant of the Company or its subsidiaries;
(i) the Company will use its commercially reasonable efforts to cause the current insurance (or re-insurance) policies maintained by the Company, including directors’ and officers’ insurance, not to be cancelled or terminated and to prevent any of the coverage thereunder from lapsing, unless at the time of such termination, cancellation or lapse, replacement policies underwritten by insurance or re-insurance companies of nationally recognized standing having comparable deductions and providing coverage comparable to or greater than the coverage under the cancelled, terminated or lapsed policies for substantially similar premiums are in full force and effect, provided, however, that, except as contemplated by Section 4.8(b), the Company will not obtain or renew any insurance (or re-insurance) policy for a term exceeding 12 months;
(j) the Company will use commercially reasonable efforts to retain the services of its and its subsidiaries’ existing employees and consultants (including the Exeter Senior Management) and will promptly provide written notice to the Purchaser of the resignation or termination of any of its key employees officers, directors, employees, agents or consultants;
(kxxii) neither make any bonus or profit sharing distribution or similar payment of any kind;
(xxiii) waive, release or condition any material non-compete, non-solicit, non-disclosure, confidentiality or other restrictive covenant owed to the Company;
(xxiv) take any action or fail to take any action that would result in the termination, variance or relinquishment of any Company nor its subsidiaries will make an application to amend, terminate, allow to expire Mineral Rights or lapse or otherwise modify any of its Permits or Company Surface Rights; or
(xxv) take any action or fail to take any action which action or failure to act would result in the material loss, expiration or surrender of, or the loss of any material benefit under, or reasonably be expected to cause any Governmental Authority Entities to institute proceedings for the suspensionsuspension of, or the revocation or limitation of rights under, any material Permit Authorizations necessary to conduct its businesses as now being conducted
(c) the Company shall use its commercially reasonable efforts to maintain any material Authorizations necessary to conduct its businesses as now conducted;
(ld) the Company shall use commercially reasonable efforts to cause its current material insurance (or re-insurance) policies maintained by the Company or any of its Subsidiaries not to be cancelled or terminated or any of the coverage thereunder to lapse;
(e) the Company shall not, and shall cause each of its subsidiaries will Subsidiaries not to:
(i) duly take any action inconsistent with past practice relating to the filing of any Tax Return or the withholding, collecting, remitting and timely file all Returns payment of any Tax, except as may be required to be filed by it on or after the date hereof and all such Returns will be true, complete and correct in all material respects and Law;
(ii) timely withholdamend any Tax Return or change any of its methods of reporting income, collectdeductions or accounting for income Tax purposes from those employed in the preparation of its income Tax return for the taxation year ended December 31, remit and pay all Taxes which are 2021, except as may be required by Law;
(iii) make, amend, change or revoke any material Tax election or designation (other than any election that has yet to be withheld, collected, remitted made in respect of any event or paid by it circumstance occurring prior to the extent due and payable except for date of the Agreement), enter into any Taxes contested in good faith pursuant to applicable Laws, and the Company will not (A) change its tax accounting methods, principles or practices, except insofar as may have been required by material agreement with a change in IFRS or applicable Law, (B) settle, compromise or agree to the entry of judgment Governmental Entity with respect to any action, claim or other Proceeding relating to Taxes, (other than surrender any right to claim a material Tax abatement, reduction, deduction, exemption, credit or refunds or consent to the payment, discharge or satisfaction of liabilities reflected or reserved against in the Financial Statements) (C) enter into any tax sharing, tax allocation or tax indemnification agreement, (D) make a request for a tax ruling to any Governmental Authority, or (E) agree to any extension or waiver of the limitation period relating applicable to any material Tax claim or assessment or reassessmentmatter;
(miv) enter into any Tax sharing, Tax allocation, Tax related waiver or Tax indemnification agreement; or
(v) settle or compromise (or offer to settle or compromise) any material Tax claim, audit, proceeding, assessment, re-assessment or liability;
(f) the Company shall prepare, or shall cause to be prepared, and shall duly and timely file prior to the Effective Date all Tax Returns of the Company and its Subsidiaries that are required to be filed on or before the Effective Date, and shall remit all Taxes that are required to be paid in respect of such Tax Returns;
(g) the Company shall keep the Purchaser reasonably informed, on a current basis, of any events, discussions, notices or changes with respect to any Tax or regulatory investigation or any other investigation by a Governmental Entity or action involving the Company or any of its Subsidiaries (other than (i) with respect to OT LLC and (ii) ordinary course communications which could not reasonably be expected to be material to the Company and its Subsidiaries, taken as a whole);
(h) the Company will notconsider in good faith any reasonable requests by the Purchaser that the Company or its Subsidiaries take any action regarding Tax filing matters, including filing of notices of appeal and will not cause or permit its subsidiaries to, settle or compromise any action, claim other actions in respect of notices of assessment from the Canada Revenue Agency or other Proceeding Governmental Entity;
(i) brought against it for damages or providing for the grant of injunctive relief or other non-monetary remedy (“Litigation”) or (ii) brought by any present, former or purported holder of its securities in connection with the Contemplated Transactions;
(n) Purchaser may request that the Company will nottake or cause its Subsidiaries to take any action referred to in Section 5.1(e) where such action is necessary to preserve the Company or relevant Subsidiary’s rights (including, and will not cause without limitation, due to the potential expiry of any limitation or permit its subsidiaries to, commence any Litigation (other than litigation in connection with the collection of accounts receivable, to enforce the terms of this Agreement or the Confidentiality Agreement, to enforce other obligations of the Purchaser or as a result of litigation commenced against the Companystatute-barring period);
(oj) the Company will notshall give the Purchaser reasonable notice of any “investments” (as defined for purposes of section 212.3 of the Tax Act) in any corporation that is a “foreign affiliate” of the Company and/or any of its Subsidiaries (including, and will for greater certainty, an indirect investment described in paragraph 212.3(10)(f) of the Tax Act);
(k) the Company shall not cause or permit its subsidiaries authorize, agree to, propose, enter into or renew modify any Contract (i) containing (A) any limitation contract, agreement, commitment or restriction on the ability of the Company or its subsidiaries orarrangement, following the Effective Time, the ability of the Purchaser or any of its affiliates, to engage in any type of activity or business, (B) any limitation or restriction on the manner in which, or the localities in which, all or any portion of the business of the Company or its subsidiaries or, following the Effective Time, all or any portion of the business of the Purchaser or any of its affiliates, is or would be conducted or (C) any limit or restriction on the ability of the Company or its subsidiaries or, following the Effective Time, the ability of the Purchaser or any of its affiliates, to solicit customers or employees, or (ii) that would reasonably be expected to prevent or significantly impede or materially delay the completion of the Contemplated Transactions;
(p) the Company will not, and will not cause or permit any of its subsidiaries to, take any action which would render, or which reasonably may be expected to render, any representation or warranty made by the Company in this Agreement untrue or inaccurate in any material respect (disregarding for this purpose all materiality or Material Adverse Effect qualifications contained therein) at any time prior to the Effective Time if then made; and
(q) as is applicable, the Company will not, and will not cause or permit its subsidiaries to, agree, announce, resolve, authorize or commit to do any of the foregoingmatters prohibited by the other subsections of this Section 5.1 or resolve to do so.
Appears in 1 contract
Samples: Arrangement Agreement (Turquoise Hill Resources Ltd.)
Covenants of the Company Regarding the Conduct of Business. (1) The Company covenants and agrees that, during the period from the date of this Agreement until the earlier of the Effective Time and the time that this Agreement is terminated in accordance with its terms, unless except as required by this Agreement or as otherwise expressly contemplated by this Agreement or disclosed in Section 5.1 of the Purchaser otherwise consents Disclosure Letter, or as required by applicable Laws or any Governmental Entity or as consented to by the Acquiror in writing (to the extent that such consent is permitted by applicable Law), which consent will shall not be unreasonably withheld, conditioned withheld or delayed, or expressly permitted or specifically contemplated by this Agreement, or as set out in the Exeter Disclosure Letter or as is otherwise required by applicable Law:
(a) the businesses of the Company and its subsidiaries will be conducted only in the ordinary course of business and in accordance with the Exeter Budget), the Company shall, and shall cause each of its subsidiaries will comply with to, conduct its business in the terms of all Material Contracts Ordinary Course, and the Company and its subsidiaries will use commercially reasonable efforts to maintain and preserve intact its their business organizationsorganization, assets, properties, rights, goodwill and business relationships and keep available the services of its officers, respective officers and employees and consultants as a group;
(b) . Without limiting the generality of the foregoing, from the date of this Agreement until the earlier of the Effective Time and the time that this Agreement is terminated in accordance with its terms, except as required by this Agreement or as otherwise expressly contemplated by this Agreement or disclosed in Section 5.1 of the Disclosure Letter, the Company will cooperate and consult through meetings with the Purchasershall not, as the Purchaser may reasonably request, to allow the Purchaser to monitor, and provide reasonable input with respect to the direction of, nor shall it permit any activities relating to the exploration and maintenance of Exeter Properties and discuss with the Purchaser prior to any required public disclosure of exploration results or other technical information provided nothing contained in this Section 4.1(b) shall prevent the Company from publicly disclosing any information required by Law or the rules or policies of the TSX or NYSE MKT after prior notice to the Purchaser and, other than as contemplated by the Exeter Budget, will not make any capital expenditures or other financial commitments in excess of $500,000 or $2,000,000 in the aggregate;
(c) the Company will notits subsidiaries to, directly or indirectly:, without the prior written consent of the Acquiror (such consent not to be unreasonably withheld or delayed):
(a) (i) alter or amend the notice of its articles, articles, charter, charter or by-laws or other constating documents comparable organizational documents; (ii) split, combine or reclassify any shares in the capital of the Company or any of its subsidiaries;
(ii) declare, set aside or pay any dividend on or make any distribution or payment or return of capital in respect of any equity securities of the Company (other than dividends, distributions, payments or return of capital made to the Company);
; (iii) split, divide, consolidate, combine or reclassify the Exeter Shares or any other securities of the Company or its subsidiaries;
(iv) issue, grant, deliver, sell or pledge or authorize pledge, or agree to issue, grant, deliver, sell or pledge pledge, any Exeter Shares or other securities shares in the capital of the Company or its subsidiaries, or securities any rights convertible into or exchangeable or exercisable for, or otherwise evidencing a right to acquire, Exeter Shares shares or other securities of the Company or its subsidiaries, other than the issuance of Exeter Common Shares issuable pursuant to the terms of Exeter the Options outstanding on the date hereof;
; (viv) redeem, purchase or otherwise acquire acquire, or subject offer to any Lienredeem, purchase or otherwise acquire, any of its outstanding Exeter Shares or other securities or securities convertible into or exchangeable or exercisable for Exeter Shares or any such other securities or any shares or other securities of its subsidiaries;
(vi) other than as set out in Section 4.1(c)(vi) of the Exeter Disclosure Letter, amend the terms of any securities of the Company or any of its subsidiaries;
; or (viiv) reduce the stated capital of any of its securities; (b) adopt a plan of liquidation or resolution providing for the liquidation or dissolution of the Company or any of its subsidiaries;
; (viiic) amend its accounting policies or adopt new accounting policies, in each case except as required in accordance with U.S. GAAP; (d) (i) make or rescind any material Tax election, amend any Tax Return, settle or compromise any material liability for Taxes or change or revoke any of its methods of Tax accounting, (ii) enter into any material "closing agreement" within the meaning of Section 7121 of the Code or (iii) take any action with respect to the computation of Taxes or the preparation of Tax Returns that is in any material respect inconsistent with past practice; (e) reorganize, amalgamate amalgamate, consolidate or merge with any other person and will not cause or permit its subsidiaries to reorganize, amalgamate or merge with any other person;
Person; (ix) create any subsidiary or enter into any Contracts or other arrangements regarding the control or management of the operations, or the appointment of governing bodies or enter into any Joint Ventures;
(x) make any material changes to any of its accounting policies, principles, methods, practices or procedures (including by adopting any material new accounting policies, principles, methods, practices or procedures), except as disclosed in the Public Disclosure Record, as required by applicable Laws or under IFRS; or
(xi) enter into, modify or terminate any Contract with respect to any of the foregoing;
