Covenants Relating to Conduct of Business Prior to Merger. 4.1 Conduct of Business of the Company. From the date of this Agreement to the Effective Time (except as otherwise specif- ically required by the terms of this Agreement), the Company shall, and shall cause its subsidiaries to, act and carry on their respective businesses in the usual, regular and ordinary course of business consistent with past practice and, to the extent consistent therewith, use its best efforts to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships with customers, suppliers, licensors, licens- ees, advertisers, distributors and others having business deal- ings with them to the end that their goodwill and ongoing busi- nesses shall not be impaired in any material respect at the Effective Time. Without limiting the generality of the forego- ing, from the date of this Agreement to the Effective Time, the Company shall not, and shall not permit any of its subsidiaries to, without the prior consent of the Parent: (a) (i) declare, set aside or pay any dividends on, or make any other distributions in respect of, any of its capital stock, other than dividends and distributions by a direct or indirect wholly owned subsidiary of the Company to its parent and the declaration and payment by the Company of regular quarterly cash dividends in an amount not in excess of $.16 per share of Company Common Stock, with usual record and payment dates for such dividends in accordance with the Company's past dividend practices, (ii) split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, or (iii) purchase, redeem or otherwise acquire any shares of capital stock of the Company or any of its subsidiaries or any other securities thereof or any rights, warrants or options to acquire any such shares or other securities, except, in the case of clause (iii), for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder or tax liability arising in connec- tion therewith, upon exercise of Company Stock Options outstanding on the date of this Agreement in accordance with their present terms; (b) authorize for issuance, issue, deliver, sell, pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its subsidiaries, any other voting securities or any securities convertible into, or any rights, warrants or options to acquire, any such shares, voting securities or convertible securities or any other securities or equity equivalents (including without limita- tion stock appreciation rights), or contractual obligation valued or measured by the value or market price of Company Common Stock (other than the issuance of Company Common Stock upon the exercise of Company Stock Options outstanding on the date of this Agreement and in accordance with their present terms, such issuance, together with the acquisitions of shares of Company Common Stock permitted under clause (a) above, being referred to herein as "Permitted Changes"); (c) amend its certificate of incorporation, by-laws or other comparable charter or organizational documents; (d) acquire or agree to acquire by merging or consol- idating with, or by purchasing a substantial portion of the stock or assets of, or by any other manner, any business or any corporation, partnership, joint venture, association, or other business organization or division thereof; (e) sell, lease, license, mortgage or otherwise encumber or subject to any Lien or otherwise dispose of any of its properties or assets that are material, individually or in the aggregate, to the Company and its subsidiaries taken as a whole, except sales of inventory and equipment in the ordinary course of business consistent with past prac- xxxx; (f) (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its subsidiaries, guarantee any debt securities of another person, enter into any "keep well" or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing, except for short-term borrowings incurred in the ordinary course of business consistent with past practice, or (ii) make any loans, advances or capital contributions to, or investments in, any other person, other than to the Company or any direct or indirect wholly owned subsidiary of the Company; (g) acquire or agree to acquire any assets that are material, individually or in the aggregate, to the Company and its subsidiaries taken as a whole, or make or agree to make any capital expenditures except in the ordinary course of business consistent with past practice; (h) pay, discharge or satisfy any claims (including claims of stockholders), liabilities or obligations (abso- lute, accrued, asserted or unasserted, contingent or other- wise), except for the payment, discharge or satisfaction, of (i) liabilities or obligations in the ordinary course of business consistent with past practice or in accordance with their terms as in effect on the date hereof, (ii) liabili- ties reflected or reserved against in, or contemplated by, the most recent consolidated audited financial statements (or the notes thereof) of the Company included in the Recent SEC Documents, or waive, release, grant, or transfer any rights of material value or modify or change in any material respect any existing license, lease, contract or other document, other than in the ordinary course of business consistent with past practice; (i) adopt or amend in any material respect (except as may be required by law or by this Agreement) any bonus, profit sharing, compensation, stock option, pension, retire- ment, deferred compensation, employment or other employee benefit plan, agreement, trust, fund or other arrangement (including any Company Benefit Plan) for the benefit or welfare of any employee, director or former director or employee or, other than increases for individuals (other than officers and directors) in the ordinary course of business consistent with past practice, increase the compen- sation or fringe benefits of any director, employee or former director or employee; pay any benefit not required by any existing plan, arrangement or agreement, grant any new or modified severance or termination arrangement or increase or accelerate any benefits payable under its severance or termination pay policies in effect on the date hereof, other than any such increase or acceleration provided for under such policies as in effect on the date of this Agreement; (j) change any material accounting principle used by it, except for such changes as may be required to be implemented following the date of this Agreement pursuant to generally accepted accounting principles or rules and regu- lations of the SEC promulgated following the date hereof; (k) take any action that would, or is reasonably likely to, result in any of its representations and warran- ties in this Agreement becoming untrue, or in any of the conditions to the Merger set forth in Article 6 not being satisfied; (l) except in the ordinary course of business and consistent with past practice, make any tax election or settle or compromise any federal, state, local or foreign income tax liability; and (m) authorize any of, or commit or agree to take any of, the foregoing actions.
Appears in 1 contract
Covenants Relating to Conduct of Business Prior to Merger. 4.1 SECTION 4.01 Conduct of Business of the Company.
