Covenants Relating to Conduct of Business. Section 7.01. Conduct of the Company. From the date hereof until the Closing, the Company and the Subsidiaries shall conduct their business in the ordinary course consistent with past practice in compliance with all applicable laws and shall use their reasonable best efforts to preserve intact their business organizations and relationships with third parties and to keep available the services of their present officers and employees. Without limiting the generality of the foregoing, from the date hereof until the Closing and except as expressly contemplated by this Agreement or the other Transaction Agreements, as may result from the consummation of the Transactions, as set forth in Section 7.01 of the Company Disclosure Schedule, or as otherwise consented to in writing by Parent (except if such consent would be inconsistent with applicable law), such consent not to be unreasonably withheld with respect to the granting of IRUs in fiber and/or conduit by the Company or the Subsidiaries, the Company shall not and shall cause the Subsidiaries not to: (a) adopt or propose any change in its articles of incorporation, bylaws or other organizational documents; (b) issue, deliver, sell, pledge or transfer or authorize or propose the issuance, delivery, sale, pledge or transfer of any shares of its capital stock of any class or any securities convertible into or exercisable for, or any rights, warrants, options or other rights to acquire, any such shares or enter into any agreement with respect to the foregoing other than (i) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms, (ii) as required by Contracts in effect as of the date of this Agreement that are listed in Section 4.05 of the Company Disclosure Schedule and (iii) the issuance of capital stock of the Company as a dividend in respect of Preferred Stock outstanding on the date hereof in accordance with its present terms; (i) acquire (by merger, consolidation or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof, (ii) sell, lease or otherwise dispose of a Subsidiary or (iii) sell, lease or otherwise dispose of an amount of assets or securities, including IRUs, for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), except for transactions in the ordinary course consistent with past practice; (d) merge or consolidate with any other Person; (e) make any investment, whether by purchase of stock or securities, contributions to capital or any property transfer (other than investments in cash or cash equivalents with a maturity of less than 90 days or investments in wholly-owned Subsidiaries made, in each case, in the ordinary course of business consistent with past practice), or purchase for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), any property or assets of any other individual or entity, except for inventory purchased for resale in the ordinary course of business consistent with past practice; (f) enter into any agreement or arrangement that limits or otherwise restricts the Company or any of the Subsidiaries or any of their respective Affiliates or successors thereto or that by its terms could, after the Effective Time, limit or restrict Parent or the Company or any of their respective Affiliates or any successor thereto, from engaging or competing in any line of business or in any geographic area; (g) other than in the ordinary course of business consistent with past practice, waive, release or relinquish any material right; (h) other than in the ordinary course of business consistent with past practice, modify or change in any material respect any existing material license, lease, contract, or other agreement; (i) enter into any agreements involving aggregate expenditures or receipts of more than $100,000 individually or $500,000 in the aggregate (or, with respect to (i) any Cost of Services Contract, $1,000,000 and (ii) switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any agreements in the ordinary course of business consistent with past practice, including but not limited to installation fees and customer premise equipment, in each case, associated with new customers and in the ordinary course of business consistent with past practice; (j) create, incur or assume, or execute any new guarantee of, any Indebtedness in excess of $100,000 in the aggregate (other than indebtedness for borrowed money owing to W or any of its Affiliates) or prepay any Indebtedness; (k) other than pursuant to arrangements existing on the date hereof, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for obligations of any other person (other than any Subsidiary) in an amount in excess of $100,000; (l) make any loans or advances other than (i) loans or advances to wholly-owned Subsidiaries made in the ordinary course of business consistent with past practice and (ii) routine salary, travel and expense advances to Company Employees in the ordinary course of business consistent with past practice; (i) engage in any transaction, or enter into any contract, agreement or arrangement (other than this Agreement, the Transactions and the incurrence of indebtedness for borrowed money owing to W or any of its Affiliates and transactions pursuant to any such contract, agreement or arrangement entered into on or prior to the date hereof), with any Affiliate, (ii) engage in any transaction, or enter into any contract, agreement or arrangement, with any portfolio company of W that is not on arm's length terms and in the ordinary course of business, or (iii) amend, waive or relinquish any rights relating to any such transaction, contract, agreement or arrangement referred to in clause (i) or (ii) that will remain outstanding after the Closing in accordance with Section 8.05; (n) authorize any new capital expenditures which, individually, are greater than $100,000 or, in the aggregate, would cause total capital expenditures for year ending December 31, 2003 to exceed $500,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any capital expenditures in the ordinary course of business consistent with past practice; (o) split, combine or reclassify any shares of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, other than (i) cash dividends and distributions by a wholly-owned Subsidiary to the Company or to a Subsidiary all of the capital stock which is owned directly or indirectly by the Company or (ii) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms; or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its securities or any securities of the Subsidiaries; (p) (i) increase the compensation or fringe benefits of any Company Employee (except for (x) increases in salary or wages in the ordinary course of business consistent with past practice, (y) the payment of accrued or earned but unpaid bonuses and (z) stay bonuses or similar retention payments in an amount not to exceed $10,000 with respect to any individual payment and $100,000 in the aggregate with respect to all such payments), (ii) grant any severance or termination pay to any Company Employee, (iii) loan or advance any money or other property to any Company Employee (other than routine salary, travel and expense advances to Company Employees in the ordinary course of business and consistent with past practice), (iv) establish, adopt, enter into, amend or terminate any Company Plan, collective bargaining or labor agreement 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 of this Agreement (other than as may be required by the terms of an existing Company Plan or collective bargaining agreement, or as may be required by applicable law or in order to qualify under Sections 401 and 501 of the Code), or (v) grant any equity or equity-based awards, other than in the cases of clauses (i) through (v) pursuant to commitments of the Company or any Subsidiary existing on the date hereof required by contracts set forth in Section 4.08(k) or Section 4.12 of the Company Disclosure Schedule; (q) pay, discharge or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business of liabilities reflected or reserved against in the consolidated financial statements of the Company referred to in Section 4.07 or liabilities incurred in the ordinary course of business; (r) make or change any tax election or settle or compromise any income tax liability; (s) other than in the ordinary course of business consistent with past practice, change any method of accounting, accounting policy or accounting practice, except for any such change required by reason of a concurrent change in GAAP as concurred with by the Company's independent auditors; (t) fail to maintain insurance coverage at presently existing levels; (u) make any repayments of principal to W or its Affiliates in respect of any Indebtedness owed to W or its Affiliates or any payment of interest accrued in respect of such Indebtedness; (v) agree or commit to do any of the foregoing; or (w) knowingly take or agree or commit to take any action that would make any representation and warranty of W or the Company hereunder inaccurate in any material respect at, or as of any time prior to, the Closing, except for any representations or warranties that are made as of a specified date.
Appears in 2 contracts
Samples: Merger Agreement (Itc Deltacom Inc), Merger Agreement (Itc Deltacom Inc)
Covenants Relating to Conduct of Business. Section 7.01. 5.1 Conduct of the CompanyBusiness. From the date hereof until the Closingearlier of (a) the termination of this Agreement in accordance with Section 8.1 and (b) the Payment Date, except as provided in Section 5.1 of the Company Disclosure Schedule, or as expressly permitted by this Agreement, or as agreed in writing by Parent, the Company shall, and the shall cause each of its Subsidiaries shall conduct their to, carry on its business in the ordinary course consistent with past practice in compliance with all applicable laws and shall practice, to use their respective reasonable best efforts to preserve intact their the business organizations organization of the Company and relationships with third parties and its Subsidiaries, to keep available the services of their respective present officers and employeeskey employees and to preserve the goodwill of those having business relationships with the Company and its Subsidiaries. Without limiting the generality of the foregoing, from the date hereof until the Closing earlier of (a) the termination of this Agreement in accordance with Section 8.1 and (b) the Payment Date, except as expressly provided in Section 5.1 of the Company Disclosure Schedule or as contemplated by this Agreement or the other Transaction Agreements, as may result from the consummation of the Transactions, as set forth in Section 7.01 of the Company Disclosure Schedule, or as otherwise consented to in writing required by Parent (except if such consent would be inconsistent with applicable law), such consent not to be unreasonably withheld with respect to the granting of IRUs in fiber and/or conduit by the Company or the SubsidiariesLaw, the Company shall not not, and shall cause the not permit any of its Subsidiaries not to, without Parent’s prior written consent:
(a) adopt (i) declare, set aside or propose pay any change dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its articles capital stock, other than dividends or distributions by a direct or indirect wholly owned Subsidiary of incorporationthe Company to its parent in the ordinary course of business consistent with past practice or (ii) split, bylaws combine or reclassify any of its capital stock or issue or authorize the issuance of any other organizational documentssecurities in respect of, in lieu of or in substitution for shares of its capital stock;
(b) issue, deliver, sell, pledge or transfer or authorize or propose the issuance, delivery, salegrant, pledge or transfer of otherwise encumber any shares of its capital stock of stock, any class other voting securities or any securities convertible into or exercisable forinto, or any rights, warrants, warrants or options or other rights to acquire, any such shares shares, voting securities or enter into convertible securities, or any agreement with respect to the foregoing “phantom” stock, “phantom” stock rights, stock appreciation rights or stock based performance units other than shares issued pursuant to settlement of stock-based awards (i) the issuance of Company Common Stock upon exercise of including but not limited to stock options appreciation rights or warrantsperformance shares), or conversion of Preferred Stock, in each case outstanding on the date hereof in accordance with their present terms, (ii) as required by Contracts in effect as of the date of this Agreement that are listed in Section 4.05 of the Company Disclosure Schedule and (iii) the issuance of capital stock of the Company as a dividend in respect of Preferred Stock outstanding on the date hereof in accordance with its present termshereof;
(ic) acquire (by merger, consolidation amend the Company Governing Documents or acquisition the comparable charter or organizational documents of stock or assets) any corporation, partnership or other business organization or division thereof, (ii) sell, lease or otherwise dispose of a Subsidiary or (iii) sell, lease or otherwise dispose of an amount of assets or securities, including IRUs, for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), except for transactions in the ordinary course consistent with past practiceits Subsidiaries;
(d) merge acquire in any manner any assets of any Third Party, except for (i) acquisitions of inventory or consolidate with any other Person;
(e) make any investment, whether by purchase of stock or securities, contributions to capital or any property transfer (other than investments in cash or cash equivalents with a maturity of less than 90 days or investments in whollynon-owned Subsidiaries made, in each case, fixed assets in the ordinary course of business consistent with past practice), (ii) incur, assume or purchase for modify any individual capital project, including capitalized or operating lease obligations, other than routine replacement and repair of equipment and facilities in the ordinary course of business and capital expenditure commitments existing as of the date hereof, in an amount in excess of $100,000 250,000 and (oriii) pursuant to contracts existing as of the date hereof and described in Section 5.1 of the Company Disclosure Schedule;
(e) (i) sell, with respect transfer, pledge, guarantee, lease, license, mortgage, sell and leaseback or otherwise subject to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), any property Lien or assets otherwise dispose of any of its properties or other individual or entityassets to a Third Party, except for (A) sales of properties, inventory purchased for resale or other assets in the ordinary course of business consistent with past practicepractice or (B) pursuant to contracts existing as of the date hereof and described in Section 5.1 of the Company Disclosure Schedule; (ii) incur, assume or modify any indebtedness for money borrowed or guarantee thereof, including capitalized lease obligations, except for drawdowns or borrowings under the credit facilities of the Company in effect on the date hereof in the ordinary course of business consistent with past practice and in an amount not to exceed $1,000,000 in the aggregate in connection with the operations of the Company; or (iii) redeem, purchase or otherwise acquire directly or indirectly, by repurchase or otherwise any shares of the capital stock of the Company or any Subsidiary except (A) for shares acquired by the Company from the holder of any stock-based award in satisfaction of the exercise price of a stock-based award or Taxes or withholding obligations in case of a stock-based award in each case outstanding as of the date hereof, (B) for shares acquired in the open market for the benefit of any employee stock plan in the ordinary course of business consistent with past practice or (C) as contemplated by this Agreement;
(f) enter into grant to any agreement director or arrangement that limits or otherwise restricts officer of the Company or any of its Subsidiaries (i) any increase in compensation, bonus or other benefits or (ii) any increase in severance or termination pay, in each case except as required by any employment, severance, change in control, or termination agreement in effect as of the Subsidiaries date hereof;
(g) (i) amend any provision of any Employee Benefit Plan or (ii) adopt or enter into any arrangement that would be an Employee Benefit Plan, except (A) to the extent required under the terms of any agreements, trusts, plans, funds or other written arrangements existing as of the date hereof or (B) to the extent required to comply with applicable Law;
(h) change any of their respective Affiliates the Company’s accounting methods or successors thereto principles, except as required by GAAP or that applicable Law, make or change any election in respect of Taxes, adopt or change any accounting method in respect of Taxes, enter into any tax allocation agreement, tax sharing agreement, tax indemnity agreement or closing agreement, settle or compromise any claim, notice, audit report or assessment in respect of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes;
(i) commence or settle (i) any suit, action or proceeding relating to the transactions contemplated by its terms couldthis Agreement or (ii) any other suit, after the Effective Time, limit action or restrict Parent proceeding involving payments by or to the Company or any of their respective Affiliates or any successor thereto, from engaging or competing its Subsidiaries in any line excess of business or in any geographic area$500,000;
(gj) other than in the ordinary course of business consistent with past practicepractices, waiveenter into or become bound by, release or relinquish permit any of the assets owned or used by it to become bound by, any material rightcontract, or amend or terminate, or waive or exercise any right or remedy under, any such contract;
(hk) enter into any material transaction or take any other material action outside the ordinary course of business or inconsistent with past practices including but not limited to entering into any (i) material feed ingredient contract or commodity future contract, option contract or similar agreement including, without limitation, any such agreement that extends beyond 60 days from the date hereof; (ii) material agreement or arrangement establishing, creating or relating to any rebate, promotion, advertising coupon or other allowances; (iii) material toll processing, co-packing or similar agreement; or (iv) other contract, agreement or arrangement involving total future payment or payments in excess of $1,000,000 (other than one-time purchase orders with respect to raw materials and one-time sales contracts relating to the sale of inventory, each in the ordinary course of business consistent with past practice, modify or change in any material respect any existing material license, lease, contract, or other agreement;
(i) enter into any agreements involving aggregate expenditures or receipts of more than $100,000 individually or $500,000 in the aggregate (or, with respect to (i) any Cost of Services Contract, $1,000,000 and (ii) switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000business), other than any agreements in the ordinary course of business consistent with past practice, including but not limited to installation fees and customer premise equipment, in each case, associated with new customers and in the ordinary course of business consistent with past practice;
(j) create, incur or assume, or execute any new guarantee of, any Indebtedness in excess of $100,000 in the aggregate (other than indebtedness for borrowed money owing to W or any of its Affiliates) or prepay any Indebtedness;
(k) other than pursuant to arrangements existing on the date hereof, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for obligations of any other person (other than any Subsidiary) in an amount in excess of $100,000;