(d) the Company will immediately notify the Purchaser orally and then promptly notify the Purchaser in writing of (i) any “material change” (as defined in the Securities Act) in relation to the Company or its subsidiaries, (ii) any event, circumstance or development that has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, (iii) any breach of this Agreement by the Company, or (iv) any event occurring after the date of this Agreement that would render a representation or warranty, if made on that date or the Effective Time, inaccurate;
(e) except as contemplated in the Exeter Budget, the Company will not, and will not cause or permit its subsidiaries to, directly or indirectly, except in connection with this Agreement:
(if) sell, pledge, hypothecate, lease, licencelicense, sell and lease back, mortgage, dispose of or encumber or otherwise transfer, in whole or in part, any of its assets or properties with a transaction value in excess of $10,000 (which for the avoidance of doubt, shall not be considered to include the disposal by the Company or its subsidiaries related to the Material Property;
any subsidiary of obsolete assets); (iig) acquire (by merger, amalgamation, consolidation, arrangement consolidation or acquisition of shares or other equity securities or interests or assets or otherwise) ), directly or indirectly, any assets, securities, properties, interests, business, corporation, partnership, association partnership or other business organization or division thereof or any property or assetthereof, or make any investment either by the purchase of securities, contribution of capital, property transfer, or purchase of any other property or assets of any other person;
Person, or acquire any license rights, other than (iiii) incur the acquisition of any expenses (except raw materials in the ordinary course of business consistent with past practice Ordinary Course or (ii) pursuant to a Contract in existence on the last 12 monthsdate hereof; (h) incur, as required to exercise its rights and discharge its obligations under this Agreementcreate, assume or as contemplated in the Exeter Budget) or incur otherwise become liable for, any indebtedness for borrowed money or any other liability or obligation or issue any debt securities, securities or assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other personPerson, or make any loans loans, capital contributions, investments or advances;
(iv) pay, discharge or satisfy any claim, liability or obligation prior to the same being due, advances other than the payment, discharge or satisfaction, in the ordinary course of business, of liabilities reflected or reserved against in the Financial Statements, or voluntarily waive, release, assign, settle or compromise any Proceeding;
(v) make any investment in or pursuant to Chile or any person or property located, domiciled or otherwise incorporated, as applicable, in Chile, including but not limited to, in the form of cash, cash equivalents, loan, purchase of securities, contribution of capital, property transfer or purchase of any property or assets (except in the ordinary course of business consistent with past practice in the last 12 months or as contemplated in the Exeter Budget);
(vi) engage in any new business, enterprise or other activity that is inconsistent with the existing businesses of the Company in the manner such existing businesses generally have been carried on or (as disclosed in the Public Disclosure Record) planned or proposed to be carried on prior to the date of this Agreement;
(vii) except as provided for in the Exeter Budget in respect of any Exeter Property or as are required by applicable Laws to maintain any Permits in good standing, expend or commit to expend any amounts with respect to expenses for such Exeter Property; or
(viii) authorize any of the foregoing, or enter into or modify any a Contract to do any of the foregoing;
(f) the Company will not, and will not cause or permit its subsidiaries to, directly or indirectly, except in the ordinary course of business:
(i) terminate, fail to renew, cancel, waive, release, grant or transfer any rights of material value;
(ii) except in connection with matters otherwise permitted under this Section 4.1, enter into any Contract which would be a Material Contract if in existence on the date hereof, hereof or terminate, cancel, extend, renew or amend, modify or change in connection with acquisitions permitted under clause (k) of this Section 5.1; (i) prepay any Material Contract;
long-term indebtedness before its scheduled maturity; (iiij) enter into any lease or sublease of real property (whether as a lessor, sublessor, lessee or sublessee), or modify, amend or exercise any right to renew any lease or sublease of real property or acquire any interest in real property; or
(iv) enter into any Contract containing any provision restricting or triggered by the Contemplated Transactions;
(g) Neither the Company nor its subsidiaries will, except in the ordinary course of business or pursuant to any existing Contracts or employment, pension, supplemental pension, termination or compensation arrangements or policies or plans in effect on the date hereof, and except as is necessary to comply with applicable Laws:
(i) grant to any officer, directoremployee, employee consultant or consultant director of the Company or any of its subsidiaries an increase in compensation in any form;
(ii) , or grant any general salary increase; (ii) make any loan to any officer, fee employee, consultant or pay any bonus or other material compensation to the directors, officers, employees or consultants director of the Company and or any of its subsidiaries;
; (iii) except as set out in Section 4.1(g)(iii) of the Exeter Disclosure Letter, take any action with respect to the grant or increase of any severance, change of control, retirementretention, retention bonus or termination pay;
(iv) pay to, or enter into into, establish, amend or modify terminate any employment agreement, deferred compensation or consulting other similar agreement with with, or hire, or terminate employment (except for just cause or poor performance, and the backfill of those positions in the Ordinary Course) of, any officer officer, employee, consultant or director of the Company or any of its subsidiaries;
; (v) terminate the employment or consulting arrangement of any senior management employees (including the Exeter Senior Management), except for cause;
(viiv) increase any benefits payable under its current severance or termination pay policies;
materially amend any Employee Plan; (viiv) other than as set out in Section 4.1(g)(vii) of the Exeter Disclosure Letter, adopt or amend or make any contribution to or any award under the Stock Option Plan, any restricted share unit plan, deferred share unit plan, performance share unit plan increase bonus levels or other bonusbenefits payable to any director, profit sharingexecutive officer, option, pension, retirement, deferred compensation, insurance, incentive compensation, compensation consultant or other similar plan, agreement, trust, fund or arrangement for the benefit of directors or senior officers or former directors or senior officers employee of the Company or any of its subsidiaries; or
(viiivi) take provide for accelerated vesting, removal of (k) settle, pay, discharge, satisfy, compromise, waive, assign or release (i) any action to accelerate the time of payment of any compensation action, claim or benefits, amend or waive any performance or vesting criteria or accelerate vesting under the Stock Option Plan, except in accordance with its terms as contemplated herein or therein;
(h) neither proceeding brought against the Company nor and/or any of its subsidiaries will make in excess of $10,000 (except where the action, claim or proceeding is insured and the Company's contribution does not exceed its deductible), or (ii) any loan to action, claim or proceeding brought by any officerpresent, directorformer or purported holder of its securities in connection with the transactions contemplated by this Agreement or the Plan of Arrangement; (l) enter into any agreement or arrangement that limits or otherwise restricts in any material respect the Company or any successor thereto, employee or consultant that would, after the Effective Time, limit or restrict in any material respect the Company or any of its affiliates from competing in any manner; (m) waive, release or assign any material rights, claims or benefits of the Company or its subsidiaries;
(i) the Company will use its commercially reasonable efforts to cause the current insurance (or re-insurance) policies maintained by the Company, including directors’ and officers’ insurance, not to be cancelled or terminated and to prevent any of the coverage thereunder from lapsing, unless at the time of such termination, cancellation or lapse, replacement policies underwritten by insurance or re-insurance companies of nationally recognized standing having comparable deductions and providing coverage comparable to or greater than the coverage under the cancelled, terminated or lapsed policies for substantially similar premiums are in full force and effect, provided, however, that, except as contemplated by Section 4.8(b), the Company will not obtain or renew any insurance (or re-insurance) policy for a term exceeding 12 months;
(j) the Company will use commercially reasonable efforts to retain the services of its and its subsidiaries’ existing employees and consultants (including the Exeter Senior Management) and will promptly provide written notice to the Purchaser of the resignation or termination of any of its key employees subsidiaries; (n) modify or consultants;
amend in any material respect, transfer or terminate any Material Contract, or waive, release or assign any material rights or claims thereto or thereunder; (ko) neither the Company nor its subsidiaries will make an application to amend, terminate, allow to expire or lapse or otherwise modify any of its Permits or take any action or fail to take any action which action or failure to act would result in the material loss, expiration or surrender of, or the loss of any material benefit under, or reasonably be expected to cause any Governmental Authority Entity to institute proceedings for the suspension, revocation or limitation of rights under, any material Permit Permits necessary to conduct its businesses as now being conducted;
(l) the Company and each of its subsidiaries will (i) duly and timely file all Returns required conducted or as proposed to be filed by it on conducted, or after the date hereof and all such Returns will be true, complete and correct in all material respects and (ii) timely withhold, collect, remit and pay all Taxes which are fail to be withheld, collected, remitted or paid by it to the extent prosecute with commercially reasonable due and payable except for diligence any Taxes contested in good faith pursuant to applicable Laws, and the Company will not (A) change its tax accounting methods, principles or practices, except insofar as may have been required by a change in IFRS or applicable Law, (B) settle, compromise or agree to the entry of judgment with respect to any action, claim or other Proceeding relating to Taxes, (other than the payment, discharge or satisfaction of liabilities reflected or reserved against in the Financial Statements) (C) enter into any tax sharing, tax allocation or tax indemnification agreement, (D) make a request for a tax ruling pending applications to any Governmental Authority, or (E) agree to any extension or waiver of the limitation period relating to any Entities for material Tax claim or assessment or reassessment;
(m) the Company will not, and will not cause or permit its subsidiaries to, settle or compromise any action, claim or other Proceeding (i) brought against it for damages or providing for the grant of injunctive relief or other non-monetary remedy (“Litigation”) or (ii) brought by any present, former or purported holder of its securities in connection with the Contemplated Transactions;
(n) the Company will not, and will not cause or permit its subsidiaries to, commence any Litigation (other than litigation in connection with the collection of accounts receivable, to enforce the terms of this Agreement or the Confidentiality Agreement, to enforce other obligations of the Purchaser or as a result of litigation commenced against the Company);
(o) the Company will not, and will not cause or permit its subsidiaries to, enter into or renew any Contract (i) containing (A) any limitation or restriction on the ability of the Company or its subsidiaries or, following the Effective Time, the ability of the Purchaser or any of its affiliates, to engage in any type of activity or business, (B) any limitation or restriction on the manner in which, or the localities in which, all or any portion of the business of the Company or its subsidiaries or, following the Effective Time, all or any portion of the business of the Purchaser or any of its affiliates, is or would be conducted or (C) any limit or restriction on the ability of the Company or its subsidiaries or, following the Effective Time, the ability of the Purchaser or any of its affiliates, to solicit customers or employees, or (ii) that would reasonably be expected to prevent or significantly impede or materially delay the completion of the Contemplated Transactions;
Permits; (p) declare, set aside or pay any dividends or other distribution (whether in cash, shares or property, or any combination thereof) on the Company will not, and will not cause Common Shares; (q) make any capital expenditure or permit commitment to do so which individually or in the aggregate exceeds $25,000; (r) make any of its subsidiaries to, other expenditure payment or disbursement or take any action that is not in the Ordinary Course and which would render, or which could reasonably may be expected to render, any representation or warranty made by result in the Company in this Agreement untrue materially deviating from the Budget; (s) incur, assume or inaccurate in become otherwise responsible for any material respect Transaction Expenses (disregarding for this purpose all materiality or Material Adverse Effect qualifications contained thereint) at any time prior to the Effective Time if then made; and
(q) as is applicable, the Company will not, and will not cause or permit its subsidiaries toauthorize, agree, announceresolve or otherwise commit, resolvewhether or not in writing, authorize or commit to do any of the foregoing.
(2) The Company shall use commercially reasonable efforts to cause the current insurance (or re-insurance) policies maintained by the Company or any of its subsidiaries, including directors' and officers' insurance, not to be cancelled or terminated or any of the coverage thereunder to lapse, unless simultaneously with such termination, cancellation or lapse, replacement policies underwritten by insurance or re-insurance companies of nationally recognized standing having comparable deductibles and providing coverage equal to or greater than the coverage under the cancelled, terminated or lapsed policies for substantially similar premiums are in full force and effect; provided that, subject to Section 5.6, none of Company or any of its subsidiaries shall obtain or renew any insurance (or re-insurance) policy for a term exceeding 12 months.