(a) Conduct of Business by the Company. From During the period from the date of this Agreement to the Effective Time of the Merger (except as otherwise specif- ically specifically required by the terms of this Agreement), the Company shall, and shall cause its subsidiaries to, act and carry on their respective businesses in the usual, regular and ordinary course of business consistent with past practice and, to the extent consistent therewith, use its reasonable best efforts to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships with customers, suppliers, licensors, licens- eeslicensees, advertisers, distributors and others having business deal- ings dealings with them to the end that their goodwill and ongoing busi- nesses businesses shall not be impaired in any material respect materially unimpaired at the Effective TimeTime of the Merger. Without limiting the generality of the forego- ingforegoing, during the period from the date of this Agreement to the Effective TimeTime of the Merger, the Company shall not, and shall not permit any of its subsidiaries to, without the prior written consent of the Parent (which consent will not be unreasonably withheld and shall be deemed granted if not denied within 48 hours after written notice to Parent:):
(ai) (ix) declare, set aside or pay any dividends on, or make any other distributions in respect of, any of its capital stock, other than dividends and distributions paid by Designer Preferred Trust on its 6% Convertible Trust Originated Preferred Securities in accordance with the terms of such securities, by a direct or indirect wholly owned subsidiary of the Company to its parent and the declaration and payment by the Company of regular quarterly cash dividends in an amount not in excess of $.16 per share of Company Common Stock, with usual record and payment dates for such dividends in accordance with the Company's past dividend practicesparent, (iiy) split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, or (iiiz) purchase, redeem or otherwise acquire any shares of capital stock of the Company or any of its subsidiaries or any other securities thereof or any rights, warrants or options to acquire any such shares or other securities, except, in the case of clause (iii), for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder or tax liability arising in connec- tion therewith, upon exercise of Company Stock Options outstanding on the date of this Agreement in accordance with their present terms;
(bii) authorize for issuance, issue, deliver, sell, transfer, pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its subsidiaries, any other voting securities or any securities convertible intointo or exercisable or exchangeable for, or any rights, warrants warrants, calls, commitments or options to acquire, any such shares, voting securities or convertible securities or any other securities or equity equivalents (including without limita- tion stock appreciation rights), or contractual obligation valued or measured by the value or market price of Company Common Stock ) (other than the issuance of Company Common Stock upon the exercise of options to purchase shares of Company Common Stock Options outstanding on the date of this Agreement and in accordance with their present terms, such issuance, together with the acquisitions of shares of Company Common Stock permitted under clause (a) above, being referred to herein as "Permitted Changes");
(c) ; amend its certificate of incorporation, by-laws or other comparable charter or organizational documents;
(d) acquire or agree to acquire by merging or consol- idating with, or by purchasing a substantial portion of the stock or assets of, or by any other manner, any business or any corporation, partnership, joint venture, association, or other business organization or division thereof;
(e) sell, lease, license, mortgage or otherwise encumber or subject to any Lien or otherwise dispose of any of its properties or assets that are material, individually or in the aggregate, to the Company and its subsidiaries taken as a whole, except sales of inventory and equipment in the ordinary course of business consistent with past prac- xxxx;
(f) (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its subsidiaries, guarantee any debt securities of another person, enter into any "keep well" or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing, except for short-term borrowings incurred in the ordinary course of business consistent with past practice, or (ii) make any loans, advances or capital contributions to, or investments in, any other person, other than to the Company or any direct or indirect wholly owned subsidiary of the Company;
(g) acquire or agree to acquire any assets that are material, individually or in the aggregate, to the Company and its subsidiaries taken as a whole, or make or agree to make any capital expenditures except in the ordinary course of business consistent with past practice;
(h) pay, discharge or satisfy any claims (including claims of stockholders), liabilities or obligations (abso- lute, accrued, asserted or unasserted, contingent or other- wise), except for the payment, discharge or satisfaction, of (i) liabilities or obligations in the ordinary course of business consistent with past practice or in accordance with their terms as in effect on the date hereof, (ii) liabili- ties reflected or reserved against in, or contemplated by, the most recent consolidated audited financial statements (or the notes thereof) of the Company included in the Recent SEC Documents, or waive, release, grant, or transfer any rights of material value or modify or change in any material respect any existing license, lease, contract or other document, other than in the ordinary course of business consistent with past practice;
(i) adopt or amend in any material respect (except as may be required by law or by this Agreement) any bonus, profit sharing, compensation, stock option, pension, retire- ment, deferred compensation, employment or other employee benefit plan, agreement, trust, fund or other arrangement (including any Company Benefit Plan) for the benefit or welfare of any employee, director or former director or employee or, other than increases for individuals (other than officers and directors) in the ordinary course of business consistent with past practice, increase the compen- sation or fringe benefits of any director, employee or former director or employee; pay any benefit not required by any existing plan, arrangement or agreement, grant any new or modified severance or termination arrangement or increase or accelerate any benefits payable under its severance or termination pay policies in effect on the date hereof, other than any such increase or acceleration provided for under such policies as in effect on the date of this Agreement;
(j) change any material accounting principle used by it, except for such changes as may be required to be implemented following the date of this Agreement pursuant to generally accepted accounting principles or rules and regu- lations of the SEC promulgated following the date hereof;
(k) take any action that would, or is reasonably likely to, result in any of its representations and warran- ties in this Agreement becoming untrue, or in any of the conditions to the Merger set forth in Article 6 not being satisfied;
(l) except in the ordinary course of business and consistent with past practice, make any tax election or settle or compromise any federal, state, local or foreign income tax liability; and
(m) authorize any of, or commit or agree to take any of, the foregoing actions.