(l) make any loans or advances other than (i) loans or advances to wholly-owned Subsidiaries made material change in the ordinary course of business consistent with past practice and (ii) routine salary, travel and expense advances to Company Employees in the ordinary course of business consistent with past practice;
(i) engage in any transaction, production capabilities or enter into any contract, agreement or arrangement (other than this Agreement, the Transactions and the incurrence of indebtedness for borrowed money owing to W or any of its Affiliates and transactions pursuant to any such contract, agreement or arrangement entered into on or prior to the date hereof), with any Affiliate, (ii) engage in any transaction, or enter into any contract, agreement or arrangement, with any portfolio company of W that is not on arm's length terms and in the ordinary course of business, or (iii) amend, waive or relinquish any rights relating to any such transaction, contract, agreement or arrangement referred to in clause (i) or (ii) that will remain outstanding after the Closing in accordance with Section 8.05;
(n) authorize any new capital expenditures which, individually, are greater than $100,000 or, in the aggregate, would cause total capital expenditures for year ending December 31, 2003 to exceed $500,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any capital expenditures in the ordinary course of business consistent with past practice;
(o) split, combine or reclassify any shares of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, other than (i) cash dividends and distributions by a wholly-owned Subsidiary to the Company or to a Subsidiary all capacities of the capital stock which is owned directly or indirectly by the Company or (ii) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms; or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its securities or any securities of the Subsidiaries;
(p) (i) increase the compensation or fringe benefits of any Company Employee (except for (x) increases in salary or wages in the ordinary course of business consistent with past practice, (y) the payment of accrued or earned but unpaid bonuses and (z) stay bonuses or similar retention payments in an amount not to exceed $10,000 with respect to any individual payment and $100,000 in the aggregate with respect to all such payments), (ii) grant any severance or termination pay to any Company Employee, (iii) loan or advance any money or other property to any Company Employee (other than routine salary, travel and expense advances to Company Employees in the ordinary course of business and consistent with past practice), (iv) establish, adopt, enter into, amend or terminate any Company Plan, collective bargaining or labor agreement 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 of this Agreement (other than as may be required by the terms of an existing Company Plan or collective bargaining agreement, or as may be required by applicable law or in order to qualify under Sections 401 and 501 of the Code), or (v) grant any equity or equity-based awards, other than in the cases of clauses (i) through (v) pursuant to commitments of the Company or any Subsidiary existing on the date hereof required by contracts set forth in Section 4.08(k) or Section 4.12 of the Company Disclosure Schedule;
(q) pay, discharge or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business of liabilities reflected or reserved against in the consolidated financial statements of the Company referred to in Section 4.07 or liabilities incurred in the ordinary course of business;
(r) make or change any tax election or settle or compromise any income tax liability;
(s) other than in the ordinary course of business consistent with past practice, change any method of accounting, accounting policy or accounting practice, except for any such change required by reason of a concurrent change in GAAP as concurred with by the Company's independent auditors;
(t) fail to maintain insurance coverage at presently existing levels;
(u) make any repayments of principal to W or its Affiliates in respect of any Indebtedness owed to W or its Affiliates or any payment of interest accrued in respect of such Indebtedness;
(v) agree or commit to do any of the foregoing’s production facilities; or
(wm) knowingly take authorize any of, or commit, propose or agree or commit to take any action that would make any representation and warranty of W or the Company hereunder inaccurate in any material respect at, or as of any time prior toof, the Closing, except for any representations or warranties that are made as of a specified dateforegoing actions.
Appears in 2 contracts
Samples: Merger Agreement (Gold Kist Inc.), Merger Agreement (Gold Kist Inc.)
Covenants Relating to Conduct of Business. (a) Except as contemplated or permitted by this Agreement, as set forth in Section 7.01. Conduct 5.01(a) of the Company. From Company Disclosure Letter or with the prior written consent of Purchaser, from the date hereof until of this Agreement to the Closing, the Company shall, and shall cause the Subsidiaries shall to, conduct their business respective businesses in the ordinary course consistent with past practice in compliance with all applicable laws substantially the same manner as previously conducted. In addition (and shall use their reasonable best efforts to preserve intact their business organizations and relationships with third parties and to keep available the services of their present officers and employees. Without without limiting the generality of the foregoing), from the date hereof until the Closing and except as expressly contemplated by this Agreement or the other Transaction Agreements, as may result from the consummation of the Transactions, as set forth in Section 7.01 5.01(a) of the Company Disclosure ScheduleLetter, required by Applicable Law or as otherwise consented to in writing contemplated or permitted by Parent (except if such consent would be inconsistent with applicable law)this Agreement, such consent not to be unreasonably withheld with respect from the date of this Agreement to the granting of IRUs in fiber and/or conduit by the Company or the SubsidiariesClosing, the Company shall not not, and shall cause not permit any Subsidiary to, do any of the Subsidiaries not tofollowing without the prior written consent of Purchaser:
(ai) adopt declare, set aside or propose pay any change dividends on, or make any other distributions (whether in cash, shares or property) in respect of, any of its articles share capital, other than dividends or distributions by a direct or indirect wholly owned Subsidiary of incorporation, bylaws or other organizational documentsthe Company to its parent;
(bii) (A) split, consolidate, combine or reclassify any of its outstanding share capital or issue or authorize the issuance of any shares or other securities in respect of, in lieu of or in substitution for its shares or (B) purchase, redeem or otherwise acquire any shares of the Company or any Subsidiary or any rights, warrants or options to acquire any such shares;
(iii) issue, deliver, sell, grant or pledge or transfer or authorize or propose the issuance, delivery, sale, pledge or transfer of any shares of its capital stock of the Company or any class Subsidiary, any other voting securities or any securities convertible into or exercisable for(including “phantom” share rights, share appreciation rights and share-based performance units), or any rights, warrants, warrants or options or other rights to acquire, any such shares shares, voting securities or enter into any agreement with respect to the foregoing other than (i) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms, (ii) as required by Contracts in effect as of the date of this Agreement that are listed in Section 4.05 of the Company Disclosure Schedule and (iii) the issuance of capital stock of the Company as a dividend in respect of Preferred Stock outstanding on the date hereof in accordance with its present termsconvertible securities;
(iiv) acquire amend the Company Memorandum of Association or the Company Articles or the comparable organizational documents of any Subsidiary or Goodwood;
(by merger, consolidation or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof, (iiv) sell, lease lease, license or otherwise dispose of a Subsidiary any Vessel or any other material assets;
(iiivi) enter into any Contract with respect to any merger, consolidation, liquidation, dissolution or business combination involving the Company or any Subsidiary;
(vii) purchase, sell, lease lease, pledge or otherwise dispose of an amount of or acquire any property or assets for which the aggregate consideration paid or securities, including IRUs, for an amount payable in any individual transaction is in excess of $100,000 (or, with respect to switch software upgrades for purposes 250,000 or in the aggregate in excess of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), except ;
(viii) incur any financial indebtedness for transactions borrowed money (other than accounts payable incurred in respect of property or services purchased in the ordinary course of business consistent with past practice;
(d) merge or consolidate with any other Person;
(e) make any investment, whether by purchase of stock third party loans or securities, contributions to capital or any property transfer advances (other than investments in cash or cash equivalents with a maturity of less than 90 days or investments in wholly-owned Subsidiaries madethan, in each case, in the ordinary course of business consistent with past practice), or purchase for an amount individual amounts not in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), any property 250,000 or assets of any other individual or entity, except for inventory purchased for resale in the ordinary course of business consistent with past practice;
(f) enter into any agreement or arrangement that limits or otherwise restricts the Company or any of the Subsidiaries or any of their respective Affiliates or successors thereto or that by its terms could, after the Effective Time, limit or restrict Parent or the Company or any of their respective Affiliates or any successor thereto, from engaging or competing in any line of business or in any geographic area;
(g) other than in the ordinary course of business consistent with past practice, waive, release or relinquish any material right;
(h) other than in the ordinary course of business consistent with past practice, modify or change in any material respect any existing material license, lease, contract, or other agreement;
(i) enter into any agreements involving aggregate expenditures or receipts of more than $100,000 individually or $500,000 in the aggregate (or, with respect to (i) any Cost of Services Contract, $1,000,000 and (ii) switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any agreements in the ordinary course of business consistent with past practice, including but not limited to installation fees and customer premise equipment, in each case, associated with new customers and in the ordinary course of business consistent with past practice;
(j) create, incur or assume, or execute any new guarantee of, any Indebtedness in excess of $100,000 1,000,000);
(ix) make any capital expenditures in excess of $250,000 individually or $1,000,000 in the aggregate (other than indebtedness for borrowed money owing to W or any of its Affiliates) or prepay any Indebtedness;
(k) other than pursuant to arrangements existing on the date hereof, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for obligations of any other person (other than any Subsidiary) in an amount in excess of $100,000;
(l) make any loans or advances other than (i) loans or advances to wholly-owned Subsidiaries made capital expenditures included in the ordinary course of business consistent with past practice and (ii) routine salary, travel and expense advances to plans for the Company Employees in the ordinary course of business consistent with past practice;
(i) engage in any transaction, or enter into any contract, agreement or arrangement (other than this Agreement, the Transactions and the incurrence of indebtedness for borrowed money owing Subsidiaries that have been made available to W or any of its Affiliates and transactions pursuant to any such contract, agreement or arrangement entered into on or Purchaser prior to the date hereofof this Agreement), with any Affiliate, (ii) engage in any transaction, or enter into any contract, agreement or arrangement, with any portfolio company of W that is not on arm's length terms and in the ordinary course of business, or (iii) amend, waive or relinquish any rights relating to any such transaction, contract, agreement or arrangement referred to in clause (i) or (ii) that will remain outstanding after the Closing in accordance with Section 8.05;
(nx) authorize any new capital expenditures which, individually, are greater than $100,000 or, in the aggregate, would cause total capital expenditures for year ending December 31, 2003 to exceed $500,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any capital expenditures in the ordinary course of business consistent with past practice;
(o) split, combine or reclassify any shares of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property except as required by law or any combination thereof) in respect of its capital stock, other than (i) cash dividends and distributions judgment by a wholly-owned Subsidiary to the Company or to a Subsidiary all court of the capital stock which is owned directly or indirectly by the Company or (ii) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms; or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its securities or any securities of the Subsidiaries;
(p) (i) increase the compensation or fringe benefits of any Company Employee (except for (x) increases in salary or wages in the ordinary course of business consistent with past practicecompetent jurisdiction, (y) the payment of accrued or earned but unpaid bonuses and (z) stay bonuses or similar retention payments in an amount not to exceed $10,000 with respect to any individual payment and $100,000 in the aggregate with respect to all such payments), (ii) grant any severance or termination pay to any Company Employee, (iii) loan or advance any money or other property to any Company Employee (other than routine salary, travel and expense advances to Company Employees in the ordinary course of business and consistent with past practice), (iv) establish, adopt, enter into, amend or terminate any Company Plan, collective bargaining or labor agreement 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 of this Agreement (other than as may be required by the terms of an existing Company Plan or collective bargaining agreement, or as may be required by applicable law or in order to qualify under Sections 401 and 501 of the Code), or (v) grant any equity or equity-based awards, other than in the cases of clauses (i) through (v) pursuant to commitments of the Company or any Subsidiary existing on the date hereof required by contracts set forth in Section 4.08(k) or Section 4.12 of the Company Disclosure Schedule;
(qA) pay, discharge discharge, settle or satisfy any material claims, liabilities liabilities, obligations or obligations litigation (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge discharge, settlement or satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms of liabilities disclosed, reflected or reserved against in the consolidated Year End Balance Sheet (for amounts not in excess of such reserves) or incurred since the date of such financial statements of the Company referred to in Section 4.07 or liabilities incurred in the ordinary course of business;
(r) make or change any tax election or settle or compromise any income tax liability;
(s) other than in the ordinary course of business consistent with past practice, change (B) cancel any method indebtedness or (C) waive or assign any claims or rights of accountingsubstantial value;
(xi) establish, accounting policy adopt, amend in any material respect or accounting practiceterminate any Company Benefit Plan or any arrangement which, upon its establishment or adoption, would constitute a Company Benefit Plan, except as may be required by Applicable Laws or pursuant to the terms of any Company Benefit Plan or Contract, as in effect on the date of this Agreement;
(xii) make or promise to make any bonus, profit-sharing or similar payment, or fund, materially increase or accelerate the vesting, payment or amount of, wages, salary, commissions, fringe benefits, severance benefits, deferred compensation or other compensation or benefits (including equity-based compensation, whether payable in cash or otherwise) or remuneration payable to, or for the benefit of, any current or former director, Employee, consultant or independent contractor, in each case except (A) as required by Applicable Laws or the terms of any Company Benefit Plan or Contract, as in effect on the date of this Agreement, (B) in the ordinary course of business (including in connection with promotions and employee review cycles) or (C) for any such change required by reason action for which Sellers and their affiliates (other than the Company and the Subsidiaries) would be solely and directly liable (including where the Sellers are liable for this as a result of a concurrent change the full and entire effect and impact of such matter having been included in GAAP as concurred with by the Company's independent auditorscalculation of the Actual Equity Amount);
(txiii) hire or promote any Employee of the Company or any Subsidiary (whether or not in the ordinary course of business) or terminate the employment of any current Employee, other than due to such Employee’s death or disability or for cause (as determined by the Company or any Subsidiary, as applicable, in its reasonable discretion consistent with past practice);
(xiv) make any material Tax election or settle or compromise any material Tax liability;
(xv) enter into, modify, amend or terminate any Listed Contract (other than by entering into the New Service Contracts in accordance with, and as anticipated by, this Agreement) or waive, release or assign any material rights or claims thereunder, which if so entered into, modified, amended, terminated, waived, released or assigned would reasonably be expected to (A) adversely affect in any material respect the Company, (B) impair in any material respect the ability of the Company to perform its obligations under this Agreement or (C) prevent or materially delay the consummation of the transactions contemplated by this Agreement;
(xvi) enter into any charter of any Vessel in excess of three months’ duration;
(xvii) make any changes in any material respect in the Company’s or any Subsidiary’s financial accounting or actuarial methods, principles or practices, except as may be required by SFRS (or any interpretation thereof) or by Applicable Law;
(xviii) fail to maintain insurance coverage at presently existing levels;
(u) make comply with or breach any repayments representations, warranties, covenants, agreements, undertakings, obligations or conditions of principal to W the Company or its Affiliates in respect of any Indebtedness owed to W or its Affiliates or any payment of interest accrued in respect of such Indebtedness;
(v) agree or commit to do the Subsidiaries under any of the foregoingCompany Debt Facilities, which breach would (or with the passage of time would) constitute a default or event of default under the Company Debt Facilities; or
(wxix) knowingly take authorize any of, or commit or agree to take, whether in writing or commit otherwise, to take do any action that would make any representation and warranty of W or the Company hereunder inaccurate in any material respect at, or as of any time prior toof, the Closing, except for any representations or warranties that are made as of a specified dateforegoing actions.