Appears in 1 contract
Samples: Arrangement Agreement (International Barrier Technology Inc)
Covenants of the Company Regarding the Conduct of Business. The Company covenants and agrees that, that during the period from the date of this Agreement until the earlier of the Effective Time Date and the time that this Agreement is terminated in accordance with its terms, unless except (A) as expressly required by this Agreement or the Plan of Arrangement, (B) as required by applicable Law or Governmental Entity, (C) as expressly set forth in the Company Disclosure Letter, (D) as a result of or in connection with any COVID-19 Measures (provided that the Company shall consult with the Purchaser otherwise consents and consider in writing good faith any suggestions of the Purchaser prior to undertaking any COVID-19 Measures), (to E) with the extent that prior written consent of the Purchaser, such consent is permitted by applicable Law), which consent will not to be unreasonably withheld, conditioned delayed or delayedconditioned, or expressly permitted or specifically contemplated by this Agreement, or (F) as set out may otherwise be agreed in writing between the Exeter Disclosure Letter or as is otherwise required by applicable LawPurchaser and the Company:
(a) the Company shall and shall cause each of its Subsidiaries to:
(i) conduct its and their respective businesses of only in, and not take any action except in, the Company Ordinary Course and its subsidiaries will be conducted only in compliance with all applicable Laws;
(ii) refrain from undertaking any development related activities, other than in the ordinary course of business Ordinary Course, unless otherwise consulted with and agreed to in accordance with advance by the Exeter Budget, the Company and its subsidiaries will comply with the terms of all Material Contracts Purchaser and the Company Company;
(iii) use commercially reasonable efforts to preserve intact its and their present business organization, goodwill, business relationships and assets (including the Material Properties and all material Authorizations) in all material respects and to keep available the services of its subsidiaries will and their officers and employees as a group;
(iv) use commercially reasonable efforts to maintain and preserve intact its business organizations, assets, properties, rights, goodwill and business relationships and keep available the services all of its officers, employees rights under each of its Material Properties and consultants as a groupAuthorizations;
(bv) the Company will cooperate and consult through meetings with the Purchaser, as the Purchaser may reasonably request, to allow the Purchaser to monitor, and provide reasonable input with respect to the direction and control of, any activities relating to development of the Company and its Subsidiaries’ projects (including any negotiations with Indigenous Groups) or any exploration and maintenance of Exeter Properties and discuss with any properties;
(vi) provide the Purchaser prior and its legal counsel with a reasonable opportunity to review and comment on any required proposed public disclosure of exploration results or other technical information provided nothing contained in this Section 4.1(b) shall prevent the Company from publicly disclosing prior to such disclosure, and give reasonable consideration to any information required comments made by Law or the rules or policies of the TSX or NYSE MKT after prior notice to the Purchaser and, other than as contemplated by the Exeter Budget, will not make any capital expenditures or other financial commitments in excess of $500,000 or $2,000,000 in the aggregate;
(c) the Company will not, directly or indirectly:
(i) alter or amend the notice of articles, articles, charter, by-laws or other constating documents of the Company or and its subsidiaries;
(ii) declare, set aside or pay any dividend on or make any distribution or payment or return of capital in respect of any equity securities of the Company (other than dividends, distributions, payments or return of capital made to the Company);
(iii) split, divide, consolidate, combine or reclassify the Exeter Shares or any other securities of the Company or its subsidiaries;
(iv) issue, grant, sell or pledge or authorize or agree to issue, grant, sell or pledge any Exeter Shares or other securities of the Company or its subsidiaries, or securities convertible into or exchangeable or exercisable for, or otherwise evidencing a right to acquire, Exeter Shares or other securities of the Company or its subsidiaries, other than the issuance of Exeter Shares issuable pursuant to the terms of Exeter Options outstanding on the date hereof;
(v) redeem, purchase or otherwise acquire or subject to any Lien, any of its outstanding Exeter Shares or other securities or securities convertible into or exchangeable or exercisable for Exeter Shares or any such other securities or any shares or other securities of its subsidiaries;
(vi) other than as set out in Section 4.1(c)(vi) of the Exeter Disclosure Letter, amend the terms of any securities of the Company or its subsidiarieslegal counsel;
(vii) adopt a plan of liquidation or resolution providing for the liquidation or dissolution of the Company or its subsidiaries;
(viii) reorganize, amalgamate or merge with any other person and will not cause or permit its subsidiaries to reorganize, amalgamate or merge with any other person;
(ix) create any subsidiary or enter into any Contracts or other arrangements regarding the control or management of the operations, or the appointment of governing bodies or enter into any Joint Ventures;
(x) make any material changes to any of its accounting policies, principles, methods, practices or procedures (including by adopting any material new accounting policies, principles, methods, practices or procedures), except as disclosed in the Public Disclosure Record, as required by applicable Laws or under IFRS; or
(xi) enter into, modify or terminate any Contract with respect to any of the foregoing;
(d) the Company will immediately notify the Purchaser orally and then promptly notify the Purchaser in writing of (i) any “material change” (as defined in the Securities Act) in relation to the Company or its subsidiaries, (ii) any event, circumstance or development that has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, (iii) any breach of this Agreement by the Company, or (iv) any event occurring after the date of this Agreement that would render a representation or warranty, if made on that date or the Effective Time, inaccurate;
(e) except as contemplated in the Exeter Budget, the Company will not, and will not cause or permit its subsidiaries to, directly or indirectly, except in connection with this Agreement:
(i) sell, pledge, lease, licence, dispose of or encumber any assets or properties of the Company or its subsidiaries related to the Material Property;
(ii) acquire (by merger, amalgamation, consolidation, arrangement or acquisition of shares or other equity securities or interests or assets or otherwise) any corporation, partnership, association or other business organization or division thereof or any property or asset, or make any investment by the purchase of securities, contribution of capital, property transfer, or purchase of any property or assets of any other person;
(iii) incur any expenses (except in the ordinary course of business consistent with past practice in the last 12 months, as required to exercise its rights and discharge its obligations under this Agreement, or as contemplated in the Exeter Budget) or incur any indebtedness for borrowed money or issue any debt securities, or assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other person, or make any loans or advances;
(iv) pay, discharge or satisfy any claim, liability or obligation prior to the same being due, other than the payment, discharge or satisfaction, in the ordinary course of business, of liabilities reflected or reserved against in the Financial Statements, or voluntarily waive, release, assign, settle or compromise any Proceeding;
(v) make any investment in or to Chile or any person or property located, domiciled or otherwise incorporated, as applicable, in Chile, including but not limited to, in the form of cash, cash equivalents, loan, purchase of securities, contribution of capital, property transfer or purchase of any property or assets (except in the ordinary course of business consistent with past practice in the last 12 months or as contemplated in the Exeter Budget);
(vi) engage in any new business, enterprise or other activity that is inconsistent with the existing businesses of the Company in the manner such existing businesses generally have been carried on or (as disclosed in the Public Disclosure Record) planned or proposed to be carried on prior to the date of this Agreement;
(vii) except as provided for in the Exeter Budget in respect of any Exeter Property or as are required by applicable Laws to maintain any Permits in good standing, expend or commit to expend any amounts with respect to expenses for such Exeter Property; or
(viii) authorize any of the foregoing, or enter into or modify any Contract to do any of the foregoing;
(f) the Company will not, and will not cause or permit its subsidiaries to, directly or indirectly, except in the ordinary course of business:
(i) terminate, fail to renew, cancel, waive, release, grant or transfer any rights of material value;
(ii) except in connection with matters otherwise permitted under this Section 4.1, enter into any Contract which would be a Material Contract if in existence on the date hereof, or terminate, cancel, extend, renew or amend, modify or change any Material Contract;
(iii) enter into any lease or sublease of real property (whether as a lessor, sublessor, lessee or sublessee), or modify, amend or exercise any right to renew any lease or sublease of real property or acquire any interest in real property; or
(iv) enter into any Contract containing any provision restricting or triggered by the Contemplated Transactions;
(g) Neither the Company nor its subsidiaries will, except in the ordinary course of business or pursuant to any existing Contracts or employment, pension, supplemental pension, termination or compensation arrangements or policies or plans in effect on the date hereof, and except as is necessary to comply with applicable Laws:
(i) grant to any officer, director, employee or consultant of the Company or its subsidiaries an increase in compensation in any form;
(ii) grant any general salary increase, fee or pay any bonus or other material compensation to the directors, officers, employees or consultants of the Company and its subsidiaries;
(iii) except as set out in Section 4.1(g)(iii) of the Exeter Disclosure Letter, take any action with respect to the grant or increase of any severance, change of control, retirement, retention or termination pay;
(iv) enter into or modify any employment or consulting agreement with any officer or director of the Company or its subsidiaries;
(v) terminate the employment or consulting arrangement of any senior management employees (including the Exeter Senior Management), except for cause;
(vi) increase any benefits payable under its current severance or termination pay policies;
(vii) other than as set out in Section 4.1(g)(vii) of the Exeter Disclosure Letter, adopt or amend or make any contribution to or any award under the Stock Option Plan, any restricted share unit plan, deferred share unit plan, performance share unit plan or other bonus, profit sharing, option, pension, retirement, deferred compensation, insurance, incentive compensation, compensation or other similar plan, agreement, trust, fund or arrangement for the benefit of directors or senior officers or former directors or senior officers of the Company or its subsidiaries; or
(viii) take any action to accelerate the time of payment of any compensation or benefits, amend or waive any performance or vesting criteria or accelerate vesting under the Stock Option Plan, except in accordance with its terms as contemplated herein or therein;
(h) neither the Company nor its subsidiaries will make any loan to any officer, director, employee or consultant of the Company or its subsidiaries;
(i) the Company will use its commercially reasonable efforts to cause the current insurance (or re-insurance) policies maintained by the Company, including directors’ and officers’ insurance, not to be cancelled or terminated and to prevent any of the coverage thereunder from lapsing, unless at the time of such termination, cancellation or lapse, replacement policies underwritten by insurance or re-insurance companies of nationally recognized standing having comparable deductions and providing coverage comparable to or greater than the coverage under the cancelled, terminated or lapsed policies for substantially similar premiums are in full force and effect, provided, however, that, except as contemplated by Section 4.8(b), the Company will not obtain or renew any insurance (or re-insurance) policy for a term exceeding 12 months;
(j) the Company will use commercially reasonable efforts to retain the services of its and its subsidiaries’ existing employees and consultants (including the Exeter Senior Management) and will promptly provide written notice to the Purchaser of the resignation or termination of any of its key employees or consultants;