Appears in 1 contract
Samples: Merger Agreement (Charterhouse Equity Partners Ii Lp)
Covenants Relating to Conduct of Business Prior to Merger. 4.1 Conduct of Business of the Company. From the date of this Agreement ---------------------------------- to the Effective Time (except as otherwise specif- ically specifically required by the terms of this Agreement), the Company shall, and shall cause its subsidiaries to, act and carry on their respective businesses in the usual, regular and ordinary course of business consistent with past practice and, to the extent consistent therewith, use its best efforts to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships with customers, suppliers, licensors, licens- eeslicensees, advertisers, distributors and others having business deal- ings dealings with them to the end that their goodwill and ongoing busi- nesses businesses shall not be impaired in any material respect at the Effective Time. Without limiting the generality of the forego- ingforegoing, from the date of this Agreement to the Effective Time, the Company shall not, and shall not permit any of its subsidiaries to, without the prior consent of the Parent:
(a) (i) declare, set aside or pay any dividends on, or make any other distributions in respect of, any of its capital stock, other than dividends and distributions by a direct or indirect wholly owned subsidiary of the Company to its parent and the declaration and payment by the Company of regular quarterly cash dividends in an amount not in excess of $.16 per share of Company Common Stock, with usual record and payment dates for such dividends in accordance with the Company's past dividend practices, (ii) split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, or (iii) purchase, redeem or otherwise acquire any shares of capital stock of the Company or any of its subsidiaries or any other securities thereof or any rights, warrants or options to acquire any such shares or other securities, except, in the case of clause (iii), for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder or tax liability arising in connec- tion connection therewith, upon exercise of Company Stock Options outstanding on the date of this Agreement in accordance with their present terms;
(b) authorize for issuance, issue, deliver, sell, pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its subsidiaries, any other voting securities or any securities convertible into, or any rights, warrants or options to acquire, any such shares, voting securities or convertible securities or any other securities or equity equivalents (including without limita- tion limitation stock appreciation rights), or contractual obligation valued or measured by the value or market price of Company Common Stock (other than the issuance of Company Common Stock upon the exercise of Company Stock Options outstanding on the date of this Agreement and in accordance with their present terms, such issuance, together with the acquisitions of shares of Company Common Stock permitted under clause (a) above, being referred to herein as "Permitted Changes");
(c) amend its certificate of incorporation, by-laws or other comparable charter or organizational documents;
(d) acquire or agree to acquire by merging or consol- idating consolidating with, or by purchasing a substantial portion of the stock or assets of, or by any other manner, any business or any corporation, partnership, joint venture, association, or other business organization or division thereof;
(e) sell, lease, license, mortgage or otherwise encumber or subject to any Lien or otherwise dispose of any of its properties or assets that are material, individually or in the aggregate, to the Company and its subsidiaries taken as a whole, except sales of inventory and equipment in the ordinary course of business consistent with past prac- xxxxpractice;
(f) (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its subsidiaries, guarantee any debt securities of another person, enter into any "keep well" or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing, except for short-term borrowings incurred in the ordinary course of business consistent with past practice, or (ii) make any loans, advances or capital contributions to, or investments in, any other person, other than to the Company or any direct or indirect wholly owned subsidiary of the Company;
(g) acquire or agree to acquire any assets that are material, individually or in the aggregate, to the Company and its subsidiaries taken as a whole, or make or agree to make any capital expenditures except in the ordinary course of business consistent with past practice;
(h) pay, discharge or satisfy any claims (including claims of stockholders), liabilities or obligations (abso- luteabsolute, accrued, asserted or unasserted, contingent or other- wiseotherwise), except for the payment, discharge or satisfaction, of (i) liabilities or obligations in the ordinary course of business consistent with past practice or in accordance with their terms as in effect on the date hereof, (ii) liabili- ties liabilities reflected or reserved against in, or contemplated by, the most recent consolidated audited financial statements (or the notes thereof) of the Company included in the Recent SEC Documents, or waive, release, grant, or transfer any rights of material value or modify or change in any material respect any existing license, lease, contract or other document, other than in the ordinary course of business consistent with past practice;
(i) adopt or amend in any material respect (except as may be required by law or by this Agreement) any bonus, profit sharing, compensation, stock option, pension, retire- mentretirement, deferred compensation, employment or other employee benefit plan, agreement, trust, fund or other arrangement (including any Company Benefit Plan) for the benefit or welfare of any employee, director or former director or employee or, other than increases for individuals (other than officers and directors) in the ordinary course of business consistent with past practice, increase the compen- sation compensation or fringe benefits of any director, employee or former director or employee; pay any benefit not required by any existing plan, arrangement or agreement, grant any new or modified severance or termination arrangement or increase or accelerate any benefits payable under its severance or termination pay policies in effect on the date hereof, other than any such increase or acceleration provided for under such policies as in effect on the date of this Agreement;
(j) change any material accounting principle used by it, except for such changes as may be required to be implemented following the date of this Agreement pursuant to generally accepted accounting principles or rules and regu- lations regulations of the SEC promulgated following the date hereof;
(k) take any action that would, or is reasonably likely to, result in any of its representations and warran- ties warranties in this Agreement becoming untrue, or in any of the conditions to the Merger set forth in Article 6 not being satisfied;
(l) except in the ordinary course of business and consistent with past practice, make any tax election or settle or compromise any federal, state, local or foreign income tax liability; and
(m) authorize any of, or commit or agree to take any of, the foregoing actions.