Appears in 2 contracts
Samples: Share Purchase Agreement (DHT Holdings, Inc.), Share Purchase Agreement (DHT Holdings, Inc.)
Covenants Relating to Conduct of Business. Section 7.015.1. Conduct of Business by the Surviving Company. From During the period from the date hereof of this Agreement and continuing until the ClosingClosing Date, the Surviving Company agrees as to itself and its Subsidiaries that (except as expressly contemplated or permitted by this Agreement or the Surviving Company Disclosure Schedule or as required by a Governmental Entity of competent jurisdiction or to the extent that Seller otherwise agrees in writing, which consent shall not be unreasonably withheld or delayed):
(a) The Surviving Company and the its Subsidiaries shall conduct carry on their business respective businesses in the usual, regular and ordinary course consistent with past practice in substantially the same manner as heretofore conducted and in compliance in all material respects with all applicable laws and shall use their reasonable best efforts to preserve intact their business organizations and relationships with third parties and to keep available the services of their present officers and employees. Without limiting the generality of the foregoing, from the date hereof until the Closing and except as expressly contemplated by this Agreement or the other Transaction Agreements, as may result from the consummation of the Transactions, as set forth in Section 7.01 of the Company Disclosure Schedule, or as otherwise consented to in writing by Parent (except if such consent would be inconsistent with applicable law), such consent not to be unreasonably withheld with respect to the granting of IRUs in fiber and/or conduit by the Company or the Subsidiaries, the Company shall not and shall cause the Subsidiaries not to:
(a) adopt or propose any change in its articles of incorporation, bylaws or other organizational documents;regulations.
(b) The Surviving Company shall not, and except in the ordinary course of business shall not permit any of its Subsidiaries to, (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 Subsidiary of the Surviving Company to its shareholders in accordance with their respective interests, (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 Surviving 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.
(c) The Surviving Company shall not, and except in the ordinary course of business, shall not permit any of its Subsidiaries to, issue, deliver, sell, pledge or transfer or authorize or propose the issuance, delivery, sale, pledge or transfer of otherwise encumber any shares of its capital stock of stock, any class other voting securities or any securities convertible into or exercisable forinto, or any rights, warrants, warrants or options or other rights to acquire, any such shares shares, voting securities or enter into any agreement with respect to the foregoing convertible securities (other than (iw) the issuance of Surviving Company Common Stock, upon the exercise of Employee Stock Options outstanding on the date of this Agreement and in accordance with their present terms and (x) the issuance of Surviving Company Common Stock upon the exercise of stock options or warrants, or conversion warrants of Preferred Stock, the Surviving Company outstanding on the date hereof of this Agreement and in accordance with their present terms).
(d) The Surviving Company shall not, and shall not permit any of its Subsidiaries to, knowingly take any action that would jeopardize qualification of the Sale and Liquidation as a reorganization within the meaning of Section 368(a) of the Code.
(e) The Surviving Company shall use reasonable efforts to cause its officers to furnish such representations to Seller's and the Surviving Company's counsel as may reasonably be requested to enable such counsel to deliver the opinions described in Sections 7.2(c) and 7.3(d).
(f) Other than acquisitions disclosed on the Surviving Company Disclosure Schedule and acquisitions for cash in existing or related lines of business of the Surviving Company the fair market value of the total consideration (including the value of Indebtedness acquired or assumed) for which does not exceed the amount specified in the aggregate for all such acquisitions in Section 5.1(f) of the Surviving Company Disclosure Schedule, the Surviving Company shall not, and shall not permit any of its Subsidiaries to, acquire or agree to acquire by merging or consolidating with, or by purchasing a substantial equity interest in or a substantial portion of the assets of, or by any other manner, any business or any Person or division thereof or otherwise acquire or agree to acquire any assets (other than the acquisition of assets used in the operations of the business of the Surviving Company and its Subsidiaries in the ordinary course); provided, that the foregoing shall not prohibit internal reorganizations or consolidations involving existing Subsidiaries of the Surviving Company or the creation of new subsidiaries of the Surviving Company to conduct or continue activities otherwise permitted by this Agreement.
(g) Other than (i) internal reorganizations or consolidations involving existing subsidiaries of the Surviving Company, and (ii) as required dispositions referred to in Surviving Company SEC Reports filed prior to the date of this Agreement the Surviving Company shall not, and shall not permit any of its Subsidiaries, except in the ordinary course of business to, sell, lease or encumber or otherwise dispose of, or agree to sell, lease, encumber or otherwise dispose of, any of its assets (including capital stock of Subsidiaries of the Surviving Company) the fair market value of the total consideration (including the value of the Indebtedness acquired or assumed) for which does not exceed the amount specified in the aggregate for all such dispositions in Section 5.1(g) of the Surviving Company Disclosure Schedule.
(h) Other than in connection with actions permitted by Contracts clause (c) above, the Surviving Company shall not, and shall not permit any of its Subsidiaries to, (i) make any loans, advances or capital contributions to, or investments in, any other Person (other than (w) in effect accordance with normal cash management or treasury functions, (x) by the Surviving Company or a Subsidiary thereof to or in the Surviving Company or a Subsidiary thereof, (y) pursuant to any contract or other legal obligation of the Surviving Company or any of its Subsidiaries existing as of the date of this Agreement that are listed in Section 4.05 of the Company Disclosure Schedule and (iii) the issuance of capital stock of the Company as a dividend in respect of Preferred Stock outstanding on the date hereof in accordance with its present terms;
(i) acquire (by mergerAgreement, consolidation or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof, (ii) sell, lease or otherwise dispose of a Subsidiary or (iiiz) sell, lease or otherwise dispose of an amount of assets or securities, including IRUs, for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), except for transactions in the ordinary course consistent with past practice;
(d) merge or consolidate with any other Person;
(e) make any investment, whether by purchase of stock or securities, contributions to capital or any property transfer (other than investments in cash or cash equivalents with a maturity of less than 90 days or investments in wholly-owned Subsidiaries made, in each case, in the ordinary course of business consistent with past practicepractice in an aggregate amount not in excess of the aggregate amount specified in Section 5.1(h) of the Surviving Company Disclosure Schedule), or purchase for an amount (ii) create, incur, assume or suffer to exist any Indebtedness, issuances of debt securities, guarantees, loans or advances not in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), any property or assets of any other individual or entity, except for inventory purchased for resale in the ordinary course of business consistent with past practice;
(f) enter into any agreement or arrangement that limits or otherwise restricts the Company or any existence as of the Subsidiaries date of this Agreement except pursuant to the credit facilities, indentures and other arrangements in existence on the date of this Agreement or any of their respective Affiliates or successors thereto or that by its terms could, after the Effective Time, limit or restrict Parent or the Company or any of their respective Affiliates or any successor thereto, from engaging or competing in any line of business or in any geographic area;
(g) other than in the ordinary course of business consistent with past practice, waivein each case as such credit facilities, release indentures and other arrangements may be amended, extended, modified, refinanced, renewed or relinquish any material right;
(h) other than in refinanced after the ordinary course date of business consistent with past practice, modify or change in any material respect any existing material license, lease, contract, or other agreement;this Agreement.
(i) enter into The Surviving Company shall not, and shall not permit its Subsidiaries to, take any agreements involving aggregate expenditures action or receipts of more than $100,000 individually or $500,000 in the aggregate (or, with respect to (i) any Cost of Services Contract, $1,000,000 and (ii) switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any agreements in the ordinary course of business consistent with past practice, including but not limited to installation fees and customer premise equipment, in each case, associated with new customers and in the ordinary course of business consistent with past practice;
(j) create, incur or assume, or execute any new guarantee of, any Indebtedness in excess of $100,000 in the aggregate (other than indebtedness for borrowed money owing to W or any of its Affiliates) or prepay any Indebtedness;
(k) other than pursuant to arrangements existing on the date hereof, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for obligations of any other person (other than any Subsidiary) in an amount in excess of $100,000;
(l) make any loans or advances other than (i) loans or advances to wholly-owned Subsidiaries made in the ordinary course of business consistent with past practice and (ii) routine salary, travel and expense advances to Company Employees in the ordinary course of business consistent with past practice;
(i) engage in any transaction, or enter into any contract, agreement or arrangement (other than this Agreement, the Transactions and the incurrence of indebtedness for borrowed money owing to W or any of its Affiliates and transactions pursuant to any such contract, agreement or arrangement entered into on or prior to the date hereof), with any Affiliate, (ii) engage in any transaction, or enter into any contract, agreement or arrangement, with any portfolio company of W that is not on arm's length terms and in the ordinary course of business, or (iii) amend, waive or relinquish any rights relating to any such transaction, contract, agreement or arrangement referred to in clause (i) or (ii) that will remain outstanding after the Closing in accordance with Section 8.05;
(n) authorize any new capital expenditures which, individually, are greater than $100,000 or, in the aggregate, would cause total capital expenditures for year ending December 31, 2003 to exceed $500,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any capital expenditures in the ordinary course of business consistent with past practice;
(o) split, combine or reclassify any shares of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, other than (i) cash dividends and distributions by a wholly-owned Subsidiary to the Company or to a Subsidiary all of the capital stock which is owned directly or indirectly by the Company or (ii) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms; or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its securities or any securities of the Subsidiaries;
(p) (i) increase the compensation or fringe benefits of any Company Employee (except for (x) increases in salary or wages in the ordinary course of business consistent with past practice, (y) the payment of accrued or earned but unpaid bonuses and (z) stay bonuses or similar retention payments in an amount not to exceed $10,000 with respect to any individual payment and $100,000 in the aggregate with respect to all such payments), (ii) grant any severance or termination pay to any Company Employee, (iii) loan or advance any money or other property to any Company Employee (other than routine salary, travel and expense advances to Company Employees in the ordinary course of business and consistent with past practice), (iv) establish, adopt, enter into, amend or terminate any Company Plan, collective bargaining or labor agreement 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 of this Agreement (other than as may be required by the terms of an existing Company Plan or collective bargaining agreement, or as may be required by applicable law or in order to qualify under Sections 401 and 501 of the Code), or (v) grant any equity or equity-based awards, other than in the cases of clauses (i) through (v) pursuant to commitments of the Company or any Subsidiary existing on the date hereof required by contracts set forth in Section 4.08(k) or Section 4.12 of the Company Disclosure Schedule;
(q) pay, discharge or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business of liabilities reflected or reserved against in the consolidated financial statements of the Company referred to in Section 4.07 or liabilities incurred in the ordinary course of business;
(r) make or change any tax election or settle or compromise any income tax liability;
(s) other than in the ordinary course of business consistent with past practice, change any method of accounting, accounting policy or accounting practice, except for any such change required by reason of a concurrent change in GAAP as concurred with by the Company's independent auditors;
(t) fail to maintain insurance coverage at presently existing levels;
(u) make any repayments of principal to W or its Affiliates in respect of any Indebtedness owed to W or its Affiliates or any payment of interest accrued in respect of such Indebtedness;
(v) agree or commit to do any of the foregoing; or
(w) knowingly take or agree or commit omit to take any action that would make any representation and warranty of W or the Company hereunder inaccurate in any material respect atcould reasonably be expected to (i) constitute, or as be likely to result in, a breach of any time prior to, of the Closing, except for any representations or and warranties that are made as of a specified date.set forth in Section 4 or
Appears in 2 contracts
Samples: Reorganization Agreement (Lauder Ronald S), Reorganization Agreement (Central European Media Enterprises LTD)
Covenants Relating to Conduct of Business. Section 7.01. 5.1 Conduct of the Company. From the date hereof until Business by BFS and BTI Pending the Closing, the Company and the Subsidiaries shall conduct their business in the ordinary course consistent with past practice in compliance with all applicable laws and shall use their reasonable best efforts to preserve intact their business organizations and relationships with third parties and to keep available the services of their present officers and employees. Without limiting the generality of the foregoing, from the date hereof until the Closing and except Except as expressly contemplated by this Agreement or the other Transaction AgreementsAgreement, as may result from the consummation of the Transactions, as set forth in Section 7.01 of the Company Disclosure Schedule, or as otherwise consented to in writing by Parent (except if such consent would be inconsistent with applicable law), such consent not to be unreasonably withheld with respect BFS and BTI covenant and agree that prior to the granting of IRUs in fiber and/or conduit by the Company or the Subsidiaries, the Company shall not and shall cause the Subsidiaries not toClosing Date:
(a) adopt or propose any change BFS and BTI shall conduct their respective business and operations only in its articles the usual and ordinary course of incorporation, bylaws or other organizational documentsbusiness;
(b) Other than in the ordinary course of business and with the prior written consent of the Company, neither BFS nor BTI shall directly or indirectly do any of the following: (i) sell, pledge, dispose of or encumber any of their respective assets; (ii) amend or propose to amend their respective Articles of Incorporation or Bylaws; (iii) split, combine or reclassify any outstanding shares of their respective capital stock, or declare, set aside or, except as set forth on Schedule 5.1 (Dividends and Distributions), pay any dividend or other distribution payable in cash, stock, property or otherwise with respect to shares of their respective capital stock; (iv) redeem, purchase or acquire or offer to acquire any shares of their respective capital stock or other securities; (v) create any subsidiaries; or (vi) enter into or modify any contract, agreement, commitment or arrangement with respect to any of the foregoing;