(k) neither the Company nor its subsidiaries will make an application to amend, terminate, allow to expire or lapse or otherwise modify any of its Permits or take any action or fail to take any action which action or failure to act would result in the material loss, expiration or surrender of, or the loss of any material benefit under, or reasonably be expected to cause any Governmental Authority to institute proceedings for the suspension, revocation or limitation of rights under, any material Permit necessary to conduct its businesses as now being conducted;
(l) the Company and each of its subsidiaries will (iA) duly and timely file all Tax Returns required to be filed by it on or after the date hereof and all such Tax Returns will be true, complete and correct in all material respects and consistent in all material respects with Ordinary Course past practice; (iiB) timely withhold, collect, remit and pay all Taxes which are to be withheld, collected, remitted or paid by it to the extent due and payable except for any Taxes contested in good faith pursuant to applicable Laws; (C) not make or rescind any material express or deemed election relating to Taxes; (D) not enter into any Tax sharing, Tax allocation, Tax related waiver or Tax indemnification agreement, nor make a request for a tax ruling or enter into a closing agreement with any taxing authorities; (E) not settle or compromise any material claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to Taxes; and (F) not amend any Tax Return nor change in any material respect any of its methods of reporting income, deductions or accounting for income tax purposes from those employed in the preparation of its income tax return for the tax year ended December 31, 2020 except as may be required by applicable Laws;
(viii) duly and timely file all material forms, reports, news releases, schedules, statements and other documents required to be filed pursuant to any applicable corporate Laws or applicable Canadian Securities Laws, provided however that the Company shall in any event consult with the Purchaser prior to making any filing required pursuant to applicable Canadian Securities Laws, providing in such cases the Purchaser with a reasonable opportunity to review and comment on any such filing or re- lease, recognizing that whether or not such comments are appropriate will be determined by the Company, acting reasonably;
(ix) notify the Purchaser immediately orally and then promptly in writing of any Material Adverse Change and of any material governmental or third party complaints, investigations or hearings (or communications indicating that the same may be contemplated), provided nothing in the foregoing shall require the Company to disclose information to the Purchaser which it is prohibited from disclosing pursuant to a written confidentiality agreement, confidentiality provision or an agreement with a third party or regulatory restriction;
(x) without limiting the generality of the foregoing, vote or cause to be voted all shares and other securities held by the Company or a Subsidiary of the Company, and use commercially reasonable efforts to cause all nominees of the Company will on the board of directors or any management committee or other committee of a Subsidiary of the Company to vote, in a manner consistent with all of the foregoing sections, including voting against, or causing such persons to vote against, any resolution to approve any act, agreement or transaction prohibited by any of the foregoing sections; and
(xi) the Company shall use commercially reasonable efforts to obtain resignations and mutual releases in the form of Schedule C hereto from such the directors and officers of the Company and its Subsidiaries disclosed in Schedule 5.1(a)(x) of the Company Disclosure Letter, to be effective at the Effective Time;
(b) without limiting the generality of Section 5.1(a), and other than pursuant to transactions contemplated by the Arrangement and this Agreement, the Company shall not, and shall cause each of its Subsidiaries not to, directly or indirectly, during the period from the date of this Agreement until the earlier of the Effective Time and the time that this Agreement is terminated in accordance with its terms:
(i) split, consolidate or reclassify any of its outstanding securities or undertake any other capital reorganization, or reduce capital in respect of its outstanding shares;
(ii) amend its articles of incorporation, by-laws or other comparable organizational documents or the terms of any of its outstanding securities, including any outstanding indebtedness;
(iii) issue or sell, or agree to issue or sell, any securities (other than the issuance of Company Shares upon the exercise of currently outstanding Options or other Convertible Securities in accordance with their terms), or redeem, offer to purchase, purchase or cause to be purchased any of its outstanding securities;
(iv) amend the terms of any securities of the Company or any of its Subsidiaries;
(v) without limiting the generality of Section 5.1(b)(iii), authorize, approve, agree to issue, issue or award any Options under the Option Plan, any Share Awards under the Share Awards Plan or any other Convertible Securities;
(vi) adopt a shareholder rights plan that provides rights to the Company Shareholders to purchase any securities of the Company as a result of this Arrangement;
(vii) enter into, create, declare, adopt, amend, vary or modify any bonus, target bonus, profit sharing, incentive, salary or other compensation, equity based award, pension, retirement, deferred compensation, severance, change in control, stock option, employment or other employee benefit plan, agreement, trust fund, award or arrangement for the benefit or welfare of any officer, director or employee, or similar rights or other benefits except for changes in compensation for employees (other than directors and officers) in the Ordinary Course or in respect of any arrangement entered into prior to the date of this Agreement or changes agreed between the Company and the Purchaser;
(viii) acquire or dispose of any securities, except in the Ordinary Course;
(ix) reorganize, amalgamate, combine or merge the Company or its Subsidiaries with any other Person;
(x) acquire or commit to acquire any assets or group of related assets (through one or more related or unrelated acquisitions) having a value in excess of $100,000 in the aggregate;
(xi) incur, or commit to, capital expenditures in excess of $250,000 in the aggregate unless such capital expenditures have been approved prior to the date hereof by the Board of Directors in the Ordinary Course;
(xii) sell, lease, option, encumber or otherwise dispose of, or commit to sell, lease, option, encumber or otherwise dispose of, or allow any third party to encumber for a period of five Business Days without contesting in good faith, any assets or group of related assets (through one or more related or unrelated transactions) having a value in excess of $100,000 in the aggregate, excluding any sale in the Ordinary Course or any sale of any obsolete assets, or transfer any interest in any of the Company’s Subsidiaries to a third party unless required under existing banking facilities;
(xiii) approve the grant of any power of attorney to allow any Person to take any action on behalf of the Company or any of its Subsidiaries or the amendment of any power of attorney allowing any person to take any action on behalf of the Company or any of its Subsidiaries;
(xiv) enter into or complete any transaction not in the Ordinary Course;
(xv) (A) change its tax accounting methods, principles incur or practicescommit to incur any indebtedness for borrowed money, except insofar as may have been required by a change for the borrowing of working capital in IFRS the Ordinary Course or applicable Lawissue any debt securities, (B) settleincur or commit to incur, compromise or agree to guarantee, endorse or otherwise become responsible for, any other material liability, obligation or indemnity or the entry obligation of judgment with respect any person other than the wholly-owned Subsidiaries of the Company, or (C) make any loans or advances to any actionPerson other than the wholly-owned Subsidiaries of the Company;
(xvi) enter into any binding credit agreement in respect of any credit facility or project finance facility;
(xvii) make any changes to existing accounting methods, claim principles, practices or policies or internal controls other Proceeding relating to Taxesthan as required by applicable Law or by IFRS;
(xviii) pay, (discharge or satisfy any material claims, liabilities or obligations other than the payment, discharge or satisfaction satisfaction, in the Ordinary Course in accordance with their terms, of liabilities reflected or reserved against in the Financial Statements) (C) enter into any tax sharingCompany’s financial statements as at and for the period ended December 31, tax allocation 2020 or tax indemnification agreement, (D) make a request for a tax ruling to any Governmental Authority, or (E) agree to any extension or waiver of incurred in the limitation period relating to any material Tax claim or assessment or reassessmentOrdinary Course;
(mxix) engage in any transaction with any Related Parties other than with the Company will not, and will not cause or permit its subsidiaries to, settle or compromise any action, claim or other Proceeding (i) brought against it for damages or providing for Subsidiaries in the grant of injunctive relief or other non-monetary remedy (“Litigation”) or (ii) brought by any present, former or purported holder of its securities in connection with the Contemplated TransactionsOrdinary Course;
(nxx) commence or settle or assign any rights relating to or any interest in any litigation, proceeding, claim, action, assessment or investigation that is material to the Company will not, and will not cause involving the Company or permit any of its subsidiaries to, commence Subsidiaries or material asset of any Litigation (other than litigation in connection with the collection of accounts receivable, to enforce the terms of this Agreement or the Confidentiality Agreement, to enforce other obligations of the Purchaser or as a result of litigation commenced against the Company)them;
(oxxi) waive, release, grant, transfer, exercise, modify or amend in any material respect, other than in the Company will notOrdinary Course, and will not cause or permit its subsidiaries to, enter into or renew any Contract (i) containing (A) any limitation or restriction on the ability existing contractual rights in respect of any joint ventures of the Company or its subsidiaries or, following the Effective Time, the ability of the Purchaser or any of its affiliates, to engage in any type of activity or businessCompany, (B) any limitation Authorization, lease, concession, contract or restriction on the manner in whichother document, or the localities in which, all or any portion of the business of the Company or its subsidiaries or, following the Effective Time, all or any portion of the business of the Purchaser or any of its affiliates, is or would be conducted or (C) any limit other material legal rights or restriction on the ability of the Company or its subsidiaries or, following the Effective Time, the ability of the Purchaser or any of its affiliates, to solicit customers or employees, or (ii) that would reasonably be expected to prevent or significantly impede or materially delay the completion of the Contemplated Transactionsclaims;
(pxxii) the Company will notpropose or enter into any agreement, and will not cause or permit any of its subsidiaries toarrangement, take any action which would rendercommitment, or which reasonably may be expected offer with respect to render, any representation a material joint venture or warranty made by the Company in this Agreement untrue other mutual co-operation or inaccurate in any material respect (disregarding for this purpose all materiality or Material Adverse Effect qualifications contained therein) at any time prior to the Effective Time if then made; anddistribution agreement;
(qxxiii) as is applicableenter into any interest rate, currency or equity swaps, xxxxxx, derivatives or other similar financial instruments other than (A) in the Company will not, and will not cause or permit its subsidiaries to, agree, announce, resolve, authorize or commit to do any of the foregoing.Ordinary Course,
Appears in 1 contract
Samples: Arrangement Agreement
Covenants of the Company Regarding the Conduct of Business. The Company covenants and agrees thatthat during the period from the date of this Agreement until the earlier of the Effective Date and the time that this Agreement is terminated in accordance with its terms and except as (i) mandated by the Manager, Technical Committee or Operating Committee, (ii) expressly permitted or required by this Agreement or the Plan of Arrangement, (iii) required by applicable Law or a Governmental Entity, or (iv) to comply with COVID-19 Measures, or unless the Purchaser shall otherwise request or provide consent in writing, such consent not to be unreasonably withheld, conditioned or delayed:
(a) the Company shall and shall cause each of its Subsidiaries to:
(i) conduct its and their respective businesses only in, and not take any action except in, the ordinary course of business consistent with past practice; and
(ii) use commercially reasonable efforts to preserve intact its and their present business organization, goodwill, properties, business relationships and assets in all material respects and to keep available the services of its and their officers and employees as a group and to maintain good relations with suppliers, customers, landlords, licensors, lessors, creditors, distributors and all other Persons having business relationships with the Company and its Subsidiaries (other than the Parent and its affiliates).