Appears in 1 contract
Covenants Relating to Conduct of Business Prior to Merger. 4.1 SECTION 5.1 Conduct of Business of by the Company. From Except as contemplated by this Agreement or as set forth in Section 5.1 of the Disclosure Schedule, during the period from the date of this Agreement to the Effective Time (except as otherwise specif- ically required by the terms of this Agreement)Time, the Company shall, and shall cause its subsidiaries Subsidiaries to, act and carry on their respective businesses in the usual, regular and ordinary course of business consistent with past practice and, to the extent consistent therewith, use its reasonable best efforts to preserve intact their current business organizations, keep in full force and effect their insurance licenses, permits and franchises, keep available the services of their current officers key officers, employees, agents, and employees field representatives, and preserve their the goodwill of regulators, policyholders or those engaged in material business relationships with customersthem. In addition, suppliers, licensors, licens- ees, advertisers, distributors and others having business deal- ings with them the Company agrees to allow representatives of Acquiror to have access to the end management and other personnel of the Company and its Subsidiaries so that Acquiror can be fully informed at all times as to significant executive, legal, financial, investment, marketing and other operational matters involving the Company, its Subsidiaries and their goodwill and ongoing busi- nesses shall not be impaired in any material respect at the Effective Timebusinesses. Without limiting the generality of the forego- ingforegoing, during the period from the date of this Agreement to the Effective Time, the Company shall not, and shall not permit any of its subsidiaries the Subsidiaries to, without the prior consent of the ParentAcquiror:
(ai) adopt or propose any change to its Certificate of Incorporation or By-Laws;
(ii) (ix) declare, set aside or pay any dividends on, or make any other distributions in with respect ofto, any of the Company's or its Subsidiaries' outstanding capital stock, other than dividends and distributions by a direct or indirect wholly owned subsidiary of the Company to its parent and the declaration and payment by the Company of regular quarterly cash dividends by the Company and such Subsidiaries, and, in an amount the case of the Company's regular quarterly cash dividends not in excess of $.16 .27 per share of Company Common StockShare so long as the Common Shares remain outstanding, in accordance with usual record and 28 payment dates for such dividends and in accordance with the Company's past present dividend practicespolicy, (iiy) split, combine or reclassify any of its outstanding capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its outstanding capital stock, stock or (iiiz) purchase, redeem or otherwise acquire any shares of capital stock or other securities of, or other ownership interests of the Company or any of its subsidiaries or any other securities thereof or any rights, warrants or options than the Employee Options and Restricted Stock to acquire any such shares or other securities, except, in the case of clause (iii), for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable be purchased as contemplated by such holder or tax liability arising in connec- tion therewith, upon exercise of Company Stock Options outstanding on the date of this Agreement in accordance with their present termsSection 1.11 above;
(biii) authorize for issuance, issue, deliversell, sellgrant, pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its subsidiariesstock, any other voting securities or any securities convertible into, or any rights, warrants or options to acquire, any such shares, voting securities or convertible securities or any other securities or equity equivalents (including without limita- tion stock appreciation rights), or contractual obligation valued or measured by the value or market price of Company Common Stock (other than the issuance of Company Common Stock upon the exercise of Company Stock Employee Options outstanding on the date of this Agreement and in accordance with their present terms, such issuance, together with or the acquisitions issuance of shares of Company Common Stock permitted under clause (a) above, being referred to herein as "Permitted Changes")the Company's dividend reinvestment plan or issue or make any awards under any phantom stock plan;
(civ) amend its certificate acquire, form or commence the operations of incorporation, by-laws or other comparable charter or organizational documents;
(d) acquire or agree to acquire by merging or consol- idating with, or by purchasing a substantial portion of the stock or assets of, or by any other manner, any business or any corporation, partnership, joint venture, association, association or other business organization or division or block of in-force business thereof;
(ev) take any action that, if taken prior to the date of this Agreement, would have been required to be disclosed in Section 2.6 of the Disclosure Schedule or that would otherwise cause any of the representations and warranties contained in Article 2 not to be true and correct in all material respects;
(vi) sell, lease, license, mortgage or otherwise encumber or subject to any Lien lien or otherwise dispose of any of its properties or assets that are material, individually or in the aggregate, material to the Company and its subsidiaries the Significant Subsidiaries taken as a whole, except sales for the sale of inventory and equipment in the ordinary course of business consistent with past prac- xxxx;
(f) (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its subsidiaries, guarantee any debt securities of another person, enter into any "keep well" or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing, except for short-term borrowings incurred in the ordinary course of business consistent with past practice, or (ii) make any loans, advances or capital contributions to, or investments in, any other person, other than to the Company or any direct or indirect wholly owned subsidiary of the Company;
(g) acquire or agree to acquire any assets that are material, individually or in the aggregate, to the Company and its subsidiaries taken as a whole, or make or agree to make any capital expenditures except in the ordinary course of business consistent with past practice;
(hvii) (x) except for the dollar amount required to cancel and cash out the Employee Options and the Restricted Stock as contemplated by Section 1.11 above, incur any indebtedness for borrowed money (other than short-term indebtedness for general corporate purposes not to exceed $5,000,000 at any time) or guarantee any such indebtedness of another person, other than indebtedness owing to or guarantees of indebtedness owing to the Company or any direct or indirect wholly-owned Subsidiary of the Company or (y) make any loans or advances to any other person, other than to the Company, or to any direct or indirect wholly- owned Subsidiary of the Company and other than routine advances in the ordinary course of business to employees or agents, or policyholder loans;
(viii) make any tax election or settle or compromise any income tax liability that would reasonably be expected to be material to the Company and the Significant Subsidiaries taken as a whole;