(c) Other than in the ordinary course of business and with the prior written consent of the Company, neither BFS nor BTI shall (i) issue, deliver, sell, pledge or transfer dispose of, or authorize or propose the issuanceagree to issue, delivery, salesell, pledge or transfer of dispose of, any additional shares of its capital stock of any class or any securities convertible into or exercisable forof, or any rightsoptions, warrants, options conversion privileges or rights of any kind to acquire any shares of, their respective capital stock and/or other rights to acquire, any such shares BFS or enter into any agreement with respect to the foregoing other than (i) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms, BTI securities; (ii) as required by Contracts in effect as of the date of this Agreement that are listed in Section 4.05 of the Company Disclosure Schedule and (iii) the issuance of capital stock of the Company as a dividend in respect of Preferred Stock outstanding on the date hereof in accordance with its present terms;
(i) acquire (by merger, consolidation or consolidation, acquisition of stock or assetsassets or otherwise) any corporation, partnership or other business organization or division or the material assets thereof, (ii) sell, lease or otherwise dispose of a Subsidiary or ; (iii) sellincur any indebtedness for borrowed money, lease issue any debt securities or otherwise dispose of an amount of assets guarantee any indebtedness to others; or securities(iv) enter into or modify any contract, including IRUsagreement, for an amount in excess of $100,000 (or, commitment or arrangement with respect to switch software upgrades for purposes any of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), except for transactions in the ordinary course consistent with past practiceforegoing;
(d) merge Neither BFS nor BTI shall enter into any employment, severance or consolidate with similar agreements or arrangements with, or grant any other Personbonus, salary increase, severance or termination pay to, any of their respective officers or directors;
(e) make Neither BFS nor BTI shall adopt any investmentbonus, whether by purchase of profit sharing, compensation, stock option, pension, retirement, deferred compensation, employment or securitiesother employee benefit plan, contributions to capital agreement, trust, fund or any property transfer (other than investments in cash arrangement for the benefit or cash equivalents with a maturity of less than 90 days or investments in wholly-owned Subsidiaries made, in each case, in the ordinary course of business consistent with past practice), or purchase for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), any property or assets welfare of any other individual or entity, except for inventory purchased for resale in the ordinary course of business consistent with past practiceemployee;
(f) enter into BFS and BTI shall each (i) use its best efforts not to take any agreement action which would render, or arrangement that limits which reasonably may be expected to render, any representation or otherwise restricts warranty made by it in this Agreement untrue at any time prior to the Closing Date as if then made; and (ii) immediately notify the Company of any emergency or other change in the normal course of its business or in the operation of its properties and of any tax audits, tax claims, governmental or third party complaints, investigations or hearings (or communications indicating that the same may be contemplated) if such emergency, change, audit, claim, complaint, investigation or hearing would be material, individually or in the aggregate, to the financial condition, results of operations or business of BFS or BTI, or to the ability of any of the Subsidiaries or any of their respective Affiliates or successors thereto or that by its terms could, after parties hereto to consummate the Effective Time, limit or restrict Parent or the Company or any of their respective Affiliates or any successor thereto, from engaging or competing transactions described in any line of business or in any geographic areathis Agreement;
(g) other than in BFS and BTI shall each notify the ordinary course Company promptly of business consistent with past practice, waive, release or relinquish any material right;adverse event or circumstance affecting BFS or BTI (including the filing of any material litigation against BFS or BTI, the existence of any dispute with any person or entity which involves a reasonable likelihood of such litigation being commenced); and
(h) other than in the ordinary course of business consistent BFS and BTI shall each comply with past practice, modify or change in any material respect any existing material license, lease, contract, or other agreement;
(i) enter into any agreements involving aggregate expenditures or receipts of more than $100,000 individually or $500,000 in the aggregate (or, with respect all legal requirements and contractual obligations applicable to (i) any Cost of Services Contract, $1,000,000 its operations and (ii) switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any agreements in the ordinary course of business consistent with past practice, including but not limited to installation fees and customer premise equipment, in each case, associated with new customers and in the ordinary course of business consistent with past practice;
(j) create, incur or assume, or execute any new guarantee of, any Indebtedness in excess of $100,000 in the aggregate (other than indebtedness for borrowed money owing to W or any of its Affiliates) or prepay any Indebtedness;
(k) other than pursuant to arrangements existing on the date hereof, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for obligations of any other person (other than any Subsidiary) in an amount in excess of $100,000;
(l) make any loans or advances other than (i) loans or advances to wholly-owned Subsidiaries made in the ordinary course of business consistent with past practice and (ii) routine salary, travel and expense advances to Company Employees in the ordinary course of business consistent with past practice;
(i) engage in any transaction, or enter into any contract, agreement or arrangement (other than this Agreement, the Transactions and the incurrence of indebtedness for borrowed money owing to W or any of its Affiliates and transactions pursuant to any such contract, agreement or arrangement entered into on or prior to the date hereof), with any Affiliate, (ii) engage in any transaction, or enter into any contract, agreement or arrangement, with any portfolio company of W that is not on arm's length terms and in the ordinary course of business, or (iii) amend, waive or relinquish any rights relating to any such transaction, contract, agreement or arrangement referred to in clause (i) or (ii) that will remain outstanding after the Closing in accordance with Section 8.05;
(n) authorize any new capital expenditures which, individually, are greater than $100,000 or, in the aggregate, would cause total capital expenditures for year ending December 31, 2003 to exceed $500,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any capital expenditures in the ordinary course of business consistent with past practice;
(o) split, combine or reclassify any shares of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, other than (i) cash dividends and distributions by a wholly-owned Subsidiary to the Company or to a Subsidiary all of the capital stock which is owned directly or indirectly by the Company or (ii) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms; or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its securities or any securities of the Subsidiaries;
(p) (i) increase the compensation or fringe benefits of any Company Employee (except for (x) increases in salary or wages in the ordinary course of business consistent with past practice, (y) the payment of accrued or earned but unpaid bonuses and (z) stay bonuses or similar retention payments in an amount not to exceed $10,000 with respect to any individual payment and $100,000 in the aggregate with respect to all such payments), (ii) grant any severance or termination pay to any Company Employee, (iii) loan or advance any money or other property to any Company Employee (other than routine salary, travel and expense advances to Company Employees in the ordinary course of business and consistent with past practice), (iv) establish, adopt, enter into, amend or terminate any Company Plan, collective bargaining or labor agreement 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 of this Agreement (other than as may be required by the terms of an existing Company Plan or collective bargaining agreement, or as may be required by pay all applicable law or in order to qualify under Sections 401 and 501 of the Code), or (v) grant any equity or equity-based awards, other than in the cases of clauses (i) through (v) pursuant to commitments of the Company or any Subsidiary existing on the date hereof required by contracts set forth in Section 4.08(k) or Section 4.12 of the Company Disclosure Schedule;
(q) pay, discharge or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business of liabilities reflected or reserved against in the consolidated financial statements of the Company referred to in Section 4.07 or liabilities incurred in the ordinary course of business;
(r) make or change any tax election or settle or compromise any income tax liability;
(s) other than in the ordinary course of business consistent with past practice, change any method of accounting, accounting policy or accounting practice, except for any such change required by reason of a concurrent change in GAAP as concurred with by the Company's independent auditors;
(t) fail to maintain insurance coverage at presently existing levels;
(u) make any repayments of principal to W or its Affiliates in respect of any Indebtedness owed to W or its Affiliates or any payment of interest accrued in respect of such Indebtedness;
(v) agree or commit to do any of the foregoing; or
(w) knowingly take or agree or commit to take any action that would make any representation and warranty of W or the Company hereunder inaccurate in any material respect at, or as of any time prior to, the Closing, except for any representations or warranties that are made as of a specified datetaxes.
Appears in 2 contracts
Samples: Merger Agreement (Syndicated Food Service International Inc), Merger Agreement (Syndicated Food Service International Inc)
Covenants Relating to Conduct of Business. Section 7.01. 4.1 (a) Conduct of Business by CAX. Except as set forth in the Company. From CAX Disclosure Schedule or the CAX Filed SEC Documents, as otherwise expressly contemplated by this Agreement or as consented to by AIC in writing during the period from the date hereof until of this Agreement to the ClosingEffective Time, the Company CAX shall, and the shall cause its Subsidiaries shall conduct to, carry on their business respective businesses in the ordinary course consistent with past practice and in compliance in all material respects with all applicable laws and shall regulations and, to the extent consistent therewith, use their reasonable best efforts to preserve intact their current business organizations and relationships with third parties and CAX's status as a REIT, use reasonable efforts to keep available the services of their present current officers and employeesother employees and use reasonable efforts to preserve their relationships with those persons having business dealings with them. Without limiting the generality of the foregoingforegoing (but subject to the above exceptions), during the period from the date hereof until the Closing and except as expressly contemplated by of this Agreement or to the other Transaction AgreementsEffective Time, as may result from the consummation of the Transactions, as set forth in Section 7.01 of the Company Disclosure Schedule, or as otherwise unless consented to by AIC in writing by Parent (except if such consent would be inconsistent with applicable law)writing, such consent not to be unreasonably withheld with respect to the granting of IRUs in fiber and/or conduit by the Company or the SubsidiariesCAX shall not, the Company and shall not and shall cause the permit any of its Subsidiaries not to:
(ai) adopt other than dividends and distributions by a direct or propose indirect wholly owned Subsidiary of CAX to its parent, or regularly scheduled dividends by a Subsidiary that is partially owned by CAX or any change in its articles of incorporation, bylaws or other organizational documents;
(b) issue, deliver, sell, pledge or transfer or authorize or propose the issuance, delivery, sale, pledge or transfer of any shares of its capital stock of any class Subsidiaries, provided that CAX or any securities convertible into such Subsidiary receives or exercisable foris to receive its proportionate share thereof, (x) declare, set aside or pay any rightsdividends on, warrantsmake any other distributions in respect of, options or other rights to acquire, any such shares or enter into any agreement with respect to the foregoing other than voting of, any of its capital stock (iexcept for regular quarterly cash dividends on CAX Common Stock not significantly in excess of the dividends declared in the first and second quarters of 1999 and any dividends which may be required under the Code to maintain CAX's status as a REIT ), (y) split, combine or reclassify any of its capital stock or issue or authorize the issuance of Company any other securities in respect of, in lieu of or in substitution for shares of its capital stock, except for issuances of CAX Common Stock upon the exercise of stock options or warrants, or conversion CAX Stock Options that are outstanding as of Preferred Stock, outstanding on the date hereof of this Agreement in accordance with their present terms, (ii) as required by Contracts in effect as of the date of this Agreement that are listed in Section 4.05 of the Company Disclosure Schedule and (iii) the issuance of capital stock of the Company as a dividend in respect of Preferred Stock outstanding on the date hereof in accordance with its present terms;
(i) acquire (by merger, consolidation or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof, (ii) sell, lease or otherwise dispose of a Subsidiary or (iii) sell, lease or otherwise dispose of an amount of assets or securities, including IRUs, for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), except for transactions in the ordinary course consistent with past practice;
(d) merge or consolidate with any other Person;
(e) make any investment, whether by purchase of stock or securities, contributions to capital or any property transfer (other than investments in cash or cash equivalents with a maturity of less than 90 days or investments in wholly-owned Subsidiaries made, in each case, in the ordinary course of business consistent with past practice), or purchase for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), any property or assets of any other individual or entity, except for inventory purchased for resale in the ordinary course of business consistent with past practice;
(f) enter into any agreement or arrangement that limits or otherwise restricts the Company or any of the Subsidiaries or any of their respective Affiliates or successors thereto or that by its terms could, after the Effective Time, limit or restrict Parent or the Company or any of their respective Affiliates or any successor thereto, from engaging or competing in any line of business or in any geographic area;
(gz) other than in the ordinary course of business consistent business, purchase, redeem or otherwise acquire any shares of capital stock of CAX or any of its Subsidiaries or any other securities thereof or any rights, warrants or options to acquire any such shares or other securities; provided, however, that CAX shall be permitted to issue CAX Stock Options under CAX Benefit Plans, exercisable for up to 100,000 shares of CAX Common Stock with past practice, waive, release exercise prices equal to or relinquish any material rightgreater than the market price for CAX Common Stock on the date of issuance;
(hii) other than in the ordinary course of business consistent with past practicebusiness, modify or change in any material respect any existing material licenseissue, leasedeliver, contractsell, or other agreement;
(i) enter into any agreements involving aggregate expenditures or receipts of more than $100,000 individually or $500,000 in the aggregate (or, with respect to (i) any Cost of Services Contract, $1,000,000 and (ii) switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any agreements in the ordinary course of business consistent with past practice, including but not limited to installation fees and customer premise equipment, in each case, associated with new customers and in the ordinary course of business consistent with past practice;
(j) create, incur or assume, or execute any new guarantee of, any Indebtedness in excess of $100,000 in the aggregate (other than indebtedness for borrowed money owing to W or any of its Affiliates) or prepay any Indebtedness;