(b) without limiting the generality of Section 5.1(a), the Company shall not, and shall cause each of its Subsidiaries not to, directly or indirectly, during the period from the date of this Agreement until the earlier of the Effective Time and the time that this Agreement is terminated in accordance with its terms, unless the Purchaser otherwise consents in writing (to the extent that such consent is permitted by applicable Law), which consent will not be unreasonably withheld, conditioned or delayed, or expressly permitted or specifically contemplated by this Agreement, or as set out in the Exeter Disclosure Letter or as is otherwise required by applicable Law:
(ai) amend or propose to amend its articles or other comparable constating documents;
(ii) issue, sell, grant, award, pledge, dispose of or otherwise encumber or agree to issue, sell, grant, award, pledge, dispose of or otherwise encumber any Company Shares or other equity or voting interests or any options, share appreciation rights, warrants, calls, conversion or exchange privileges or rights of any kind to acquire (whether on exchange, exercise, conversion or otherwise) any Company Shares or other equity or voting interests or other securities or, other than in respect of Permitted Liens, any shares of its Subsidiaries (including, for greater certainty, any equity based awards), other than pursuant to the businesses vesting or settlement of Company DSUs, Company PSUs or Company RSUs in accordance with their terms or the issuance of Company and its subsidiaries will be conducted only DSUs in the ordinary course of business and in accordance consistent with the Exeter Budget, the Company and its subsidiaries will comply with the terms of all Material Contracts and the Company and its subsidiaries will use commercially reasonable efforts to maintain and preserve intact its business organizations, assets, properties, rights, goodwill and business relationships and keep available the services of its officers, employees and consultants as a group;
(b) the Company will cooperate and consult through meetings with the Purchaser, as the Purchaser may reasonably request, to allow the Purchaser to monitor, and provide reasonable input with respect to the direction of, any activities relating to the exploration and maintenance of Exeter Properties and discuss with the Purchaser prior to any required public disclosure of exploration results or other technical information provided nothing contained in this Section 4.1(b) shall prevent the Company from publicly disclosing any information required by Law or the rules or policies of the TSX or NYSE MKT after prior notice to the Purchaser and, other than as contemplated by the Exeter Budget, will not make any capital expenditures or other financial commitments in excess of $500,000 or $2,000,000 in the aggregate;
(c) the Company will not, directly or indirectly:
(i) alter or amend the notice of articles, articles, charter, by-laws or other constating documents of the Company or its subsidiaries;
(ii) declare, set aside or pay any dividend on or make any distribution or payment or return of capital in respect of any equity securities of the Company (other than dividends, distributions, payments or return of capital made to the Company)past practice;
(iii) adjust, split, divide, consolidate, combine or reclassify the Exeter any outstanding Company Shares or any other the securities of the Company or any of its subsidiariesSubsidiaries;
(iv) issueredeem, grant, sell purchase or pledge otherwise acquire or authorize offer to purchase or agree to issue, grant, sell or pledge any Exeter otherwise acquire Company Shares or other securities of the Company or its subsidiaries, or securities convertible into or exchangeable or exercisable for, or otherwise evidencing a right to acquire, Exeter Shares or other any securities of the Company or its subsidiaries, other than the issuance of Exeter Shares issuable pursuant to the terms of Exeter Options outstanding on the date hereof;
(v) redeem, purchase or otherwise acquire or subject to any Lien, any of its outstanding Exeter Shares or other securities Subsidiaries or securities convertible into or exchangeable or exercisable for Exeter Shares or any such other securities or any shares capital stock or other securities of the Company or any of its subsidiariesSubsidiaries;
(viv) other than as set out in Section 4.1(c)(vi) of the Exeter Disclosure Letter, amend the terms of any securities of the Company or any of its subsidiariesSubsidiaries;
(vi) create any Subsidiary;
(vii) adopt or propose a plan of liquidation or resolution resolutions providing for the liquidation or dissolution of the Company or any of its subsidiariesSubsidiaries;
(viii) reorganize, amalgamate or merge the Company or its Subsidiaries with any other person and will not cause or permit its subsidiaries to reorganize, amalgamate or merge with any other personPerson;
(ix) create any subsidiary or enter into any Contracts or other arrangements regarding the control or management of the operations, or the appointment of governing bodies or enter into any Joint Ventures;
(x) make any material changes to any of its accounting policies, principles, methods, practices or procedures (including by adopting any material new accounting policies, principles, methods, practices or procedures), except as disclosed in the Public Disclosure Record, as required by applicable Laws or under IFRS; or
(xi) enter into, modify or terminate any Contract with respect to any of the foregoing;
(d) the Company will immediately notify the Purchaser orally and then promptly notify the Purchaser in writing of (i) any “material change” (as defined in the Securities Act) in relation to the Company or its subsidiaries, (ii) any event, circumstance or development that has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, (iii) any breach of this Agreement by the Company, or (iv) any event occurring after the date of this Agreement that would render a representation or warranty, if made on that date or the Effective Time, inaccurate;
(e) except as contemplated in the Exeter Budget, the Company will not, and will not cause or permit its subsidiaries to, directly or indirectly, except in connection with this Agreement:
(i) sell, pledge, lease, dispose of, mortgage, licence, encumber or otherwise transfer or agree to sell, pledge, lease, dispose of of, mortgage, licence, encumber or encumber otherwise transfer any tangible or intangible assets or properties of the Company or any of its subsidiaries related to Subsidiaries or any interest in any tangible assets of the Material PropertyCompany or any of its Subsidiaries having a value in excess of US$5,000,000 in the aggregate, including for these purposes any Company Mineral Rights or mineral product from Company Mineral Rights but excluding any transaction in the ordinary course consistent with past practice;
(iix) acquire (by merger, amalgamation, consolidation, arrangement or acquisition of shares or other equity securities or interests or assets or otherwise) or agree to acquire, directly or indirectly, in one transaction or in a series of related transactions, any corporationPerson, partnershipassets, association securities, properties, interests or other business organization businesses or division thereof or any property or assetthereof, or make any investment or agree to make any investment, directly or indirectly, in one transaction or in a series of related transactions, in any case having a value in excess of US$5,000,000 in the aggregate, either by the purchase of shares or securities, contribution contributions of capitalcapital (other than to wholly-owned Subsidiaries), property transfer, transfer or purchase of any property or assets of any other personPerson;
(iiixi) incur any expenses capital expenditures or enter into any agreement obligating the Company or its Subsidiaries (other than OT LLC) to provide for future capital expenditures which individually or in the aggregate exceeds US$5,000,000;
(xii) enter into any Contract with a value of US$1,000,000 or greater or with a term greater than one year;
(xiii) make any changes in financial accounting methods, principles, policies or practices, except as required, in each case, by IFRS;
(xiv) reduce the stated capital of the Company Shares or the shares of any of its Subsidiaries;
(xv) other than as contemplated in the Amended HoA, incur, create, assume or otherwise become liable for any indebtedness for borrowed money or any other material liability or obligation or issue any debt securities, or guarantee, endorse or otherwise become responsible for, the obligations of any other Person or make any loans or advances;
(xvi) pay, discharge, settle, satisfy, compromise, waive, assign or release any claims, rights, liabilities or obligations including any litigation, proceeding or investigation other than:
(A) the payment, discharge, settlement or satisfaction of liabilities in an amount less than US$1,000,000 in the aggregate; or
(B) payment of any reasonable fees related to the Arrangement;
(xvii) enter into any agreement that, if entered into prior to the date hereof, would have been a Company Material Contract, or modify, amend in any material respect, transfer or terminate any Company Material Contract, or waive, release, or assign any material rights or claims thereto or thereunder;
(xviii) commence any litigation or proceeding other than in connection with the collection of accounts or the enforcement of any rights under this Agreement;
(xix) enter into or terminate any material interest rate, currency, equity or commodity swaps, xxxxxx, derivatives, options, forward sales contracts or other financial instruments or like transaction;
(xx) except as required by the terms of the Company Benefit Plans or any written employment Contracts in effect on the date of this Agreement and disclosed in Section 3.1(q)(ii) of the Company Disclosure Letter, (A) enter into, grant, accelerate, or increase any severance, change of control or termination pay to (or amend any existing arrangement relating to the foregoing with) any director, officer, employee or individual consultant of the Company or any of its Subsidiaries; (B) grant, accelerate, or increase any payment, award (equity or otherwise) or other benefits payable to, or for the benefit of, or make any bonus payment to, any director, officer, employee or individual consultant of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice in the last 12 months, as required (provided that payments of bonuses which are to exercise its rights and discharge its obligations under this Agreement, or as contemplated in the Exeter Budget) or incur any indebtedness for borrowed money or issue any debt securities, or assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other person, or make any loans or advances;
(iv) pay, discharge or satisfy any claim, liability or obligation prior be used to the same being due, other than the payment, discharge or satisfaction, in the purchase Company Shares shall not be considered ordinary course of businessbusiness consistent with past practice); (C) increase the coverage, contributions, funding requirements or benefits available under any Company Benefit Plan or adopt, establish or create any new plan which would be considered to be a Company Benefit Plan once created; (D) increase compensation (in any form), bonus levels or other benefits payable to any director, officer, employee or consultant of liabilities reflected the Company or reserved against any of its Subsidiaries or grant any general increase in the Financial Statementsrate of wages, salaries, bonuses or voluntarily waive, release, assign, settle or compromise any Proceeding;
(v) make any investment in or to Chile or any person or property located, domiciled or otherwise incorporated, as applicable, in Chileother remuneration, including but not limited tounder any Company Benefit Plan, in the form of cash, cash equivalents, loan, purchase of securities, contribution of capital, property transfer or purchase of any property or assets (except in the ordinary course of business consistent with past practice in the last 12 months or as contemplated in the Exeter Budget);
practice; (viE) engage in make any new business, enterprise or other activity material determination under any Company Benefit Plan that is inconsistent with the existing businesses of the Company in the manner such existing businesses generally have been carried on or (as disclosed in the Public Disclosure Record) planned or proposed to be carried on prior to the date of this Agreement;
(vii) except as provided for in the Exeter Budget in respect of any Exeter Property or as are required by applicable Laws to maintain any Permits in good standing, expend or commit to expend any amounts with respect to expenses for such Exeter Property; or
(viii) authorize any of the foregoing, or enter into or modify any Contract to do any of the foregoing;
(f) the Company will not, and will not cause or permit its subsidiaries to, directly or indirectly, except in the ordinary course of business:
(i) terminate, fail to renew, cancel, waive, release, grant or transfer any rights of material value;
(ii) except in connection with matters otherwise permitted under this Section 4.1, enter into any Contract which would be a Material Contract if in existence on the date hereof, or terminate, cancel, extend, renew or amend, modify or change any Material Contract;
(iii) enter into any lease or sublease of real property (whether as a lessor, sublessor, lessee or sublessee), or modify, amend or exercise any right to renew any lease or sublease of real property or acquire any interest in real property; or
(iv) enter into any Contract containing any provision restricting or triggered by the Contemplated Transactions;
(g) Neither the Company nor its subsidiaries will, except in the ordinary course of business consistent with past practice, other than determinations in furtherance of acceleration, vesting or pursuant similar determinations in connection with the transactions described herein; or (F) take or propose any action to effect any existing Contracts of the foregoing; provided that nothing in this Agreement shall be deemed to (X) guarantee employment for any period of time for, or employmentpreclude the ability of the Purchaser to terminate the employment of, pension, supplemental pension, termination or compensation arrangements or policies or plans in effect on the date hereof, and except as is necessary to comply with applicable Laws:
(i) grant to any officer, director, employee or consultant of the Company or any of its subsidiaries Subsidiaries after the Effective Time, (Y) require the Purchaser to continue any benefit plan or to prevent the amendment, modification or termination thereof after the Effective Date or will prohibit the Purchaser from amending or terminating any benefit plan or arrangement covering any continuing employee on or after the Effective Date, or (Z) constitute an increase in compensation in amendment to any formbenefit plan;
(iixxi) grant make or forgive any general salary increase, fee loans or pay any bonus or other material compensation advances to the directors, officers, employees or consultants of the Company and its subsidiaries;
(iii) except as set out in Section 4.1(g)(iii) of the Exeter Disclosure Letter, take any action with respect to the grant or increase of any severance, change of control, retirement, retention or termination pay;
(iv) enter into or modify any employment or consulting agreement with any officer or director of the Company or its subsidiaries;
(v) terminate the employment or consulting arrangement of any senior management employees (including the Exeter Senior Management), except for cause;
(vi) increase any benefits payable under its current severance or termination pay policies;
(vii) other than as set out in Section 4.1(g)(vii) of the Exeter Disclosure Letter, adopt or amend or make any contribution to or any award under the Stock Option Plan, any restricted share unit plan, deferred share unit plan, performance share unit plan or other bonus, profit sharing, option, pension, retirement, deferred compensation, insurance, incentive compensation, compensation or other similar plan, agreement, trust, fund or arrangement for the benefit of directors or senior officers or former directors or senior officers of the Company or its subsidiaries; or