(ix) pay, discharge discharge, settle or satisfy any claims (including claims of stockholders)claims, liabilities or obligations (abso- luteabsolute, accrued, asserted or unasserted, contingent or other- wiseotherwise), except for other than the payment, discharge or satisfaction, of (i) liabilities or obligations in the ordinary course of business consistent with past practice or in 29 accordance with their terms as in effect on the date hereof, (ii) liabili- ties of liabilities reflected or reserved against in, or contemplated by, the most recent consolidated audited financial statements (or the notes thereofthereto) of the Company included in the Recent Filed SEC Documents, Documents or waive, release, grant, or transfer any rights incurred since the date of material value or modify or change in any material respect any existing license, lease, contract or other document, other than such financial statements in the ordinary course of business consistent with past practice;
(ix) adopt or amend in any material respect (except as may be required by law or by this Agreement) any bonus, profit sharing, compensation, stock option, pension, retire- ment, deferred compensation, employment or other employee benefit plan, agreement, trust, fund or other arrangement (including any Company Benefit Plan) for the benefit or welfare of any employee, director or former director or employee or, other than increases for individuals (other than officers and directors) in the ordinary course of business consistent with past practicebusiness, increase the compen- sation modify, amend or fringe benefits of terminate, or waive, release or assign any director, employee material rights or former director claims under or employee; pay enter into or obtain any benefit not required by any existing plan, arrangement or material agreement, grant permit, concession, franchise, license or similar instrument to which the Company or any new or modified severance or termination arrangement or increase or accelerate any benefits payable under its severance or termination pay policies in effect on the date hereofSignificant Subsidiary is a party, other than any such increase those contracts, agreements or acceleration provided for under such policies as licenses modified, amended or terminated in effect on accordance with the date terms of this Agreementthe Reinsurance Agreement between WNIC and Trustmark;
(jxi) change invest its future cash flow, any material accounting principle used cash from matured and maturing investments, any cash proceeds from the sale of its assets and properties, and any cash funds currently held by it, in any investments other than cash equivalent assets or in short-term investments (consisting of United States government issued or guaranteed securities, or commercial paper rated A-1 or P-1), except for such changes (i) as may be otherwise required by law, (ii) as required to be implemented following the date of this Agreement pursuant to generally accepted accounting principles or rules and regu- lations of the SEC promulgated following the date hereof;
provide cash (k) take any action that would, or is reasonably likely to, result in any of its representations and warran- ties in this Agreement becoming untrue, or in any of the conditions to the Merger set forth in Article 6 not being satisfied;
(l) except in the ordinary course of business and consistent with past practice, ) to meet its actual or anticipated obligations or (iii) publicly- traded corporate bonds that are rated investment grade by at least two nationally recognized statistical rating organizations;
(xii) except as may be required by law,
(i) make any tax election representation or settle promise, oral or compromise written, to any federalemployee or former director, state, local officer or foreign income tax liability; andemployee of the Company or any Subsidiary which is inconsistent with the terms of any Benefit Plan;
(mii) make any change to, or amend in any way, the contracts, salaries, wages, or other compensation of any employee or any agent or consultant of the Company or any Subsidiary other than (a) changes or amendments that are required under existing contracts, (b) changes after January 1, 1998 with respect to employees whose current annual salary is less than $50,000 that are made in the ordinary course of business and consistent with past practice and that do not exceed 5% for any such employee, or (c) changes with respect to agents or consultants that are made in the ordinary course of business and consistent with past practice; or
(iii) adopt, enter into, amend, alter or terminate, partially or completely, any Benefit Plan or any election made pursuant to the provisions of any Benefit Plan, to accelerate any payments, obligations or vesting schedules under any Benefit Plan;
(xiii) fail to pay any Taxes or file any Tax Return on a timely basis or fail to make any estimated payment of Taxes on a timely basis;
(xiv) lease or purchase any property, except for such leases or purchases of property that do not in the aggregate exceed $50,000, or enter into any transitional services agreement; or
(xv) authorize any of, or commit or agree to take any of, of the foregoing actions.
Appears in 1 contract
Covenants Relating to Conduct of Business Prior to Merger. 4.1 SECTION 4.01 Conduct of Business of the Company.
(a) Conduct of Business by the Company. From During the period from the date of this Agreement to the Effective Time of the Merger (except as otherwise specif- ically specifically required by the terms of this Agreement), the Company shall, and shall cause its subsidiaries to, act and carry on their respective businesses in the usual, regular and ordinary course of business consistent with past practice and, to the extent consistent therewith, use its reasonable best efforts to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships with customers, suppliers, licensors, licens- eeslicensees, advertisers, distributors and others having business deal- ings dealings with them to the end that their goodwill and ongoing busi- nesses businesses shall not be impaired in any material respect materially unimpaired at the Effective TimeTime of the Merger. Without limiting the generality of the forego- ingforegoing, during the period from the date of this Agreement to the Effective TimeTime of the Merger, the Company shall not, and shall not permit any of its subsidiaries to, without the prior written consent of the Parent (which consent will not be unreasonably withheld and shall be deemed granted if not denied within 48 hours after written notice to Parent:):
(ai) (ix) declare, set aside or pay any dividends on, or make any other distributions in respect of, any of its capital stock, other than dividends and distributions paid by Designer Preferred Trust on its 6% Convertible Trust Originated Preferred Securities in accordance with the terms of such securities, by a direct or indirect wholly owned subsidiary of the Company to its parent and the declaration and payment by the Company of regular quarterly cash dividends in an amount not in excess of $.16 per share of Company Common Stock, with usual record and payment dates for such dividends in accordance with the Company's past dividend practicesparent, (iiy) split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, or (iiiz) purchase, redeem or otherwise acquire any shares of capital stock of the Company or any of its subsidiaries or any other securities thereof or any rights, warrants or options to acquire any such shares or other securities, except, in the case of clause (iii), for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder or tax liability arising in connec- tion therewith, upon exercise of Company Stock Options outstanding on the date of this Agreement in accordance with their present terms;