(k) other than pursuant to arrangements existing on the date hereof, assume, guarantee, endorse pledge or otherwise become liable encumber or responsible (whether directly, contingently or otherwise) for obligations of any other person (other than any Subsidiary) in an amount in excess of $100,000;
(l) make any loans or advances other than (i) loans or advances to wholly-owned Subsidiaries made in the ordinary course of business consistent with past practice and (ii) routine salary, travel and expense advances to Company Employees in the ordinary course of business consistent with past practice;
(i) engage in any transaction, or enter into any contract, agreement or arrangement (other than this Agreement, the Transactions and the incurrence of indebtedness for borrowed money owing to W or any of its Affiliates and transactions pursuant subject to any such contract, agreement or arrangement entered into on or prior to the date hereof), with any Affiliate, (ii) engage in any transaction, or enter into any contract, agreement or arrangement, with any portfolio company of W that is not on arm's length terms and in the ordinary course of business, or (iii) amend, waive or relinquish any rights relating to any such transaction, contract, agreement or arrangement referred to in clause (i) or (ii) that will remain outstanding after the Closing in accordance with Section 8.05;
(n) authorize any new capital expenditures which, individually, are greater than $100,000 or, in the aggregate, would cause total capital expenditures for year ending December 31, 2003 to exceed $500,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any capital expenditures in the ordinary course of business consistent with past practice;
(o) split, combine or reclassify Lien any shares of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, other than (i) cash dividends and distributions by a wholly-owned Subsidiary to the Company or to a Subsidiary all of the capital stock which is owned directly or indirectly by the Company or (ii) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms; or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its voting securities or any securities of the Subsidiaries;
(p) (i) increase the compensation convertible into, or fringe benefits of any Company Employee (except for (x) increases in salary rights, warrants or wages in the ordinary course of business consistent with past practiceoptions to acquire, (y) the payment of accrued any such shares, voting securities or earned but unpaid bonuses and (z) stay bonuses or similar retention payments in an amount not to exceed $10,000 with respect to any individual payment and $100,000 in the aggregate with respect to all such payments), (ii) grant any severance or termination pay to any Company Employee, (iii) loan or advance any money or other property to any Company Employee convertible securities (other than routine salary, travel and expense advances to Company Employees in the ordinary course issuance of business and consistent with past practice), (iv) establish, adopt, enter into, amend or terminate any Company Plan, collective bargaining or labor agreement or any plan, agreement, program, policy, trust, fund or other arrangement CAX Common Stock upon the exercise of CAX Stock Options that would be a Company Plan if it were in existence are outstanding as of the date of this Agreement or issued in accordance with this Agreement);
(iii) amend its certificate of incorporation, by-laws or other than as may be required by the terms of an existing Company Plan comparable organizational or collective bargaining agreementgoverning documents; and
(iv) authorize, or as may be required by applicable law commit or in order agree to qualify under Sections 401 and 501 take, any of the Code)foregoing actions; provided, or (v) grant any equity or equity-based awards, other than in that the cases of clauses (i) through (v) pursuant to commitments of the Company or any Subsidiary existing on the date hereof required by contracts limitations set forth in this Section 4.08(k4.1(a) shall not apply to any transaction between CAX and any wholly owned Subsidiary or Section 4.12 between any wholly owned Subsidiaries of the Company Disclosure Schedule;
(q) pay, discharge or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business of liabilities reflected or reserved against in the consolidated financial statements of the Company referred to in Section 4.07 or liabilities incurred in the ordinary course of business;
(r) make or change any tax election or settle or compromise any income tax liability;
(s) other than in the ordinary course of business consistent with past practice, change any method of accounting, accounting policy or accounting practice, except for any such change required by reason of a concurrent change in GAAP as concurred with by the Company's independent auditors;
(t) fail to maintain insurance coverage at presently existing levels;
(u) make any repayments of principal to W or its Affiliates in respect of any Indebtedness owed to W or its Affiliates or any payment of interest accrued in respect of such Indebtedness;
(v) agree or commit to do any of the foregoing; or
(w) knowingly take or agree or commit to take any action that would make any representation and warranty of W or the Company hereunder inaccurate in any material respect at, or as of any time prior to, the Closing, except for any representations or warranties that are made as of a specified dateCAX.
Appears in 2 contracts
Samples: Merger Agreement (Asset Investors Corp), Merger Agreement (Commercial Assets Inc)
Covenants Relating to Conduct of Business. Section 7.014. Conduct 1Conduct of Business of Holding Company and Bank Subsidiary Pending the CompanyMerger. From the date hereof until the ClosingEffective Time, the Company and the Subsidiaries shall conduct their business in the ordinary course consistent with past practice in compliance with all applicable laws and shall use their reasonable best efforts to preserve intact their business organizations and relationships with third parties and to keep available the services of their present officers and employees. Without limiting the generality of the foregoing, from the date hereof until the Closing and except as expressly contemplated or permitted by this Agreement or the other Transaction AgreementsAgreement, as may result from the consummation of the Transactionsrequired by applicable law or regulation, or as set forth in Section 7.01 Holding Company’s Disclosure Letter, without the prior written consent of the Company Disclosure Schedule, or as otherwise consented to in writing by Parent Xxxxx (except if such consent would be inconsistent with applicable law), such consent not to be unreasonably withheld with respect to or delayed), Holding Company agrees that it will not, and will cause each of the granting of IRUs in fiber and/or conduit by the Holding Company or the Subsidiaries, the Company shall not and shall cause the Subsidiaries not to:
(a) adopt Conduct its business and the business of the Holding Company Subsidiaries other than in the ordinary and usual course consistent with past practice or propose any change in fail to use its articles of incorporationcommercially reasonable efforts to maintain and preserve intact their (i) business organizations, bylaws or other organizational documents;material assets and employees and (ii) relationships with material customers, suppliers, employees and business associates.
(b) Take any action that would prevent or materially adversely affect or delay the ability of Towne, Holding Company or Bank Subsidiary (i) to obtain any necessary approvals, consents or waivers of any Governmental Authority or third party required for the transactions contemplated hereby, (ii) to perform its covenants and agreements under this Agreement, or (iii) to consummate the transactions contemplated hereby on a timely basis.
(c) Amend, repeal or modify its Organizational Documents.
(d) Other than pursuant to Rights outstanding as of the date hereof as disclosed in Section 3.3(d) of Holding Company’s Disclosure Letter, (i) issue, deliversell or otherwise permit to become outstanding, sell, pledge or transfer or authorize or propose the issuancecreation of, delivery, sale, pledge or transfer of any additional shares of its capital stock of any class or any securities convertible into or exercisable forstock, or any rightsRights with respect thereto, warrants, options or other rights to acquire, any such shares or (ii) enter into any agreement with respect to the foregoing foregoing, or (iii) permit any additional shares of capital stock to become subject to new grants of employee and director stock options, restricted stock, stock appreciation rights or similar or other than stock-based rights.
(e) Enter into or amend or renew any employment, consulting, severance, change in control, bonus, salary continuation or similar agreements or arrangements with any director, officer or employee of Holding Company or a Holding Company Subsidiary, or grant any salary or wage increase or increase any employee benefit (including by making incentive or bonus payments), except as set forth in Section 4.1(e) of Holding Company’s Disclosure Letter.
(f) Enter into, establish, adopt, amend, terminate or make any contributions to (except (i) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present termsas may be required by applicable law, (ii) as required by Contracts in effect to satisfy contractual obligations existing as of the date hereof and set forth in Section 4.1(f) of Holding Company’s Disclosure Letter, (iii) to conduct welfare benefit annual renewal in the ordinary course of business, or (iv) to comply with the requirements of this Agreement Agreement), any pension, retirement, stock option, restricted stock, stock purchase, savings, profit sharing, deferred compensation, consulting, bonus, group insurance or other employee benefit, incentive, welfare contract, plan or arrangement, or any trust agreement related thereto, in respect of any directors, officers or employees, including without limitation taking any action that are listed accelerates, or the lapsing of restrictions with respect to, the vesting or exercise of any benefits payable thereunder.
(g) Exchange, cancel, borrow from, surrender, or increase or decrease the death benefit provided under, or otherwise amend or terminate, any existing bank or corporate owned life insurance covering any current or former employee of Holding Company or any of the Holding Company Subsidiaries, other than any increase in the death benefit in the ordinary course of business consistent with past practice, or any such change that is required by law.
(h) Hire any person as an employee of Holding Company or a Holding Company Subsidiary or promote any employee, except (i) to satisfy contractual obligations existing as of the date hereof and set forth in Section 4.05 4.1(h) of Holding Company’s Disclosure Letter and (ii) persons whose employment is terminable at the will of Holding Company and who are not contractually entitled to severance or similar benefits or payments that would become payable as a result of the Transaction or the consummation thereof (other than severance or similar benefits provided pursuant to Section 5.10(c) of this Agreement).
(i) Incur any material obligation, indebtedness or liability (whether absolute or contingent, excluding suits instituted against it), make any pledge or encumber any of its material assets, dispose of any of its material assets in any other manner, or assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other person (other than any wholly owned Holding Company Disclosure Schedule Subsidiary) except in the ordinary course of its business and substantially on arm’s length terms, except as otherwise specifically permitted in this Agreement.
(j) Make, declare, pay or set aside for payment any dividend on or in respect of, or declare or make any distribution on any shares of its stock, or directly or indirectly adjust, split, combine, redeem, reclassify, purchase or otherwise acquire, any shares of its capital stock, provided, however, that (i) Holding Company may declare and pay its regular quarterly cash dividends in an amount not to exceed $0.18 per issued and outstanding share of Holding Company Common Stock per quarter and (ii) Bank Subsidiary may declare and pay dividends and distributions to Holding Company in the ordinary course of business consistent with past practice.
(k) Make any capital expenditures, other than capital expenditures in the ordinary course of business consistent with past practice, in amounts not exceeding $50,000 individually or $150,000 in the aggregate.
(l) Implement, or adopt, any change in its Tax or financial accounting principles, practices or methods, including reserving methodologies, other than as may be required by GAAP, regulatory accounting guidelines or applicable law.
(m) Notwithstanding anything herein to the contrary, knowingly take, or knowingly omit to take, any action that is reasonably likely to result in any of the conditions to the Transaction set forth in Article 6 not being satisfied on a timely basis, except as may be required by applicable law.
(n) Sell, transfer, mortgage, encumber or otherwise dispose of or discontinue any portion of its assets, deposits, business or properties except for (i) OREO properties sold in the ordinary course of business consistent with past practice, (ii) investment securities in the ordinary course of business consistent with past practice, and (iii) the issuance of capital stock of the Company as a dividend in respect of Preferred Stock outstanding on the date hereof in accordance with its present terms;
(i) acquire (by merger, consolidation or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof, (ii) sell, lease or otherwise dispose of a Subsidiary or (iii) sell, lease or otherwise dispose of an amount of assets or securities, including IRUs, for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), except for transactions in the ordinary course of business consistent with past practice;practice in amounts that do not exceed $50,000 individually or $100,000 in the aggregate.
(do) merge or consolidate with any other Person;
(e) make any investment, whether by purchase of stock or securities, contributions to capital Acquire all or any property transfer portion of the assets, business, securities (other than investments in cash or cash equivalents with a maturity of less than 90 days or investments in wholly-owned Subsidiaries made, in each case, excluding investment securities in the ordinary course of business consistent with past practice), deposits or purchase for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), any property or assets properties of any other individual person, including without limitation, by merger or entity, consolidation or by investment in a partnership or joint venture except for inventory purchased for resale (i) such acquisitions by way of foreclosures or acquisitions of control in a bona fide fiduciary capacity or in satisfaction of debts previously contracted in good faith and in the ordinary course of business consistent with past practice;; and (ii) such other acquisitions in the ordinary course of business consistent with past practice in amounts that do not exceed $50,000 individually or $100,000 in the aggregate.
(fp) Except as otherwise permitted under this Section 4.1, (i) enter into into, extend or materially amend or modify any agreement material agreement, lease or arrangement that limits license relating to real property, personal property, data security or otherwise restricts the cybersecurity, data processing, electronic banking mobile banking or bankcard functions; and (ii) enter into, amend, modify, cancel, fail to renew, terminate or waive any material provision of, any Holding Company Contract or any of agreement, contract, lease, license, arrangement, commitment or understanding (not covered by (i) and whether written or oral) that would constitute a Holding Company Contract if entered into prior to the Subsidiaries or any of their respective Affiliates or successors thereto or that by its terms coulddate hereof, after the Effective Time, limit or restrict Parent or the Company or any of their respective Affiliates or any successor thereto, from engaging or competing in any line of business or in any geographic area;
(g) other than in the ordinary course of business consistent with past practicepractice or for the non-renewal or termination of a Holding Company Contract upon expiration of its term.
(q) Enter into any settlements or similar agreements with respect to any actions, waivesuits, release proceedings, orders or relinquish investigations to which Holding Company or a Holding Company Subsidiary is or becomes a party after the date of this Agreement, which settlements, agreements or actions involve payment by Holding Company and the Holding Company Subsidiaries collectively of an amount that exceeds $50,000 individually or $100,000 in the aggregate and/or would impose any material right;restriction on the business of Holding Company or any Holding Company Subsidiary.