(viii) take any action to accelerate the time of payment of any compensation or benefits, amend or waive any performance or vesting criteria or accelerate vesting under the Stock Option Plan, except in accordance with its terms as contemplated herein or therein;
(h) neither the Company nor its subsidiaries will make any loan to any officer, director, employee or consultant of the Company or its subsidiaries;
(i) the Company will use its commercially reasonable efforts to cause the current insurance (or re-insurance) policies maintained by the Company, including directors’ and officers’ insurance, not to be cancelled or terminated and to prevent any of the coverage thereunder from lapsing, unless at the time of such termination, cancellation or lapse, replacement policies underwritten by insurance or re-insurance companies of nationally recognized standing having comparable deductions and providing coverage comparable to or greater than the coverage under the cancelled, terminated or lapsed policies for substantially similar premiums are in full force and effect, provided, however, that, except as contemplated by Section 4.8(b), the Company will not obtain or renew any insurance (or re-insurance) policy for a term exceeding 12 months;
(j) the Company will use commercially reasonable efforts to retain the services of its and its subsidiaries’ existing employees and consultants (including the Exeter Senior Management) and will promptly provide written notice to the Purchaser of the resignation or termination of any of its key employees officers, directors, employees, agents or consultants;
(kxxii) neither make any bonus or profit sharing distribution or similar payment of any kind;
(xxiii) waive, release or condition any material non-compete, non-solicit, nondisclosure, confidentiality or other restrictive covenant owed to the Company;
(xxiv) take any action or fail to take any action that would result in the termination, variance or relinquishment of any Company nor its subsidiaries will make an application to amend, terminate, allow to expire Mineral Rights or lapse or otherwise modify any of its Permits or Company Surface Rights; or
(xxv) take any action or fail to take any action which action or failure to act would result in the material loss, expiration or surrender of, or the loss of any material benefit under, or reasonably be expected to cause any Governmental Authority Entities to institute proceedings for the suspensionsuspension of, or the revocation or limitation of rights under, any material Permit Authorizations necessary to conduct its businesses as now being conducted
(c) the Company shall use its commercially reasonable efforts to maintain any material Authorizations necessary to conduct its businesses as now conducted;
(ld) the Company shall use commercially reasonable efforts to cause its current material insurance (or re-insurance) policies maintained by the Company or any of its Subsidiaries not to be cancelled or terminated or any of the coverage thereunder to lapse;
(e) the Company shall not, and shall cause each of its subsidiaries will Subsidiaries not to:
(i) duly take any action inconsistent with past practice relating to the filing of any Tax Return or the withholding, collecting, remitting and timely file all Returns payment of any Tax, except as may be required to be filed by it on or after the date hereof and all such Returns will be true, complete and correct in all material respects and Law;
(ii) timely withholdamend any Tax Return or change any of its methods of reporting income, collectdeductions or accounting for income Tax purposes from those employed in the preparation of its income Tax return for the taxation year ended December 31, remit and pay all Taxes which are 2021, except as may be required by Law;
(iii) make, amend, change or revoke any material Tax election or designation (other than any election that has yet to be withheld, collected, remitted made in respect of any event or paid by it circumstance occurring prior to the extent due and payable except for date of the Agreement), enter into any Taxes contested in good faith pursuant to applicable Laws, and the Company will not (A) change its tax accounting methods, principles or practices, except insofar as may have been required by material agreement with a change in IFRS or applicable Law, (B) settle, compromise or agree to the entry of judgment Governmental Entity with respect to any action, claim or other Proceeding relating to Taxes, (other than surrender any right to claim a material Tax abatement, reduction, deduction, exemption, credit or refunds or consent to the payment, discharge or satisfaction of liabilities reflected or reserved against in the Financial Statements) (C) enter into any tax sharing, tax allocation or tax indemnification agreement, (D) make a request for a tax ruling to any Governmental Authority, or (E) agree to any extension or waiver of the limitation period relating applicable to any material Tax claim or assessment or reassessmentmatter;
(miv) enter into any Tax sharing, Tax allocation, Tax related waiver or Tax indemnification agreement; or
(v) settle or compromise (or offer to settle or compromise) any material Tax claim, audit, proceeding, assessment, re-assessment or liability;
(f) the Company shall prepare, or shall cause to be prepared, and shall duly and timely file prior to the Effective Date all Tax Returns of the Company and its Subsidiaries that are required to be filed on or before the Effective Date, and shall remit all Taxes that are required to be paid in respect of such Tax Returns;
(g) the Company shall keep the Purchaser reasonably informed, on a current basis, of any events, discussions, notices or changes with respect to any Tax or regulatory investigation or any other investigation by a Governmental Entity or action involving the Company or any of its Subsidiaries (other than (i) with respect to OT LLC and (ii) ordinary course communications which could not reasonably be expected to be material to the Company and its Subsidiaries, taken as a whole);
(h) the Company will notconsider in good faith any reasonable requests by the Purchaser that the Company or its Subsidiaries take any action regarding Tax filing matters, including filing of notices of appeal and will not cause or permit its subsidiaries to, settle or compromise any action, claim other actions in respect of notices of assessment from the Canada Revenue Agency or other Proceeding Governmental Entity;
(i) brought against it for damages or providing for the grant of injunctive relief or other non-monetary remedy (“Litigation”) or (ii) brought by any present, former or purported holder of its securities in connection with the Contemplated Transactions;
(n) Purchaser may request that the Company will nottake or cause its Subsidiaries to take any action referred to in Section 5.1(e) where such action is necessary to preserve the Company or relevant Subsidiary’s rights (including, and will not cause without limitation, due to the potential expiry of any limitation or permit its subsidiaries to, commence any Litigation (other than litigation in connection with the collection of accounts receivable, to enforce the terms of this Agreement or the Confidentiality Agreement, to enforce other obligations of the Purchaser or as a result of litigation commenced against the Companystatute-barring period);
(oj) the Company will notshall give the Purchaser reasonable notice of any “investments” (as defined for purposes of section 212.3 of the Tax Act) in any corporation that is a “foreign affiliate” of the Company and/or any of its Subsidiaries (including, and will for greater certainty, an indirect investment described in paragraph 212.3(10)(f) of the Tax Act);
(k) the Company shall not cause or permit its subsidiaries authorize, agree to, propose, enter into or renew modify any Contract (i) containing (A) any limitation contract, agreement, commitment or restriction on the ability of the Company or its subsidiaries orarrangement, following the Effective Time, the ability of the Purchaser or any of its affiliates, to engage in any type of activity or business, (B) any limitation or restriction on the manner in which, or the localities in which, all or any portion of the business of the Company or its subsidiaries or, following the Effective Time, all or any portion of the business of the Purchaser or any of its affiliates, is or would be conducted or (C) any limit or restriction on the ability of the Company or its subsidiaries or, following the Effective Time, the ability of the Purchaser or any of its affiliates, to solicit customers or employees, or (ii) that would reasonably be expected to prevent or significantly impede or materially delay the completion of the Contemplated Transactions;
(p) the Company will not, and will not cause or permit any of its subsidiaries to, take any action which would render, or which reasonably may be expected to render, any representation or warranty made by the Company in this Agreement untrue or inaccurate in any material respect (disregarding for this purpose all materiality or Material Adverse Effect qualifications contained therein) at any time prior to the Effective Time if then made; and
(q) as is applicable, the Company will not, and will not cause or permit its subsidiaries to, agree, announce, resolve, authorize or commit to do any of the foregoingmatters prohibited by the other subsections of this Section 5.1 or resolve to do so.
Appears in 1 contract
Covenants of the Company Regarding the Conduct of Business. The Company covenants and agrees as to itself and its subsidiary that, during the period from the date of this Agreement until the earlier of the Effective Time and the time that this Agreement is terminated in accordance with its terms, unless except (i) with the Purchaser otherwise consents Purchaser’s consent in writing (to the extent that such consent is permitted by applicable Law)writing, which consent will not be unreasonably withheld, conditioned or delayed, (ii) as expressly required or expressly permitted or specifically contemplated by this Agreement, (iii) as required by applicable Law or any Governmental Authority, or (iv) as set out in the Exeter Company Disclosure Letter or as is otherwise required by applicable LawLetter:
(a) the businesses of the Company and its subsidiaries subsidiary will be conducted only in the ordinary course of business and consistent in all material respects with past practice (including in accordance with the Exeter Budgetits stated budgets, work programs, obligations, commitments and undertakings set out in Section 3.1(y) to the Company and its subsidiaries will comply Disclosure Letter), in accordance with the terms of all Material Contracts applicable Laws and the Company and its subsidiaries will use commercially reasonable efforts to maintain and preserve intact its and their business organizations, assets, properties, rights, goodwill and business relationships with suppliers, partners and other persons with which the Company or its subsidiary has business relations and keep available the services of its the officers, employees and consultants of the Company and its subsidiary as a group;
(b) the Company will cooperate and consult through meetings with the Purchaser, as the Purchaser may reasonably request, to allow the Purchaser to monitor, and provide reasonable input with respect to the direction of, monitor any activities relating to the exploration and maintenance operation of Exeter Properties and discuss with the Purchaser prior to any required public disclosure of exploration results or other technical information provided nothing contained in this Section 4.1(b) shall prevent the Company from publicly disclosing any information required by Law or the rules or policies of the TSX or NYSE MKT after prior notice to the Purchaser and, other than as contemplated by the Exeter Budget, will not make any capital expenditures or other financial commitments in excess of $500,000 or $2,000,000 in the aggregateProperties;
(c) without limiting the generality of Section 4.1(a) above, the Company will not, directly or indirectly:
(i) alter or amend the notice of articles, articles, charter, by-laws or other constating documents of the Company or its subsidiariessubsidiary;
(ii) declare, set aside or pay any dividend on or make any distribution or payment or return of capital in respect of any equity securities of the Company (other than dividends, distributions, payments or return of capital made to the Company);
(iii) split, divide, consolidate, combine or reclassify the Exeter Company Shares or any other securities of the Company or its subsidiariessubsidiary;
(iviii) except in relation to internal transactions solely involving the Company and its subsidiary, issue, sell, grant, sell award, pledge, dispose of or pledge or authorize otherwise encumber or agree to issue, sell, grant, sell award, pledge, dispose of or pledge otherwise encumber any Exeter Company Shares or other securities equity or voting interests or any options, stock appreciation rights, warrants, calls, conversion or exchange privileges or rights of the any kind to acquire (whether on exchange, exercise, conversion or otherwise) any Company or its subsidiaries, or securities convertible into or exchangeable or exercisable for, or otherwise evidencing a right to acquire, Exeter Shares or other equity or voting interests or other securities or any shares of the its subsidiary (including, for greater certainty, Company Options or its subsidiariesany other equity based awards), other than (A) the issuance of Exeter Company Shares issuable pursuant to the exercise of Company Options and Company Warrants that are outstanding as of the date of this Agreement in accordance with their terms, and (B) the issuance of Company Shares pursuant to the terms of Exeter Options outstanding on the date hereofits existing Contracts;
(viv) redeem, purchase or otherwise acquire or subject to any Lien, any of its outstanding Exeter Company Shares or other securities or securities convertible into or exchangeable or exercisable for Exeter Company Shares or any such other securities or any shares or other securities of its subsidiariessubsidiary;
(vi) other than as set out in Section 4.1(c)(vi) of the Exeter Disclosure Letter, amend the terms of any securities of the Company or its subsidiaries;
(vii) adopt a plan of liquidation or resolution providing for the liquidation or dissolution of the Company or its subsidiaries;
(viii) reorganize, amalgamate or merge with any other person and will not cause or permit its subsidiaries to reorganize, amalgamate or merge with any other person;
(ix) create any subsidiary or enter into any Contracts or other arrangements regarding the control or management of the operations, or the appointment of governing bodies or enter into any Joint Ventures;
(x) make any material changes to any of its accounting policies, principles, methods, practices or procedures (including by adopting any material new accounting policies, principles, methods, practices or procedures), except as disclosed in the Public Disclosure Record, as required by applicable Laws or under IFRS; or
(xi) enter into, modify or terminate any Contract with respect to any of the foregoing;
(d) the Company will immediately notify the Purchaser orally and then promptly notify the Purchaser in writing of (i) any “material change” (as defined in the Securities Act) in relation to the Company or its subsidiaries, (ii) any event, circumstance or development that has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, (iii) any breach of this Agreement by the Company, or (iv) any event occurring after the date of this Agreement that would render a representation or warranty, if made on that date or the Effective Time, inaccurate;
(e) except as contemplated in the Exeter Budget, the Company will not, and will not cause or permit its subsidiaries to, directly or indirectly, except in connection with this Agreement:
(i) sell, pledge, lease, licence, dispose of or encumber any assets or properties of the Company or its subsidiaries related to the Material Property;
(ii) acquire (by merger, amalgamation, consolidation, arrangement or acquisition of shares or other equity securities or interests or assets or otherwise) any corporation, partnership, association or other business organization or division thereof or any property or asset, or make any investment by the purchase of securities, contribution of capital, property transfer, or purchase of any property or assets of any other person;