(bii) authorize for issuance, issue, deliver, sell, transfer, pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its subsidiaries, any other voting securities or any securities convertible intointo or exercisable or exchangeable for, or any rights, warrants warrants, calls, commitments or options to acquire, any such shares, voting securities or convertible securities or any other securities or equity equivalents (including without limita- tion stock appreciation rights), or contractual obligation valued or measured by the value or market price of Company Common Stock ) (other than the issuance of Company Common Stock upon the exercise of options to purchase shares of Company Common Stock Options outstanding on the date of this Agreement and in accordance with their present terms, such issuance, together with the acquisitions of shares of Company Common Stock permitted under clause (a) above, being referred to herein as "Permitted Changes");
(ciii) amend its certificate of incorporation, by-laws or other comparable charter or organizational documents;
(div) acquire or agree to acquire by merging or consol- idating consolidating with, or by purchasing a substantial portion of the stock or assets of, or by any other manner, any business or any corporation, partnership, joint venture, association, association or other business organization or division thereof;
(ev) sell, lease, license, mortgage or otherwise encumber or subject to any Lien or otherwise dispose of any of of, close or shut down its properties or assets that are materialassets, individually or in the aggregate, to the Company and its subsidiaries taken as a whole, except other than reasonable sales of inventory and equipment in the ordinary course of business consistent and assets having an aggregate value not in excess of $250,000, except that the foregoing shall not preclude the Company from entering into a sublease on commercially reasonable terms with past prac- xxxxrespect to its distribution centers in North Arlington and Secaucus, New Jersey and the second floor of 0000 Xxxxxxxx in New York City;
(fvi) (ix) incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its subsidiaries, guarantee any debt securities of another person, enter into any "keep well" or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing, except for short-term borrowings incurred in the ordinary course of business consistent with past practice, (y) amend the terms of any outstanding security in a manner that would increase its obligations thereunder or (iiz) make any loans, advances or capital contributions to, or investments in, any other person, other than to the Company or any direct or indirect wholly owned subsidiary of the Company;
(gvii) acquire or agree to acquire any assets that are material(other than inventory not in excess of 105% of the monthly cumulative budget set forth on Schedule 4.01(vii)) the value of which, individually or in the aggregate, to the Company and its subsidiaries taken as a wholeexceeds $250,000, or make or agree to make any capital expenditures except in the ordinary course of business consistent with past practiceother than those set forth on Schedule 4.01(vii);
(hviii) pay, discharge or satisfy any claims (including claims of stockholders)claims, liabilities or obligations (abso- luteabsolute, accrued, asserted or unasserted, contingent or other- wiseotherwise), except for the payment, discharge or satisfaction, (x) of (i) liabilities or obligations in the ordinary course of business consistent with past practice or in accordance with their terms as in effect on the date hereofpractice, (iiy) liabili- ties liabilities reflected or reserved against in, or contemplated by, the most recent consolidated audited financial statements (or the notes thereofthereto) of the Company included in the Recent SEC DocumentsDocuments or (z) other claims, liabilities or obligations in the aggregate in an amount (or having a value in an amount) not in excess of $1,000,000, or waive, release, grant, or transfer any rights of material value or modify or change in any material respect any existing license, lease, contract or other document in any manner that would be material to the Company or enter into any new outlet lease or license, or any other material lease, contract or other document, other than in the ordinary course of business consistent with past practice;
(iix) adopt a plan of complete or amend in any material respect (except as may be required by law partial liquidation or by this Agreement) any bonusresolutions providing for or authorizing such a liquidation or a dissolution, profit sharingmerger, compensationconsolidation, stock optionrestructuring, pension, retire- ment, deferred compensation, employment recapitalization or other employee benefit plan, agreement, trust, fund or other arrangement (including any Company Benefit Plan) for the benefit or welfare of any employee, director or former director or employee or, other than increases for individuals (other than officers and directors) in the ordinary course of business consistent with past practice, increase the compen- sation or fringe benefits of any director, employee or former director or employee; pay any benefit not required by any existing plan, arrangement or agreement, grant any new or modified severance or termination arrangement or increase or accelerate any benefits payable under its severance or termination pay policies in effect on the date hereof, other than any such increase or acceleration provided for under such policies as in effect on the date of this Agreementreorganization;
(jx) enter into any new collective bargaining agreement or any successor collective bargaining agreement to any collective bargaining agreement or amend any existing collective bargaining agreement disclosed in Section 3.01(h)(ii) of the Disclosure Schedule;
(xi) change any material accounting principle used by it, except for such changes as may be required to be implemented following the date of this Agreement pursuant to generally accepted accounting principles or rules and regu- lations regulations of the SEC promulgated following the date hereof;
(kxii) take any action that would, or is reasonably likely to, result in any of its representations and warran- ties in this Agreement becoming untrue, or in any of the conditions to the Merger set forth in Article 6 not being satisfied;
(l) except in the ordinary course of business and consistent with past practice, make any tax election or settle or compromise any federallitigation (whether or not commenced prior to the date of this Agreement), stateother than litigation not in excess of amounts reserved for in the most recent consolidated financial statements of the Company included in the Recent SEC Documents or, local or foreign income tax liability; andif not so reserved for, in an aggregate amount not in excess of $250,000 (provided in either case such settlement documents do not involve any material non-monetary obligations on the part of the Company);
(mxiii) close, shut down or otherwise eliminate any of its facilities;
(xiv) enter into (or commit to enter into) any new lease or amend or renew any existing lease or purchase or acquire or enter into any agreement to purchase or acquire any real estate or terminate any existing lease other than leases for machinery or equipment requiring an aggregate annual commitment not in excess of $100,000;
(xv) change any Tax election, change any annual Tax accounting period, change any method of Tax accounting, file any amended Tax return, enter into any closing agreement relating to any material Tax, settle any material Tax claim or assessment, surrender any right to claim a Tax refund or consent to any extension or waiver of the limitations period applicable to any Tax claim or assessment, if such acts, either separately or in the aggregate, would have the effect of materially increasing the Tax liability of or materially reducing the Tax assets of the Company or any of its subsidiaries or of Parent or any of its subsidiaries;
(xvi) except as contemplated by Section 5.14, change the composition, fill any vacancies or increase the size of the Company's Board of Directors; or
(xvii) authorize any of, or commit or agree to take any of, the foregoing actions.