(hr) Enter into any new material line of business; introduce any material new products or services; make any material change to deposit products or deposit gathering or retention policies or strategies; change its material lending, investment, underwriting, pricing, servicing, risk and asset liability management and other material banking, operating or board policies or otherwise fail to materially follow such policies, except as required by applicable law, regulation or policies imposed by any Governmental Authority, or change the manner in which its investment securities or loan portfolio is classified or reported, except as required by applicable law, regulation or policies imposed by any Governmental Authority; fail to use commercially reasonable means to avoid any material increase in its aggregate exposure to interest rate risk; or invest in any mortgage-backed or mortgage-related security that would be considered “high risk” under applicable regulatory guidance; or file any application or enter into any contract with respect to the opening, relocation or closing of, or open, relocate or close, any branch, office, service center or other facility.
(s) Materially restructure or materially change its investment securities or derivatives portfolio or its interest rate exposure, through purchases, sales or otherwise, or purchase any investment security rated below investment grade, in all cases except as provided in its currently existing investment policies and in accordance with prudent investment practices in the ordinary course of business consistent with past practice.
(t) Introduce any material marketing campaigns or any material new sales compensation or incentive programs or arrangements (except those the material terms of which have been fully disclosed in writing to, and approved by, Towne prior to the date hereof).
(u) (i) Make, renew, restructure or otherwise modify any Loan other than Loans that are made in the ordinary course of business consistent with past practice (excluding participations) or Loans that were previously acquired in the ordinary course of business consistent with past practice, modify or change in each case originated in compliance with Holding Company’s and Bank Subsidiary’s internal loan policies and that have (x) in the case of unsecured Loans, a principal balance not in excess of $500,000, (y) in the case of secured Loans, a principal balance not in excess of $3,500,000 and (z) total exposure to the borrower and its affiliates not in excess of $7,000,000; (ii) except in the ordinary course of business, take any action that would result in any material respect any existing material license, lease, contract, discretionary release of collateral or other agreement;
guarantees or otherwise restructure the respective amounts set forth in clause (i) above; (iii) enter into any agreements involving aggregate expenditures Loan securitization or receipts of more than create any special purpose funding entity; or (iv) purchase or otherwise acquire any Loans from unaffiliated third parties, except for transactions that do not exceed $100,000 5,000,000 individually or $500,000 10,000,000 in the aggregate and acquisitions in satisfaction of debts previously contracted in good faith. In the event that Towne’s prior written consent is required pursuant to clause (ori) above, Towne shall use its commercially reasonable efforts to provide such consent within two (2) business days of any request by Holding Company.
(v) Incur any indebtedness for borrowed money, or assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other person, other than with respect to (i) any Cost borrowings from the Federal Home Loan Bank of Services Contract, $1,000,000 and (ii) switch software upgrades for purposes Atlanta or existing federal funds accommodation lines of compliance credit with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any agreements correspondent banks in the ordinary course of business consistent with past practice, including but not limited to installation fees ; and customer premise equipment, in each case, associated with new customers (ii) the collection of checks and other negotiable instruments in the ordinary course of business consistent with past practice;.
(jw) create, incur Enter into or assume, or execute settle any new guarantee of, any Indebtedness in excess of $100,000 in the aggregate (Derivative Contract other than indebtedness for borrowed money owing contracts used to W or any of its Affiliates) or prepay any Indebtedness;
(k) other than pursuant to arrangements existing on the date hereof, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for obligations of any other person (other than any Subsidiary) in an amount in excess of $100,000;
(l) make any loans or advances other than (i) loans or advances to wholly-owned Subsidiaries made hedge mortgage rate risk in the ordinary course of business consistent with past practice and as currently conducted.
(iix) routine salaryMake any investment or commitment to invest in real estate or in any real estate development project (other than as a Loan or by way of foreclosure or acquisitions in a bona fide fiduciary capacity or in satisfaction of a debt previously contracted in good faith, travel and expense advances to Company Employees in each case in the ordinary course of business consistent with past practice;).
(iy) engage in Make, change or revoke any transactionmaterial Tax election, change an annual Tax accounting period, settle or compromise any material Tax liability of Holding Company, agree to an extension or waiver of the statute of limitations with respect to the assessment or determination of a material amount of Taxes of Holding Company, enter into any contract, closing agreement or arrangement (other than this Agreement, the Transactions and the incurrence of indebtedness for borrowed money owing to W or any of its Affiliates and transactions pursuant to any such contract, agreement or arrangement entered into on or prior to the date hereof), with any Affiliate, (ii) engage in any transaction, or enter into any contract, agreement or arrangement, with any portfolio company of W that is not on arm's length terms and in the ordinary course of business, or (iii) amend, waive or relinquish any rights relating to any such transaction, contract, agreement or arrangement referred to in clause (i) or (ii) that will remain outstanding after the Closing in accordance with Section 8.05;
(n) authorize any new capital expenditures which, individually, are greater than $100,000 or, in the aggregate, would cause total capital expenditures for year ending December 31, 2003 to exceed $500,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any capital expenditures in the ordinary course of business consistent with past practice;
(o) split, combine or reclassify any shares of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, other than (i) cash dividends and distributions by a wholly-owned Subsidiary to the Company or to a Subsidiary all of the capital stock which is owned directly or indirectly by the Company or (ii) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms; or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its securities or any securities of the Subsidiaries;
(p) (i) increase the compensation or fringe benefits of any Company Employee (except for (x) increases in salary or wages in the ordinary course of business consistent with past practice, (y) the payment of accrued or earned but unpaid bonuses and (z) stay bonuses or similar retention payments in an amount not to exceed $10,000 with respect to any individual payment and $100,000 in the aggregate with respect material amount of Taxes or surrender any right to all such payments)claim a material Tax refund, (ii) grant any severance adopt or termination pay to any Company Employee, (iii) loan or advance any money or other property to any Company Employee (other than routine salary, travel and expense advances to Company Employees in the ordinary course of business and consistent with past practice), (iv) establish, adopt, enter into, amend or terminate any Company Plan, collective bargaining or labor agreement 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 of this Agreement (other than as may be required by the terms of an existing Company Plan or collective bargaining agreement, or as may be required by applicable law or in order to qualify under Sections 401 and 501 of the Code), or (v) grant any equity or equity-based awards, other than in the cases of clauses (i) through (v) pursuant to commitments of the Company or any Subsidiary existing on the date hereof required by contracts set forth in Section 4.08(k) or Section 4.12 of the Company Disclosure Schedule;
(q) pay, discharge or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business of liabilities reflected or reserved against in the consolidated financial statements of the Company referred to in Section 4.07 or liabilities incurred in the ordinary course of business;
(r) make or change any tax election or settle or compromise any income tax liability;
(s) other than in the ordinary course of business consistent with past practice, change any method of accountingaccounting with respect to Taxes, accounting policy or accounting practicefile any amended Tax Return.
(z) Foreclose on or take a deed or title to any real estate, except for other than single-family residential properties, without first conducting an ASTM International E1527-13 Phase I Environmental Site Assessment (or any applicable successor standard) of the property that satisfies the requirements of 40 C.F.R. Part 312, or foreclose on or take a deed or title to any real estate other than single-family residential properties if such change required by reason environmental assessment indicates the presence or likely presence of any Hazardous 40 Substances under conditions that indicate an existing release, a past release, or a material threat of a concurrent change in GAAP as concurred with by release of any Hazardous Substances into structures on the Company's independent auditors;property or into the ground, ground water, or surface water of the property.
(taa) fail to maintain insurance coverage at presently existing levels;
(u) make any repayments of principal to W Merge or its Affiliates in respect of any Indebtedness owed to W consolidate itself or its Affiliates or any payment of interest accrued in respect of such Indebtedness;
(v) agree or commit to do any of the foregoing; orHolding Company Subsidiaries with any other person, or restructure, reorganize or completely or partially liquidate or dissolve it or any of the Holding Company Subsidiaries.
(wbb) knowingly take or agree or commit to take Take any other action that would make any representation and or warranty in Section 3.3 hereof untrue, taking into account the standard set forth in Section 3.2.
(cc) Agree to take any of W or the Company hereunder inaccurate in any material respect at, or as of any time prior to, the Closing, except for any representations or warranties that are made as of a specified dateactions prohibited by this Section 4.1.
Appears in 2 contracts
Samples: Merger Agreement (Village Bank & Trust Financial Corp.), Merger Agreement (Village Bank & Trust Financial Corp.)
Covenants Relating to Conduct of Business. Section 7.01. 5.1 Conduct of Business by the CompanyCompany Pending the Merger. From Except as otherwise expressly contemplated by this Agreement or as described in the Company Disclosure Letter, during the period from the date hereof until of this Agreement through the ClosingEffective Time, the Company shall, and shall cause its Subsidiaries to, in all material respects carry on their respective businesses in, and not enter into any material transaction other than in accordance with, the Subsidiaries shall conduct their business in the regular and ordinary course and, to the extent consistent with past practice in compliance with all applicable laws and shall therewith, use their its reasonable best efforts to preserve intact their current business organizations and relationships with third parties and to organizations, keep available the services of their present current officers and employeesemployees and preserve their relationships with customers, suppliers and others having business dealings with them. Without limiting the generality of the foregoing, from the date hereof until the Closing and and, except as otherwise expressly contemplated by this Agreement or the other Transaction Agreements, as may result from the consummation of the Transactions, as set forth described in Section 7.01 of the Company Disclosure Schedule, or as otherwise consented to in writing by Parent (except if such consent would be inconsistent with applicable law), such consent not to be unreasonably withheld with respect to the granting of IRUs in fiber and/or conduit by the Company or the SubsidiariesLetter, the Company shall not not, and shall cause not permit any of its Subsidiaries to, without the Subsidiaries not toprior written consent of Parent:
(a) adopt (x) declare, set aside or propose pay any change dividends on, or make any other actual, constructive or deemed distributions in respect of, any of its articles capital stock, or otherwise make any payments to stockholders of incorporationthe Company in their capacity as such, bylaws other than dividends payable to the Company declared by any of the Company's Subsidiaries, (y) 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 (z) 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 organizational documentssecurities;
(b) issue, deliver, sell, pledge pledge, dispose of or transfer or authorize or propose the issuance, delivery, sale, pledge or transfer of otherwise encumber any shares of its capital stock of stock, any class other voting securities or equity equivalent or any securities convertible into or exchangeable or exercisable for, or any rights, warrants, warrants or options or other rights to acquire, any such shares shares, voting securities or convertible securities or equity equivalent (other than, in the case of the Company, the issuance of Shares during the period from the date of this Agreement through the Effective Time upon the exercise of Stock Options outstanding (as set forth in Section 4.2) on the date of this Agreement in accordance with their current terms or enter into any agreement or contract with respect to the foregoing other than (i) the sale or issuance of Company Common Stock upon exercise any of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms, (ii) as required by Contracts in effect as of the date of this Agreement that are listed in Section 4.05 of the Company Disclosure Schedule and (iii) the issuance of capital stock of the Company as a dividend in respect of Preferred Stock outstanding on the date hereof in accordance with its present termssecurities;
(ic) amend its charter or bylaws or the Rights Agreement;
(d) acquire (or agree to acquire by mergermerging or consolidating with, consolidation or acquisition by purchasing assets of stock or assets) equity in, or by any other manner, any business or any corporation, partnership partnership, association or other business organization or division thereof, (ii) sell, lease thereof or otherwise dispose of a Subsidiary acquire or (iii) sell, lease or otherwise dispose of an amount of agree to acquire any assets or securities, including IRUs, for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), except for transactions in the ordinary course consistent with past practice;
(d) merge or consolidate with any other Person;
(e) make any investment, whether by purchase of stock or securities, contributions to capital or any property transfer (other than investments in cash or cash equivalents with a maturity of less than 90 days or investments in wholly-owned Subsidiaries made, in each case, in the ordinary course of business consistent with past practice);
(e) sell, lease or otherwise dispose of or agree to sell, lease or otherwise dispose of, any of its assets that are material, individually or in the aggregate, to the Company and its Subsidiaries taken as a whole;
(f) incur any indebtedness for borrowed money or guarantee any such indebtedness or issue or sell any debt securities or guarantee any debt securities of others, except for borrowings or guarantees incurred in the ordinary course of business consistent with past practice for working capital purposes, or purchase for an amount in excess of $100,000 (ormake any loans, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Actadvances or capital contributions to, $1,000,000)or investments in, any property or assets of any other individual person or entity, except for inventory purchased for resale other than to the Company or any wholly owned Subsidiary of the Company and other than in the ordinary course of business consistent with past practice;
(fg) alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any Subsidiary of the Company or adopt any plan with respect to any of the foregoing;
(h) grant any severance or termination pay not currently required to be paid under existing severance plans or enter into or adopt, or amend any existing, severance plan, agreement or arrangement that limits or otherwise restricts the Company or any of the Subsidiaries or any of their respective Affiliates or successors thereto or that by its terms couldor, after the Effective Time, limit or restrict Parent or the Company or any of their respective Affiliates or any successor thereto, from engaging or competing in any line of business or in any geographic area;
(g) other than in the ordinary course of business consistent with past practicebusiness, waiveenter into or amend any employee benefit plan (including without limitation, release or relinquish any material right;
(h) other than in the ordinary course of business consistent with past practice, modify or change in any material respect any existing material license, lease, contractStock Option Plans), or other enter into or amend employment or consulting agreement;
(i) enter into any agreements involving aggregate contract or commitment with respect to capital expenditures with a value in excess of, or receipts of more than requiring expenditures by the Company and its Subsidiaries in excess of, $100,000 individually 100,000, individually, or enter into contracts or commitments with respect to capital expenditures with a value in excess of, or requiring expenditures by the Company and its Subsidiaries in excess of, $500,000 500,000, in the aggregate aggregate;
(orj) except to the extent required under existing employee and director benefit plans, agreements or arrangements as in effect on the date of this Agreement, increase the compensation or fringe benefits of any of its directors, officers or employees provided that, with respect to (i) any Cost of Services Contractemployees that are not executive officers or directors, $1,000,000 and (ii) switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any agreements in the ordinary course of business consistent with past practice, including but not limited to installation fees and customer premise equipment, in each case, Company may increase compensation associated with new customers promotions and regular reviews in the ordinary course of business consistent with past practice;