(iii) incur any expenses (except in the ordinary course of business consistent with past practice in the last 12 months, as required to exercise its rights and discharge its obligations under this Agreement, or as contemplated in the Exeter Budget) or incur any indebtedness for borrowed money or issue any debt securities, or assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other person, or make any loans or advances;
(iv) pay, discharge or satisfy any claim, liability or obligation prior to the same being due, other than the payment, discharge or satisfaction, in the ordinary course of business, of liabilities reflected or reserved against in the Financial Statements, or voluntarily waive, release, assign, settle or compromise any Proceeding;
(v) make any investment in or to Chile or any person or property located, domiciled or otherwise incorporated, as applicable, in Chile, including but not limited to, in the form of cash, cash equivalents, loan, purchase of securities, contribution of capital, property transfer or purchase of any property or assets (except in the ordinary course of business consistent with past practice in the last 12 months or as contemplated in the Exeter Budget);
(vi) engage in any new business, enterprise or other activity that is inconsistent with the existing businesses of the Company in the manner such existing businesses generally have been carried on or (as disclosed in the Public Disclosure Record) planned or proposed to be carried on prior to the date of this Agreement;
(vii) except as provided for in the Exeter Budget in respect of any Exeter Property or as are required by applicable Laws to maintain any Permits in good standing, expend or commit to expend any amounts with respect to expenses for such Exeter Property; or
(viii) authorize any of the foregoing, or enter into or modify any Contract to do any of the foregoing;
(f) the Company will not, and will not cause or permit its subsidiaries to, directly or indirectly, except in the ordinary course of business:
(i) terminate, fail to renew, cancel, waive, release, grant or transfer any rights of material value;
(ii) except in connection with matters otherwise permitted under this Section 4.1, enter into any Contract which would be a Material Contract if in existence on the date hereof, or terminate, cancel, extend, renew or amend, modify or change any Material Contract;
(iii) enter into any lease or sublease of real property (whether as a lessor, sublessor, lessee or sublessee), or modify, amend or exercise any right to renew any lease or sublease of real property or acquire any interest in real property; or
(iv) enter into any Contract containing any provision restricting or triggered by the Contemplated Transactions;
(g) Neither the Company nor its subsidiaries will, except in the ordinary course of business or pursuant to any existing Contracts or employment, pension, supplemental pension, termination or compensation arrangements or policies or plans in effect on the date hereof, and except as is necessary to comply with applicable Laws:
(i) grant to any officer, director, employee or consultant of the Company or its subsidiaries an increase in compensation in any form;
(ii) grant any general salary increase, fee or pay any bonus or other material compensation to the directors, officers, employees or consultants of the Company and its subsidiaries;
(iii) except as set out in Section 4.1(g)(iii) of the Exeter Disclosure Letter, take any action with respect to the grant or increase of any severance, change of control, retirement, retention or termination pay;
(iv) enter into or modify any employment or consulting agreement with any officer or director of the Company or its subsidiaries;
(v) terminate the employment or consulting arrangement of any senior management employees (including the Exeter Senior Management), except for cause;
(vi) increase any benefits payable under its current severance or termination pay policies;
(vii) other than as set out in Section 4.1(g)(vii) of the Exeter Disclosure Letter, adopt or amend or make any contribution to or any award under the Stock Option Plan, any restricted share unit plan, deferred share unit plan, performance share unit plan or other bonus, profit sharing, option, pension, retirement, deferred compensation, insurance, incentive compensation, compensation or other similar plan, agreement, trust, fund or arrangement for the benefit of directors or senior officers or former directors or senior officers of the Company or its subsidiaries; or
(viii) take any action to accelerate the time of payment of any compensation or benefits, amend or waive any performance or vesting criteria or accelerate vesting under the Stock Option Plan, except in accordance with its terms as contemplated herein or therein;
(h) neither the Company nor its subsidiaries will make any loan to any officer, director, employee or consultant of the Company or its subsidiaries;
(i) the Company will use its commercially reasonable efforts to cause the current insurance (or re-insurance) policies maintained by the Company, including directors’ and officers’ insurance, not to be cancelled or terminated and to prevent any of the coverage thereunder from lapsing, unless at the time of such termination, cancellation or lapse, replacement policies underwritten by insurance or re-insurance companies of nationally recognized standing having comparable deductions and providing coverage comparable to or greater than the coverage under the cancelled, terminated or lapsed policies for substantially similar premiums are in full force and effect, provided, however, that, except as contemplated by Section 4.8(b), the Company will not obtain or renew any insurance (or re-insurance) policy for a term exceeding 12 months;
(j) the Company will use commercially reasonable efforts to retain the services of its and its subsidiaries’ existing employees and consultants (including the Exeter Senior Management) and will promptly provide written notice to the Purchaser of the resignation or termination of any of its key employees or consultants;
(k) neither the Company nor its subsidiaries will make an application to amend, terminate, allow to expire or lapse or otherwise modify any of its Permits or take any action or fail to take any action which action or failure to act would result in the material loss, expiration or surrender of, or the loss of any material benefit under, or reasonably be expected to cause any Governmental Authority to institute proceedings for the suspension, revocation or limitation of rights under, any material Permit necessary to conduct its businesses as now being conducted;
(l) the Company and each of its subsidiaries will (i) duly and timely file all Returns required to be filed by it on or after the date hereof and all such Returns will be true, complete and correct in all material respects and (ii) timely withhold, collect, remit and pay all Taxes which are to be withheld, collected, remitted or paid by it to the extent due and payable except for any Taxes contested in good faith pursuant to applicable Laws, and the Company will not (A) change its tax accounting methods, principles or practices, except insofar as may have been required by a change in IFRS or applicable Law, (B) settle, compromise or agree to the entry of judgment with respect to any action, claim or other Proceeding relating to Taxes, (other than the payment, discharge or satisfaction of liabilities reflected or reserved against in the Financial Statements) (C) enter into any tax sharing, tax allocation or tax indemnification agreement, (D) make a request for a tax ruling to any Governmental Authority, or (E) agree to any extension or waiver of the limitation period relating to any material Tax claim or assessment or reassessment;
(m) the Company will not, and will not cause or permit its subsidiaries to, settle or compromise any action, claim or other Proceeding (i) brought against it for damages or providing for the grant of injunctive relief or other non-monetary remedy (“Litigation”) or (ii) brought by any present, former or purported holder of its securities in connection with the Contemplated Transactions;
(n) the Company will not, and will not cause or permit its subsidiaries to, commence any Litigation (other than litigation in connection with the collection of accounts receivable, to enforce the terms of this Agreement or the Confidentiality Agreement, to enforce other obligations of the Purchaser or as a result of litigation commenced against the Company);
(o) the Company will not, and will not cause or permit its subsidiaries to, enter into or renew any Contract (i) containing (A) any limitation or restriction on the ability of the Company or its subsidiaries or, following the Effective Time, the ability of the Purchaser or any of its affiliates, to engage in any type of activity or business, (B) any limitation or restriction on the manner in which, or the localities in which, all or any portion of the business of the Company or its subsidiaries or, following the Effective Time, all or any portion of the business of the Purchaser or any of its affiliates, is or would be conducted or (C) any limit or restriction on the ability of the Company or its subsidiaries or, following the Effective Time, the ability of the Purchaser or any of its affiliates, to solicit customers or employees, or (ii) that would reasonably be expected to prevent or significantly impede or materially delay the completion of the Contemplated Transactions;
(p) the Company will not, and will not cause or permit any of its subsidiaries to, take any action which would render, or which reasonably may be expected to render, any representation or warranty made by the Company in this Agreement untrue or inaccurate in any material respect (disregarding for this purpose all materiality or Material Adverse Effect qualifications contained therein) at any time prior to the Effective Time if then made; and
(q) as is applicable, the Company will not, and will not cause or permit its subsidiaries to, agree, announce, resolve, authorize or commit to do any of the foregoing.
Appears in 1 contract
Samples: Arrangement Agreement
Covenants of the Company Regarding the Conduct of Business. (a) The Company covenants and agrees that, subject to Applicable Law, during the period from the date of this Agreement until the earlier of the Effective Time and the time that this Agreement is terminated in accordance with its terms, unless except with the Purchaser otherwise consents in writing (to express prior written consent of the extent that such consent is Parent or as required or permitted by applicable Law), which consent will not be unreasonably withheld, conditioned or delayed, or expressly permitted or specifically contemplated by this Agreement, or as set out the Company shall conduct its business in the Exeter Disclosure Letter or as is otherwise required by applicable Law:
(a) the businesses of the Company and its subsidiaries will be conducted only in the ordinary course of business Ordinary Course and in accordance with Applicable Law.
(b) Without limiting the Exeter Budgetgenerality of Section 7.2(a), subject to Applicable Law, the Company covenants and agrees that, during the period from the date of this Agreement until the earlier of the Effective Time and the time that this Agreement is terminated in accordance with its subsidiaries will comply terms, except with the terms express prior written consent of all Material Contracts the Parent and or as required or permitted by this Agreement, the Company and shall use its subsidiaries will use reasonable commercially reasonable efforts to maintain and preserve intact its the current business organizationsorganization, assets, properties, rights, goodwill properties and business relationships and of the Company, maintain in effect all material Authorizations of the Company, keep available the services of its officers, the present employees and consultants as a group;
(b) agents of the Company will cooperate and consult through meetings maintain good relations with, and the goodwill of, employees, suppliers, customers, creditors and all other Persons having business relationships with the PurchaserCompany and, as the Purchaser may reasonably request, to allow the Purchaser to monitor, and provide reasonable input with respect to the direction of, any activities relating to the exploration and maintenance of Exeter Properties and discuss except with the Purchaser prior to any written consent of the Parent and as required public disclosure of exploration results in connection with the Bridge Loan Financing or other technical information provided nothing contained in this Section 4.1(b) shall prevent the Alpha Investment, the Company from publicly disclosing any information required by Law or the rules or policies of the TSX or NYSE MKT after prior notice to the Purchaser and, other than as contemplated by the Exeter Budget, will not make any capital expenditures or other financial commitments in excess of $500,000 or $2,000,000 in the aggregate;
(c) the Company will shall not, directly or indirectly:
(i) alter or amend the notice of articles, articles, charter, by-laws or other constating documents of the Company or make any change in its subsidiariesOrganizational Documents;
(ii) split, combine, consolidate or reclassify any shares of its capital stock, undertake any capital reorganization or declare, set aside or pay any dividend on or make other distribution (whether in cash, stock or property or any distribution or payment or return of capital in respect of any equity securities of the Company (other than dividends, distributions, payments or return of capital made to the Companycombination thereof);
(iii) splitredeem, dividerepurchase, consolidateor otherwise acquire or offer to redeem, combine repurchase or reclassify otherwise acquire any shares of its capital stock or reduce the Exeter stated capital in respect of the Company Common Shares or any other securities shares of the Company or its subsidiariesCompany;
(iv) issue, grant, sell or deliver, sell, pledge or otherwise encumber, or authorize or agree to issuethe issuance, grant, sell or delivery, sale, pledge any Exeter Shares or other securities encumbrance of any shares of capital stock, securities, options, warrants or similar rights exercisable or exchangeable for or convertible into such capital stock, of the Company or its subsidiariesCompany, or securities convertible into or exchangeable or exercisable for, or otherwise evidencing a right to acquire, Exeter Shares or other securities of the Company or its subsidiaries, other than except for the issuance of Exeter Company Common Shares (A) issuable upon the exercise of the currently outstanding Company Options or (B) pursuant to the terms of Exeter Options outstanding on the date hereofCompany Warrants;
(v) redeemacquire (by merger, purchase consolidation, acquisition of stock or otherwise acquire assets or subject otherwise), directly or indirectly, in one transaction or in a series of related transactions, assets, securities, properties, interests or businesses of any other Person (other than pursuant to any Lien, any of its outstanding Exeter Shares or other securities or securities convertible into or exchangeable or exercisable for Exeter Shares or any such other securities or any shares or other securities of its subsidiariesthe transactions contemplated by this Agreement);
(vi) reorganize, amalgamate, combine or merge the Company with any other Person (other than as set out in Section 4.1(c)(vi) of pursuant to the Exeter Disclosure Letter, amend the terms of any securities of the Company or its subsidiariestransactions contemplated by this Agreement);
(vii) adopt a plan of liquidation or resolution resolutions providing for the liquidation or dissolution of the Company or its subsidiariesCompany;
(viii) reorganizesell, amalgamate pledge, lease, dispose of, surrender, lose the right to use, mortgage, license, encumber (other than Permitted Liens) or merge with otherwise dispose of or transfer any assets of the Company or any interest in any assets of the Company, other person and will not cause or permit its subsidiaries to reorganize, amalgamate or merge with any other personthan in the Ordinary Course;
(ix) create make any subsidiary capital expenditure or enter into any Contracts or similar commitments, other arrangements regarding than in the control or management of the operations, or the appointment of governing bodies or enter into any Joint VenturesOrdinary Course;