Appears in 1 contract
Covenants Relating to Conduct of Business Prior to Merger. 4.1 5.1 Conduct of Business of the Company. From Except as set forth in the Disclosure Schedule, during the period from the date of this Agreement to the Effective Time (except as otherwise specif- ically specifically required by the terms of this Agreement), the Company shall, and shall cause its subsidiaries to, act and carry on their respective businesses in the usual, regular and ordinary course of business consistent with past practice and, to the extent consistent therewith, and use its and their respective reasonable best efforts to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships with customers, suppliers, licensors, licens- eeslicensees, advertisers, distributors and others having business deal- ings dealings with them and to the end that their goodwill and ongoing busi- nesses shall not be impaired in any material respect at the Effective Timepreserve goodwill. Without limiting the generality of the forego- ingforegoing, except as set forth in the Disclosure Schedule or otherwise contemplated by this Agreement, during the period from the date of this Agreement to the Effective Time, the Company shall not, and shall not permit any of its subsidiaries to, without the prior consent of the ParentTHL I, which shall not be unreasonably withheld:
(a) (i) declare, set aside or pay any dividends on, or make any other distributions in respect of, any of its capital stock, other than dividends and distributions by a direct or indirect wholly owned subsidiary of the Company to its parent and the declaration and payment by the Company of regular quarterly cash dividends in an amount not in excess of $.16 per share of Company Common Stock, with usual record and payment dates for such dividends in accordance with the Company's past dividend practices, parent;
(iib) split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, or stock (iiiexcept pursuant to the Company's Rights Agreement);
(c) purchase, redeem or otherwise acquire any shares of capital stock of the Company or any of its subsidiaries or any other securities thereof or any rights, warrants or options to acquire any such shares or other securities, except, in the case of clause (iii), except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder or tax liability arising in connec- tion therewith, upon exercise of Company Stock Options outstanding on the date of this Agreement in accordance with their present terms(except pursuant to the Company's Rights Agreement);
(bd) authorize for issuance, issue, deliver, sell, pledge or otherwise encumber any shares of its capital stock (except pursuant to the Company's Rights Agreement) or the capital stock of any of its subsidiaries, any other voting securities or any securities convertible into, or any rights, warrants or options to acquire, any such shares, voting securities or convertible securities or any other securities or equity equivalents (including without limita- tion stock appreciation rights), or contractual obligation valued or measured by the value or market price of Company Common Stock (other than the issuance of Company Common Stock upon the exercise of Company Stock Options outstanding on the date of this Agreement and in accordance with their present terms, such issuance, together with the acquisitions of shares of Company Common Stock permitted under clause (a) above, being referred to herein as "Permitted Changes");
(c) amend its certificate of incorporation, by-laws or other comparable charter or organizational documents;
(d) acquire or agree to acquire by merging or consol- idating with, or by purchasing a substantial portion of the stock or assets of, or by any other manner, any business or any corporation, partnership, joint venture, association, or other business organization or division thereof;
(e) sell, lease, license, mortgage or otherwise encumber or subject to any Lien or otherwise dispose of any of its properties or assets that are material, individually or in the aggregate, to the Company and its subsidiaries taken as a whole, except sales of inventory and equipment in the ordinary course of business consistent with past prac- xxxx;
(f) (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its subsidiaries, guarantee any debt securities of another person, enter into any "keep well" or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing, except for short-term borrowings incurred in the ordinary course of business consistent with past practice, or (ii) make any loans, advances or capital contributions to, or investments in, any other person, other than to the Company or any direct or indirect wholly owned subsidiary of the Company;
(g) acquire or agree to acquire any assets that are material, individually or in the aggregate, to the Company and its subsidiaries taken as a whole, or make or agree to make any capital expenditures except in the ordinary course of business consistent with past practice;
(h) pay, discharge or satisfy any claims (including claims of stockholders), liabilities or obligations (abso- lute, accrued, asserted or unasserted, contingent or other- wise), except for the payment, discharge or satisfaction, of (i) liabilities or obligations in the ordinary course of business consistent with past practice or in accordance with their terms as in effect on the date hereof, (ii) liabili- ties reflected or reserved against in, or contemplated by, the most recent consolidated audited financial statements (or the notes thereof) of the Company included in the Recent SEC Documents, or waive, release, grant, or transfer any rights of material value or modify or change in any material respect any existing license, lease, contract or other document, other than in the ordinary course of business consistent with past practice;
(i) adopt or amend in any material respect (except as may be required by law or by this Agreement) any bonus, profit sharing, compensation, stock option, pension, retire- ment, deferred compensation, employment or other employee benefit plan, agreement, trust, fund or other arrangement (including any Company Benefit Plan) for the benefit or welfare of any employee, director or former director or employee or, other than increases for individuals (other than officers and directors) in the ordinary course of business consistent with past practice, increase the compen- sation or fringe benefits of any director, employee or former director or employee; pay any benefit not required by any existing plan, arrangement or agreement, grant any new or modified severance or termination arrangement or increase or accelerate any benefits payable under its severance or termination pay policies in effect on the date hereof, other than any such increase or acceleration provided for under such policies as in effect on the date of this Agreement;
(j) change any material accounting principle used by it, except for such changes as may be required to be implemented following the date of this Agreement pursuant to generally accepted accounting principles or rules and regu- lations of the SEC promulgated following the date hereof;
(k) take any action that would, or is reasonably likely to, result in any of its representations and warran- ties in this Agreement becoming untrue, or in any of the conditions to the Merger set forth in Article 6 not being satisfied;
(l) except in the ordinary course of business and consistent with past practice, make any tax election or settle or compromise any federal, state, local or foreign income tax liability; and
(m) authorize any of, or commit or agree to take any of, the foregoing actions.securities
Appears in 1 contract
Samples: Merger Agreement (Syratech Corp)