(j) create, incur or assume, or execute any new guarantee of, any Indebtedness in excess of $100,000 in the aggregate (other than indebtedness for borrowed money owing to W or any of its Affiliates) or prepay any Indebtedness;
(k) other than pursuant agree to arrangements existing on the date hereof, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for obligations settlement of any other person (other than any Subsidiary) in an amount in excess of $100,000material claim or litigation;
(l) make or rescind any loans material tax election or advances other than (i) loans settle or advances to wholly-owned Subsidiaries made in the ordinary course of business consistent with past practice and (ii) routine salary, travel and expense advances to Company Employees in the ordinary course of business consistent with past practicecompromise any material tax liability;
(im) engage except as required by applicable law or GAAP, make any material change in any transaction, or enter into any contract, agreement or arrangement (other than this Agreement, the Transactions and the incurrence its method of indebtedness for borrowed money owing to W or any of its Affiliates and transactions pursuant to any such contract, agreement or arrangement entered into on or prior to the date hereof), with any Affiliate, (ii) engage in any transaction, or enter into any contract, agreement or arrangement, with any portfolio company of W that is not on arm's length terms and in the ordinary course of business, or (iii) amend, waive or relinquish any rights relating to any such transaction, contract, agreement or arrangement referred to in clause (i) or (ii) that will remain outstanding after the Closing in accordance with Section 8.05accounting;
(n) authorize except as required under the Stock Option Plans and as otherwise provided in this Agreement, accelerate the payment, right to payment or vesting of any new capital expenditures whichbonus, individuallyseverance, are greater than $100,000 orprofit sharing, in the aggregateretirement, would cause total capital expenditures for year ending December 31deferred compensation, 2003 to exceed $500,000 (orstock option, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), insurance or other than any capital expenditures in the ordinary course of business consistent with past practicecompensation or benefits;
(o) split, combine or reclassify any shares of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, other than (i) cash dividends and distributions by a wholly-owned Subsidiary to the Company or to a Subsidiary all of the capital stock which is owned directly or indirectly by the Company or (ii) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms; or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its securities or any securities of the Subsidiaries;
(p) (i) increase the compensation or fringe benefits of any Company Employee (except for (x) increases in salary or wages in the ordinary course of business consistent with past practice, (y) the payment of accrued or earned but unpaid bonuses and (z) stay bonuses or similar retention payments in an amount not to exceed $10,000 with respect to any individual payment and $100,000 in the aggregate with respect to all such payments), (ii) grant any severance or termination pay to any Company Employee, (iii) loan or advance any money or other property to any Company Employee (other than routine salary, travel and expense advances to Company Employees in the ordinary course of business and consistent with past practice), (iv) establish, adopt, enter into, amend or terminate any Company Plan, collective bargaining or labor agreement 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 of this Agreement (other than as may be required by the terms of an existing Company Plan or collective bargaining agreement, or as may be required by applicable law or in order to qualify under Sections 401 and 501 of the Code), or (v) grant any equity or equity-based awards, other than in the cases of clauses (i) through (v) pursuant to commitments of the Company or any Subsidiary existing on the date hereof required by contracts set forth in Section 4.08(k) or Section 4.12 of the Company Disclosure Schedule;
(q) pay, discharge or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction (A) of any such claims, liabilities or obligations in the ordinary course of business and consistent with past practice or (B) of claims, liabilities or obligations reflected or reserved against in in, or contemplated by, the consolidated financial statements of (or the notes thereto) contained in the Company referred to in Section 4.07 or liabilities incurred in the ordinary course of businessSEC Documents;
(rp) make enter into any agreement, understanding or change commitment that restrains, limits or impedes the Company's or any tax election of its Subsidiaries' ability to compete with or settle conduct any business or compromise line of business, including, but not limited to, geographic limitations on the Company's or any income tax liabilityof its Subsidiaries' activities;
(sq) other than materially modify, amend or terminate any material contract to which it is a party or waive any of its material rights or claims except in the ordinary course of business consistent with past practice, change any method of accounting, accounting policy or accounting practice, except for any such change required by reason of a concurrent change in GAAP as concurred with by the Company's independent auditors;
(t) fail to maintain insurance coverage at presently existing levels;
(u) make any repayments of principal to W or its Affiliates in respect of any Indebtedness owed to W or its Affiliates or any payment of interest accrued in respect of such Indebtedness;
(v) agree or commit to do any of the foregoing; or
(wr) knowingly take agree, in writing or agree or commit otherwise, to take any action of the foregoing actions, provided, however, that would make any representation and warranty of W or nothing in this Section 5.1 shall be deemed as prohibiting the Company hereunder inaccurate from making such expenditure as it deems reasonably necessary to complete its Y2K Readiness Plan as set forth in any material respect at, or as Schedule 4.19 of any time prior to, the Closing, except for any representations or warranties that are made as of a specified dateCompany Disclosure Schedule.
Appears in 2 contracts
Samples: Merger Agreement (Floss Acquisitions Corp), Merger Agreement (First Commonwealth Inc)
Covenants Relating to Conduct of Business. Section 7.01. SECTION 4.1 Conduct of Business by Parent and the Company.
(a) Conduct of Business by Parent. From During the period from the date hereof until of this Agreement to the Closing, Effective Time and except (i) to the extent the Company and shall otherwise consent in writing (which consent will not be unreasonably withheld), (ii) as set forth in the Subsidiaries Parent Disclosure Schedule or (iii) as contemplated or permitted by or not inconsistent with this Agreement, Parent shall conduct their business carry on its businesses in the ordinary course consistent with past practice in compliance with all applicable laws and shall the manner as heretofore conducted and, to the extent consistent therewith, use their reasonable best efforts to preserve intact their its current business organizations and relationships with third parties and to organization, keep available the services of their present its current officers and employeesemployees and preserve its relationships with customers, suppliers, licensors, licensees, distributors and others having business dealings with it. Without limiting the generality of the foregoing, from the date hereof until the Closing and except as expressly contemplated by this Agreement or the other Transaction Agreements, as may result from the consummation of the Transactions, as set forth in Section 7.01 the Parent Disclosure Schedule or as contemplated or permitted by or not inconsistent with this Agreement, during the period from the date of this Agreement to the Effective Time, Parent shall not, without the written consent of the Company Disclosure Schedule(which consent will not be unreasonably withheld):
(i) (x) declare, set aside or pay any dividends on, or as make any other distributions in respect of, any of its capital stock, (y) 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 (z) purchase, redeem or otherwise consented acquire any shares of capital stock of Parent or any other securities thereof or any rights, warrants or options to in writing by Parent (except if acquire any such consent would be inconsistent with applicable law), such consent not to be unreasonably withheld with respect to the granting of IRUs in fiber and/or conduit by the Company or the Subsidiaries, the Company shall not and shall cause the Subsidiaries not to:
(a) adopt or propose any change in its articles of incorporation, bylaws shares or other organizational documentssecurities;
(bii) amend its Restated Certificate of Incorporation or Bylaws;
(iii) issue, deliver, sell, pledge or transfer or authorize or propose the issuance, delivery, sale, pledge or transfer of any shares of its capital stock of any class or any securities convertible into or exercisable for, or any rights, warrants, options or other rights to acquire, any such shares or enter into any agreement with respect to the foregoing other than (i) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms, (ii) as required by Contracts in effect as of the date of this Agreement that are listed in Section 4.05 of the Company Disclosure Schedule and (iii) the issuance of capital stock of the Company as a dividend in respect of Preferred Stock outstanding on the date hereof in accordance with its present terms;
(i) acquire (by merger, consolidation or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof, (ii) sell, lease or otherwise dispose of a Subsidiary or (iii) sell, lease or otherwise dispose of an amount of assets or securities, including IRUs, for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), except for transactions in the ordinary course consistent with past practice;
(d) merge or consolidate with any other Person;
(e) make any investment, whether by purchase of stock or securities, contributions to capital or any property transfer (other than investments in cash or cash equivalents with a maturity of less than 90 days or investments in wholly-owned Subsidiaries made, in each case, in the ordinary course of business consistent with past practice), or purchase for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), any property or assets of any other individual or entity, except for inventory purchased for resale in the ordinary course of business consistent with past practice;
(f) enter into any agreement or arrangement that limits or otherwise restricts the Company or any of the Subsidiaries or any of their respective Affiliates or successors thereto or that by its terms could, after the Effective Time, limit or restrict Parent or the Company or any of their respective Affiliates or any successor thereto, from engaging or competing in any line of business or in any geographic area;
(g) other than in the ordinary course of business consistent with past practice, waive, release or relinquish any material right;
(h) other than in the ordinary course of business consistent with past practice, modify or change in any material respect any existing material license, lease, contract, or other agreement;
(i) enter into any agreements involving aggregate expenditures or receipts of more than $100,000 individually or $500,000 in the aggregate (or, with respect to (i) any Cost of Services Contract, $1,000,000 and (ii) switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any agreements in the ordinary course of business consistent with past practice, including but not limited to installation fees and customer premise equipment, in each case, associated with new customers and in the ordinary course of business consistent with past practice;
(j) create, incur or assume, or execute any new guarantee of, any Indebtedness in excess of $100,000 in the aggregate (other than indebtedness for borrowed money owing to W or any of its Affiliates) or prepay any Indebtedness;
(k) other than pursuant to arrangements existing on the date hereof, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for obligations of any other person (other than any Subsidiary) in an amount in excess of $100,000;
(l) make any loans or advances other than (i) loans or advances to wholly-owned Subsidiaries made in the ordinary course of business consistent with past practice and (ii) routine salary, travel and expense advances to Company Employees in the ordinary course of business consistent with past practice;
(i) engage in any transaction, or enter into any contract, agreement or arrangement (other than this Agreement, the Transactions and the incurrence of indebtedness for borrowed money owing to W or any of its Affiliates and transactions pursuant to any such contract, agreement or arrangement entered into on or prior to the date hereof), with any Affiliate, (ii) engage in any transaction, or enter into any contract, agreement or arrangement, with any portfolio company of W that is not on arm's length terms and in the ordinary course of business, or (iii) amend, waive or relinquish any rights relating to any such transaction, contract, agreement or arrangement referred to in clause (i) or (ii) that will remain outstanding after the Closing in accordance with Section 8.05;
(n) authorize any new capital expenditures which, individually, are greater than $100,000 or, in the aggregate, would cause total capital expenditures for year ending December 31, 2003 to exceed $500,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any capital expenditures in the ordinary course of business consistent with past practice;
(o) split, combine or reclassify encumber any shares of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, other than (i) cash dividends and distributions by a wholly-owned Subsidiary to the Company or to a Subsidiary all of the capital stock which is owned directly or indirectly by the Company or (ii) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms; or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its voting securities or any securities of the Subsidiaries;
(p) (i) increase the compensation convertible into, or fringe benefits of any Company Employee (except for (x) increases in salary rights, warrants or wages in the ordinary course of business consistent with past practiceoptions to acquire, (y) the payment of accrued any such shares, voting securities or earned but unpaid bonuses and (z) stay bonuses or similar retention payments in an amount not to exceed $10,000 with respect to any individual payment and $100,000 in the aggregate with respect to all such payments), (ii) grant any severance or termination pay to any Company Employee, (iii) loan or advance any money or other property to any Company Employee convertible securities (other than routine salary, travel and expense advances to Company Employees in the ordinary course of business and consistent with past practice)practice pursuant to stock option plans, (iv) establish, adopt, enter into, amend or terminate any Company Plan, collective bargaining or labor agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Plan if it were employee stock purchase plans and convertible indebtedness in existence effect as of the date of this Agreement Agreement);
(other than as may be required iv) acquire or agree to acquire by the terms of an existing Company Plan merging or collective bargaining agreementconsolidating with, or as may be required by applicable law or in order to qualify under Sections 401 and 501 purchasing a substantial portion of the Codeassets of, or by any other manner (including through any of its subsidiaries), any business or any corporation, partnership, joint venture, association or other business organization or division thereof, except that this Section 4.1(a)(iv) shall not prohibit Parent from effecting an acquisition of any other business if (A) such acquisition would not materially affect the ability of Parent to, or materially delay Parent's ability to, complete the transactions contemplated by this Agreement, and (B) such acquisition would involve the issuance by Parent of equity securities and, when considered together with all other acquisitions effected by Parent, would not involve the issuance of more than 1,000,000 shares of Parent's capital stock or securities convertible into or exercisable for more than 1,000,000 shares of Parent's capital stock;
(v) grant sell, lease, license, mortgage or otherwise encumber or subject to any equity Lien or equity-based awards, other than in the cases otherwise dispose of clauses any substantial part of its (i) through (v) pursuant to commitments of the Company or any Subsidiary existing on the date hereof required by contracts set forth in Section 4.08(kof its subsidiaries') material properties, assets or Section 4.12 of the Company Disclosure Schedule;
(q) paybusiness, discharge or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction except sales made in the ordinary course of business and except for subjecting any of liabilities reflected or reserved against in the consolidated financial statements of the Company referred its properties to in Section 4.07 or liabilities incurred in the ordinary course of businessParent Permitted Liens;
(rvi) make or change any tax election or settle or compromise any income tax liability;
(s) other than in material payments outside the ordinary course of business consistent with past practice, change for purposes of settling any method of accounting, accounting policy or accounting practice, except for any such change required by reason of a concurrent change in GAAP as concurred with by the Company's independent auditorsdispute;
(tvii) fail allow Parent or any of its subsidiaries, or any significant portion of their respective businesses or assets, to maintain insurance coverage at presently existing levelsbe acquired (by merger, tender offer, purchase or otherwise);
(uviii) make enter into (directly or through any repayments of principal subsidiary) any transaction that is extraordinary in nature or magnitude (when compared to W or its Affiliates in respect of any Indebtedness owed to W or its Affiliates or any payment of interest accrued in respect of such Indebtedness;
(v) agree or commit to do any of the foregoingtransactions historically entered into by Parent); or
(wix) knowingly take authorize any of, or commit or agree or commit to take any action that would make any representation and warranty of W or the Company hereunder inaccurate in any material respect at, or as of any time prior toof, the Closing, except for any representations or warranties that are made as of a specified dateforegoing actions.