(x) make any material changes loan or advance to, or any capital contribution or investment in, or assume, guarantee or otherwise become liable with respect to the liabilities or obligations of, any of its accounting policiesPerson, principles, methods, practices or procedures (including by adopting any material new accounting policies, principles, methods, practices or procedures), except as disclosed other than in the Public Disclosure Record, as required by applicable Laws or under IFRS; orOrdinary Course;
(xi) enter intoprepay any long-term indebtedness before its scheduled maturity or increase, modify create, incur, assume or terminate any Contract otherwise become liable, in one transaction or in a series of related transactions, with respect to any of the foregoing;
(d) the Company will immediately notify the Purchaser orally and then promptly notify the Purchaser in writing of (i) any “material change” (as defined in the Securities Act) in relation to the Company or its subsidiaries, (ii) any event, circumstance or development that has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, (iii) any breach of this Agreement by the Company, or (iv) any event occurring after the date of this Agreement that would render a representation or warranty, if made on that date or the Effective Time, inaccurate;
(e) except as contemplated in the Exeter Budget, the Company will not, and will not cause or permit its subsidiaries to, directly or indirectly, except in connection with this Agreement:
(i) sell, pledge, lease, licence, dispose of or encumber any assets or properties of the Company or its subsidiaries related to the Material Property;
(ii) acquire (by merger, amalgamation, consolidation, arrangement or acquisition of shares or other equity securities or interests or assets or otherwise) any corporation, partnership, association or other business organization or division thereof or any property or asset, or make any investment by the purchase of securities, contribution of capital, property transfer, or purchase of any property or assets of any other person;
(iii) incur any expenses (except in the ordinary course of business consistent with past practice in the last 12 months, as required to exercise its rights and discharge its obligations under this Agreement, or as contemplated in the Exeter Budget) or incur any indebtedness for borrowed money or issue guarantees thereof, other than in the Ordinary Course; provided that any debt securitiesindebtedness created, incurred, refinanced, assumed or assumefor which the Company becomes liable in accordance with the any of the foregoing shall be prepayable at the Effective Time without premium, guarantee, endorse penalty or otherwise as an accommodation become responsible for the obligations of any other person, or make any loans or advancesincremental costs (including breakage costs);
(ivxii) payenter into any interest rate, discharge currency, equity or satisfy commodity swaps, hxxxxx, derivatives, forward sales contracts or similar financial instruments;
(xiii) make any claimbonus or profit sharing distribution or similar payment of any kind;
(xiv) grant any general increase in the rate of wages, liability salaries, bonuses or obligation prior to the same being dueother remuneration of any Company Employees, other than in the Ordinary Course;
(xv) except as required by United States GAAP, make any change in the Company’s methods of accounting;
(xvi) make any material Tax election, information schedule, return or designation, except as required by Applicable Law and in a manner consistent with past practice, settle or compromise any material Tax claim, assessment, reassessment or liability, file any amended Tax Return, enter into any material agreement with a Governmental Authority with respect to Taxes, surrender any right to claim a material Tax abatement, reduction, deduction, exemption, credit or refund, consent to the extension or waiver of the limitation period applicable to any material Tax matter or materially amend or change any of its methods or reporting income, deductions or accounting for income Tax purposes except as may be required by Applicable Law;
(xvii) create, enter into or increase any severance, change of control or termination pay to (or amend any similar existing arrangement with) any Company Employee, director or executive officer of the Company or change the benefits payable under any existing severance or termination pay policies with any Company Employee, director or executive officer of the Company;
(xviii) except as required by Applicable Law: (A) adopt, enter into or amend any Employee Plan (other than entering into an employment agreement in the Ordinary Course with a new Company Employee who was not employed by the Company on the date of this Agreement); (B) pay any benefit to any director or officer of the Company or to any Company Employee that is not required under the terms of any Employee Plan in effect on the date of this Agreement; (C) grant, accelerate, increase or otherwise amend any payment, discharge award or satisfactionother benefit payable to, or for the benefit of, any director or officer of the Company or to any Company Employee; (D) make any material determination under any Employee Plan that is not in the ordinary course Ordinary Course; (E) take or propose any action to effect any of businessthe foregoing; or (F) hire or terminate or promote any employee whose base salary is greater than $75,000;
(xix) cancel, of liabilities reflected or reserved against in the Financial Statements, or voluntarily waive, release, assign, settle or compromise any Proceedingmaterial claims or rights;
(vxx) make any investment in or to Chile or any person or property located, domiciled or otherwise incorporated, as applicable, in Chile, including but not limited to, in the form of cash, cash equivalents, loan, purchase of securities, contribution of capital, property transfer or purchase of any property or assets (except in the ordinary course of business consistent with past practice in the last 12 months or as contemplated in the Exeter Budget);
(vi) engage in any new business, enterprise or other activity that is inconsistent with the existing businesses of the Company in the manner such existing businesses generally have been carried on or (as disclosed in the Public Disclosure Record) planned or proposed to be carried on prior to the date of this Agreement;
(vii) except as provided for in the Exeter Budget in respect of any Exeter Property or as are required by applicable Laws to maintain any Permits in good standing, expend or commit to expend any amounts with respect to expenses for such Exeter Property; or
(viii) authorize any of the foregoing, or enter into or modify any Contract to do any of the foregoing;
(f) the Company will not, and will not cause or permit its subsidiaries to, directly or indirectly, except in the ordinary course of business:
(i) terminate, fail to renew, cancelcommence, waive, release, grant assign, settle or transfer compromise any rights of material valuelitigation, proceedings or governmental investigations;
(iixxi) except in connection with matters otherwise permitted amend, modify, terminate or waive any right under this Section 4.1, any Material Contract or enter into any Contract which or agreement that would be a Material Contract if in existence on the date hereof, or terminate, cancel, extend, renew or amend, modify or change any Material Contract;
(iii) enter into any lease or sublease of real property (whether as a lessor, sublessor, lessee or sublessee), or modify, amend or exercise any right to renew any lease or sublease of real property or acquire any interest in real property; or
(iv) enter into any Contract containing any provision restricting or triggered by the Contemplated Transactions;
(g) Neither the Company nor its subsidiaries will, except in the ordinary course of business or pursuant to any existing Contracts or employment, pension, supplemental pension, termination or compensation arrangements or policies or plans in effect on the date hereof, and except as is necessary to comply with applicable Laws:
(i) grant to any officer, director, employee or consultant of the Company or its subsidiaries an increase in compensation in any form;
(ii) grant any general salary increase, fee or pay any bonus or other material compensation to the directors, officers, employees or consultants of the Company and its subsidiaries;
(iiixxii) except as set out contemplated in Section 4.1(g)(iii) of the Exeter Disclosure Letter, take any action with respect to the grant or increase of any severance, change of control, retirement, retention or termination pay;
(iv) enter into or modify any employment or consulting agreement with any officer or director of the Company or its subsidiaries;
(v) terminate the employment or consulting arrangement of any senior management employees (including the Exeter Senior Management4.1(cc), except for cause;
(vi) increase amend, modify, terminate, cancel or let lapse any benefits payable under its current severance or termination pay policies;
(vii) other than as set out in Section 4.1(g)(vii) of the Exeter Disclosure Letter, adopt or amend or make any contribution to or any award under the Stock Option Plan, any restricted share unit plan, deferred share unit plan, performance share unit plan or other bonus, profit sharing, option, pension, retirement, deferred compensation, insurance, incentive compensation, compensation or other similar plan, agreement, trust, fund or arrangement for the benefit of directors or senior officers or former directors or senior officers of the Company or its subsidiaries; or
(viii) take any action to accelerate the time of payment of any compensation or benefits, amend or waive any performance or vesting criteria or accelerate vesting under the Stock Option Plan, except in accordance with its terms as contemplated herein or therein;
(h) neither the Company nor its subsidiaries will make any loan to any officer, director, employee or consultant of the Company or its subsidiaries;
(i) the Company will use its commercially reasonable efforts to cause the current material insurance (or re-insurance) policies maintained by the Company, including directors’ and officers’ insurance, not to be cancelled or terminated and to prevent any policy of the coverage thereunder from lapsingCompany in effect on the date of this Agreement, unless at the time of simultaneously with such termination, cancellation or lapse, replacement policies underwritten by insurance or and re-insurance companies of nationally recognized standing having comparable deductions and providing coverage comparable equal to or greater than the coverage under the cancelledterminated, terminated cancelled or lapsed policies for substantially similar premiums are in full force and effect, provided, however, that, except as contemplated by Section 4.8(b), the Company will not obtain or renew any insurance (or re-insurance) policy for a term exceeding 12 months;
(jxxiii) the Company will use commercially reasonable efforts to retain the services in respect of its and its subsidiaries’ existing employees and consultants (including the Exeter Senior Management) and will promptly provide written notice to the Purchaser any assets of the resignation Company, waive, release, surrender, let lapse, grant or termination transfer any material right or value or amend, modify or change, or agree to amend, modify or change, in any material respect any existing material Authorization, right to use, lease, contract, production sharing agreement, Intellectual Property (other than the granting of any of its key employees non-exclusive licenses or consultantsother dispositions in the Ordinary Course), or other material document;
(kxxiv) neither the Company nor its subsidiaries will make an abandon or fail to diligently pursue any application to amendfor any material Authorizations, terminatelicenses, allow to expire leases, or lapse or otherwise modify any of its Permits registrations or take any action action, or fail to take any action which action or failure action, that could lead to act would result in the material loss, expiration or surrender of, or the loss termination of any material benefit underAuthorizations, licenses, leases or reasonably be expected to cause any Governmental Authority to institute proceedings for the suspension, revocation or limitation of rights under, any material Permit necessary to conduct its businesses as now being conductedregistrations;
(l) the Company and each of its subsidiaries will (i) duly and timely file all Returns required to be filed by it on or after the date hereof and all such Returns will be true, complete and correct in all material respects and (ii) timely withhold, collect, remit and pay all Taxes which are to be withheld, collected, remitted or paid by it to the extent due and payable except for any Taxes contested in good faith pursuant to applicable Laws, and the Company will not (A) change its tax accounting methods, principles or practices, except insofar as may have been required by a change in IFRS or applicable Law, (B) settle, compromise or agree to the entry of judgment with respect to any action, claim or other Proceeding relating to Taxes, (other than the payment, discharge or satisfaction of liabilities reflected or reserved against in the Financial Statements) (Cxxv) enter into or amend any tax sharingContract with any broker, tax allocation finder or tax indemnification agreement, (D) make a request for a tax ruling to any Governmental Authority, or (E) agree to any extension or waiver of the limitation period relating to any material Tax claim or assessment or reassessmentinvestment banker;
(mxxvi) the Company will not, and will not cause or permit its subsidiaries to, settle or compromise any action, claim or other Proceeding (i) brought against it for damages or providing for the grant of injunctive relief or other non-monetary remedy (“Litigation”) or (ii) brought by any present, former or purported holder of its securities in connection with the Contemplated Transactions;
(n) the Company will not, and will not cause or permit its subsidiaries to, commence any Litigation (other than litigation in connection with the collection of accounts receivable, to enforce the terms of this Agreement or the Confidentiality Agreement, to enforce other obligations of the Purchaser or as a result of litigation commenced against the Company);
(o) the Company will not, and will not cause or permit its subsidiaries to, enter into or renew any Contract (i) containing (A) any limitation or restriction on the ability of the Company or its subsidiaries or, following the Effective Time, the ability of the Purchaser or any of its affiliates, to engage in any type of activity or business, (B) any limitation or restriction on the manner in which, or the localities in which, all or any portion of the business of the Company or its subsidiaries or, following the Effective Time, all or any portion of the business of the Purchaser or any of its affiliates, is or would be conducted or (C) any limit or restriction on the ability of the Company or its subsidiaries or, following the Effective Time, the ability of the Purchaser or any of its affiliates, to solicit customers or employees, or (ii) that would reasonably be expected to prevent or significantly impede or materially delay the completion of the Contemplated Transactions;
(p) the Company will not, and will not cause or permit any of its subsidiaries to, take any action which would render, that is intended or which is reasonably may be expected likely to render, prevent the Transaction from qualifying under Section 351(a) of the Code and the Treasury Regulations promulgated thereunder as a transfer to a controlled corporation or take any representation action that is intended or warranty made by reasonably likely to prevent the Company in this Agreement untrue or inaccurate in any material respect (disregarding for this purpose all materiality or Material Adverse Effect qualifications contained thereinTransaction from qualifying as a tax-deferred reorganization under Section 368(a) at any time prior to of the Effective Time if then madeCode; andor
(qxxvii) as is applicable, the Company will not, and will not cause or permit its subsidiaries toauthorize, agree, announceresolve or otherwise commit, resolvewhether or not in writing, authorize or commit to do any of the foregoing.
Appears in 1 contract
Samples: Tender Offer Support Agreement (AMERI Holdings, Inc.)