Covenants Relating to Conduct of Business Prior to Merger. 4.1 5.1 Conduct of Business of the CompanyGeneral. From the date of this Agreement to ------------------------------ the Effective Time (except as otherwise specif- ically specifically required by the terms of this Agreement), the Company General shall, and shall cause its subsidiaries to, act and carry on their respective businesses in the usual, regular and ordinary course of business consistent with past practice and, to the extent consistent therewith, use its best efforts to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships with insureds, reinsurers, customers, suppliers, licensorsinsurance brokers and agents, licens- ees, advertisers, distributors and others having business deal- ings dealings with them to the end that their goodwill and ongoing busi- nesses businesses shall not be impaired in any material respect at the Effective Time. Without limiting the generality of the forego- ingforegoing, from the date of this Agreement to the Effective TimeTime and except as otherwise Previously Disclosed or expressly contemplated by this Agreement, the Company General shall not, and shall not permit any of its subsidiaries to, without the prior written consent of the ParentBerkshire:
(a) (i) declare, set aside or pay any dividends on, or make any other distributions in respect of, any of its capital stock, other than (A) dividends and distributions by a direct or indirect wholly owned subsidiary of the Company General to its parent and the declaration and payment by the Company of parent, (B) regular quarterly cash dividends in an amount on General Common Stock not in excess of $.16 0.59 per share of Company Common Stockshare, with usual record and payment dates for such dividends in accordance with the CompanyGeneral's past dividend practicespractice, and (C) regular annual cash dividends on General Preferred Stock not in excess of $6.20 per share (or not in excess of the amount of the "Common Stock Equivalent Dividend" (as defined in Section 2(A) of the Certificate of Designations of General Preferred Stock (the "Certificate of Designations")) if General is required to pay such amount pursuant to Section 2(A) of the Certificate of Designations), with the usual record and payment date for such dividends in accordance with the Certificate of Designations, (ii) split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, or (iii) purchase, redeem or otherwise acquire any shares of capital stock of the Company General or any of its subsidiaries or any other securities thereof or any rights, warrants or options to acquire any such shares or other securities, except, in the case of clause (iii), for (x) the acquisition of shares of Company General Common Stock from holders of Company General Stock Options in full or partial payment of the exercise price payable by such holder or tax liability arising in connec- tion therewithconnection therewith (including by way of exercise of cash settlement rights pursuant to the terms of any General Stock Option), upon exercise of Company General Stock Options outstanding on the date of this Agreement in accordance with their present termsterms and (y) the redemption of General Preferred Stock as contemplated by Section 3.6 hereof;
(b) authorize for issuance, issue, deliver, sell, pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its subsidiaries, any other voting securities or any securities convertible into, or any rights, warrants or options to acquire, any such shares, voting securities or convertible securities or any other securities or equity equivalents (including without limita- tion limitation stock appreciation rights), or contractual obligation valued or measured by the value or market price of Company General Common Stock (other than the issuance of Company General Common Stock upon the exercise of Company General Stock Options outstanding on the date of this Agreement and in accordance with their present terms, such issuance, together with the acquisitions of shares of Company General Common Stock permitted under clause (a) above, being referred to herein as "Permitted Changes");
(c) amend its certificate Certificate of incorporationIncorporation, by-laws Bylaws or other comparable charter or organizational documents;
(d) acquire or agree to acquire by merging or consol- idating consolidating with, or by purchasing a substantial portion of the stock or assets of, or by any other manner, any business or any corporation, partnership, joint venture, association, or other business organization or division thereof;
(e) sell, lease, license, mortgage or otherwise encumber or subject to any Lien or otherwise dispose of any of its properties or assets that are material, individually or in the aggregate, to the Company General and its subsidiaries taken as a whole, except sales of inventory and equipment in the ordinary course of business consistent with past prac- xxxxpractice;
(f) (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or warrants or other rights to acquire any debt securities of the Company General or any of its subsidiaries, guarantee any debt securities of another person, enter into any "keep well" or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing, except for short-term borrowings incurred in the ordinary course of business consistent with past practice, or (ii) make any loans, advances or capital contributions to, or investments in, any other person, other than to the Company General or any direct or indirect wholly owned subsidiary of the CompanyGeneral;
(g) acquire or agree to acquire any assets that are material, individually or in the aggregate, to the Company General and its subsidiaries taken as a whole, or make or agree to make any capital expenditures except in the ordinary course of business consistent with past practice;
(h) pay, discharge or satisfy any claims (including claims of stockholders), liabilities or obligations (abso- luteabsolute, accrued, asserted or unasserted, contingent or other- wiseotherwise), except for the payment, discharge or satisfaction, of (i) liabilities or obligations in the ordinary course of business consistent with past practice or in accordance with their terms as in effect on the date hereof, (ii) liabili- ties liabilities reflected or reserved against in, or contemplated by, the most recent consolidated audited financial statements (or the notes thereof) of the Company General included in the Recent General SEC Documents, or waive, release, grant, or transfer any rights of material value or modify or change in any material respect any existing license, lease, contract or other document, other than in the ordinary course of business consistent with past practice;
(i) adopt or amend in any material respect (except as may be required by law or by this Agreement) any bonus, profit sharing, compensation, stock option, pension, retire- mentretirement, deferred compensation, employment or other employee benefit plan, agreement, trust, fund or other arrangement (including any Company General Benefit Plan) for the benefit or welfare of any employee, director or former director or employee or, other than increases for individuals (other than officers and directors) in the ordinary course of business consistent with past practice, increase the compen- sation compensation or fringe benefits of any director, employee or former director or employee; pay any benefit not required by any existing plan, arrangement or agreement, grant any new or modified severance or termination arrangement or increase or accelerate any benefits payable under its severance or termination pay policies in effect on the date hereof, other than any such increase or acceleration provided for under such policies as in effect on the date of this Agreement;
(j) change any material accounting principle used by it, except for such changes as may be required to be implemented following the date of this Agreement pursuant to generally accepted accounting principles or rules and regu- lations regulations of the SEC promulgated following the date hereof;
(k) take any action that would, or is reasonably likely to, result in any of its representations and warran- ties warranties in this Agreement becoming untrue, or in any of the conditions to the Merger Mergers set forth in Article 6 7 not being satisfied;
(l) except in the ordinary course of business and consistent with past practice, make any material tax election or settle or compromise any material federal, state, local or foreign income tax liability; and
(m) authorize any of, or commit or agree to take any of, the foregoing actions.
Appears in 1 contract