Appears in 1 contract
Samples: Merger Agreement (Mypoints Com Inc)
Covenants Relating to Conduct of Business. Section 7.01. SECTION 4.1 Conduct of Business by Parent and the Company. From ---------------------------------------------
(a) Conduct of Business by Parent. During the period from the date hereof until ----------------------------- of this Agreement to the Closing, Effective Time and except (i) to the extent the Company and shall otherwise consent in writing (which consent will not be unreasonably withheld), (ii) as set forth in the Subsidiaries Parent Disclosure Schedule or (iii) as contemplated or permitted by or not inconsistent with this Agreement, Parent shall conduct their business carry on its businesses in the ordinary course consistent with past practice in compliance with all applicable laws and shall the manner as heretofore conducted and, to the extent consistent therewith, use their reasonable best efforts to preserve intact their its current business organizations and relationships with third parties and to organization, keep available the services of their present its current officers and employeesemployees and preserve its relationships with customers, suppliers, licensors, licensees, distributors and others having business dealings with it. Without limiting the generality of the foregoing, from the date hereof until the Closing and except as expressly contemplated by this Agreement or the other Transaction Agreements, as may result from the consummation of the Transactions, as set forth in Section 7.01 the Parent Disclosure Schedule or as contemplated or permitted by or not inconsistent with this Agreement, during the period from the date of this Agreement to the Effective Time, Parent shall not, without the written consent of the Company Disclosure Schedule(which consent will not be unreasonably withheld):
(i) (x) declare, set aside or pay any dividends on, or as make any other distributions in respect of, any of its capital stock, (y) 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 (z) purchase, redeem or otherwise consented acquire any shares of capital stock of Parent or any other securities thereof or any rights, warrants or options to in writing by Parent (except if acquire any such consent would be inconsistent with applicable law), such consent not to be unreasonably withheld with respect to the granting of IRUs in fiber and/or conduit by the Company or the Subsidiaries, the Company shall not and shall cause the Subsidiaries not to:
(a) adopt or propose any change in its articles of incorporation, bylaws shares or other organizational documentssecurities;
(bii) amend its Restated Certificate of Incorporation or Bylaws;
(iii) issue, deliver, sell, pledge or transfer or authorize or propose the issuance, delivery, sale, pledge or transfer of any shares of its capital stock of any class or any securities convertible into or exercisable for, or any rights, warrants, options or other rights to acquire, any such shares or enter into any agreement with respect to the foregoing other than (i) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms, (ii) as required by Contracts in effect as of the date of this Agreement that are listed in Section 4.05 of the Company Disclosure Schedule and (iii) the issuance of capital stock of the Company as a dividend in respect of Preferred Stock outstanding on the date hereof in accordance with its present terms;
(i) acquire (by merger, consolidation or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof, (ii) sell, lease or otherwise dispose of a Subsidiary or (iii) sell, lease or otherwise dispose of an amount of assets or securities, including IRUs, for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), except for transactions in the ordinary course consistent with past practice;
(d) merge or consolidate with any other Person;
(e) make any investment, whether by purchase of stock or securities, contributions to capital or any property transfer (other than investments in cash or cash equivalents with a maturity of less than 90 days or investments in wholly-owned Subsidiaries made, in each case, in the ordinary course of business consistent with past practice), or purchase for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), any property or assets of any other individual or entity, except for inventory purchased for resale in the ordinary course of business consistent with past practice;
(f) enter into any agreement or arrangement that limits or otherwise restricts the Company or any of the Subsidiaries or any of their respective Affiliates or successors thereto or that by its terms could, after the Effective Time, limit or restrict Parent or the Company or any of their respective Affiliates or any successor thereto, from engaging or competing in any line of business or in any geographic area;
(g) other than in the ordinary course of business consistent with past practice, waive, release or relinquish any material right;
(h) other than in the ordinary course of business consistent with past practice, modify or change in any material respect any existing material license, lease, contract, or other agreement;
(i) enter into any agreements involving aggregate expenditures or receipts of more than $100,000 individually or $500,000 in the aggregate (or, with respect to (i) any Cost of Services Contract, $1,000,000 and (ii) switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any agreements in the ordinary course of business consistent with past practice, including but not limited to installation fees and customer premise equipment, in each case, associated with new customers and in the ordinary course of business consistent with past practice;
(j) create, incur or assume, or execute any new guarantee of, any Indebtedness in excess of $100,000 in the aggregate (other than indebtedness for borrowed money owing to W or any of its Affiliates) or prepay any Indebtedness;
(k) other than pursuant to arrangements existing on the date hereof, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for obligations of any other person (other than any Subsidiary) in an amount in excess of $100,000;
(l) make any loans or advances other than (i) loans or advances to wholly-owned Subsidiaries made in the ordinary course of business consistent with past practice and (ii) routine salary, travel and expense advances to Company Employees in the ordinary course of business consistent with past practice;
(i) engage in any transaction, or enter into any contract, agreement or arrangement (other than this Agreement, the Transactions and the incurrence of indebtedness for borrowed money owing to W or any of its Affiliates and transactions pursuant to any such contract, agreement or arrangement entered into on or prior to the date hereof), with any Affiliate, (ii) engage in any transaction, or enter into any contract, agreement or arrangement, with any portfolio company of W that is not on arm's length terms and in the ordinary course of business, or (iii) amend, waive or relinquish any rights relating to any such transaction, contract, agreement or arrangement referred to in clause (i) or (ii) that will remain outstanding after the Closing in accordance with Section 8.05;
(n) authorize any new capital expenditures which, individually, are greater than $100,000 or, in the aggregate, would cause total capital expenditures for year ending December 31, 2003 to exceed $500,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any capital expenditures in the ordinary course of business consistent with past practice;
(o) split, combine or reclassify encumber any shares of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, other than (i) cash dividends and distributions by a wholly-owned Subsidiary to the Company or to a Subsidiary all of the capital stock which is owned directly or indirectly by the Company or (ii) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms; or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its voting securities or any securities of the Subsidiaries;
(p) (i) increase the compensation convertible into, or fringe benefits of any Company Employee (except for (x) increases in salary rights, warrants or wages in the ordinary course of business consistent with past practiceoptions to acquire, (y) the payment of accrued any such shares, voting securities or earned but unpaid bonuses and (z) stay bonuses or similar retention payments in an amount not to exceed $10,000 with respect to any individual payment and $100,000 in the aggregate with respect to all such payments), (ii) grant any severance or termination pay to any Company Employee, (iii) loan or advance any money or other property to any Company Employee convertible securities (other than routine salary, travel and expense advances to Company Employees in the ordinary course of business and consistent with past practice)practice pursuant to stock option plans, (iv) establish, adopt, enter into, amend or terminate any Company Plan, collective bargaining or labor agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Plan if it were employee stock purchase plans and convertible indebtedness in existence effect as of the date of this Agreement (other than as may be required by the terms of an existing Company Plan or collective bargaining agreementAgreement, or as may be required pursuant to acquisitions of businesses involving the issuance by applicable law Parent of less than 1,000,000 shares in the aggregate for all such acquisitions);
(iv) acquire or in order agree to qualify under Sections 401 and 501 acquire by merging or consolidating with, or by purchasing a substantial portion of the Codeassets of, or by any other manner (including through any of its subsidiaries), any business or any corporation, partnership, joint venture, association or other business organization or division thereof, except that this Section 4.1(a)(iv) shall not prohibit Parent from effecting an acquisition of any other business if (A) such acquisition would not materially affect the ability of Parent to, or materially delay Parent's ability to, complete the transactions contemplated by this Agreement, and (B) such acquisition would involve the issuance by Parent of equity securities and, when considered together with all other acquisitions effected by Parent, would not involve the issuance of more than 1,000,000 shares of Parent's capital stock or securities convertible into or exercisable for more than 1,000,000 shares of Parent's capital stock;
(v) grant sell, lease, license, mortgage or otherwise encumber or subject to any equity Lien or equity-based awards, other than in the cases otherwise dispose of clauses any substantial part of its (i) through (v) pursuant to commitments of the Company or any Subsidiary existing on the date hereof required by contracts set forth in Section 4.08(kof its subsidiaries') material properties, assets or Section 4.12 of the Company Disclosure Schedule;
(q) paybusiness, discharge or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction except sales made in the ordinary course of business and except for subjecting any of liabilities reflected or reserved against in the consolidated financial statements of the Company referred its properties to in Section 4.07 or liabilities incurred in the ordinary course of businessParent Permitted Liens;
(rvi) make or change any tax election or settle or compromise any income tax liability;
(s) other than in material payments outside the ordinary course of business consistent with past practice, change for purposes of settling any method of accounting, accounting policy or accounting practice, except for any such change required by reason of a concurrent change in GAAP as concurred with by the Company's independent auditorsdispute;
(tvii) fail allow Parent or any of its subsidiaries, or any significant portion of their respective businesses or assets, to maintain insurance coverage at presently existing levelsbe acquired (by merger, tender offer, purchase or otherwise);
(uviii) make enter into (directly or through any repayments of principal subsidiary) any transaction that is extraordinary in nature or magnitude (when compared to W or its Affiliates in respect of any Indebtedness owed to W or its Affiliates or any payment of interest accrued in respect of such Indebtedness;
(v) agree or commit to do any of the foregoingtransactions historically entered into by Parent); or
(wix) knowingly take authorize any of, or commit or agree or commit to take any action that would make any representation and warranty of W or the Company hereunder inaccurate in any material respect at, or as of any time prior toof, the Closing, except for any representations or warranties that are made as of a specified dateforegoing actions.
Appears in 1 contract
Samples: Merger Agreement (Mandaric Milan)
Covenants Relating to Conduct of Business. Section 7.01. 6.1 Conduct of Business by the CompanyCompany Pending the Merger. From Except as otherwise expressly contemplated by this Agreement or as described in the Company Disclosure Letter, during the period from the date hereof until of this Agreement through the ClosingEffective Time, the Company shall, and the shall cause its Subsidiaries shall conduct to carry on their business respective businesses in the regular and ordinary course consistent with past practice in compliance with all applicable laws and shall use their reasonable best efforts to course, preserve intact their current business organizations and relationships with third parties and organizations, and, to the extent consistent therewith, use its commercially reasonable efforts, keep available the services of their present current officers and employeesemployees and preserve their relationships with customers, suppliers and others having business dealings with them. Without limiting the generality of the foregoing, from the date hereof until the Closing and and, except as otherwise expressly contemplated by this Agreement or the other Transaction Agreements, as may result from the consummation of the Transactions, as set forth described in Section 7.01 6.1 of the Company Disclosure ScheduleLetter, or as otherwise consented to in writing by Parent (except if such consent would be inconsistent with applicable law), such consent not to be unreasonably withheld with respect to during the granting period from the date of IRUs in fiber and/or conduit by this Agreement through the Company or the SubsidiariesEffective Time, the Company shall not not, and shall cause not permit any of its Subsidiaries to, without the Subsidiaries not toprior written consent of Parent:
(a) adopt (x) declare, set aside or propose pay any change dividends on, or make any other actual, constructive or deemed distributions in respect of, any of its articles capital stock, or otherwise make any payments to stockholders of incorporationthe Company in their capacity as such, bylaws other than dividends payable to the Company declared by any of the Company's Subsidiaries, (y) 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 (z) 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 organizational documentssecurities;
(b) issue, deliver, sell, pledge pledge, dispose of or transfer or authorize or propose the issuance, delivery, sale, pledge or transfer of otherwise encumber any shares of its capital stock of stock, any class other voting securities or equity equivalent or any securities convertible into or exchangeable or exercisable for, or any rights, warrants, warrants or options or other rights to acquire, any such shares shares, voting securities or enter into any agreement with respect to convertible securities or equity equivalent (other than, in the foregoing other than (i) case of the Company, the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on during the date hereof in accordance with their present terms, (ii) as required by Contracts in effect as of period from the date of this Agreement that are listed through the Effective Time upon the exercise of Stock Options outstanding (as set forth in Section 4.05 of the Company Disclosure Schedule and (iii4.2(a)) the issuance of capital stock of the Company as a dividend in respect of Preferred Stock outstanding on the date hereof of this Agreement in accordance with their current terms) or enter into any agreement or contract with respect to the sale or issuance of any of its present termssecurities;
(ic) amend its certificate of incorporation or bylaws or amend the certificate of incorporation and by-laws (or other organizational documents) of any of its Subsidiaries;
(d) acquire (or agree to acquire by mergermerging or consolidating with, consolidation or acquisition by purchasing assets of stock or assets) equity in, or by any other manner, any business or any corporation, partnership partnership, association or other business organization or division thereof, (ii) sell, lease thereof or otherwise dispose of a Subsidiary acquire or (iii) sell, lease or otherwise dispose of an amount of agree to acquire any assets or securities, including IRUs, for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), except for transactions in the ordinary course consistent with past practice;
(d) merge or consolidate with any other Person;
(e) make any investment, whether by purchase of stock or securities, contributions to capital or any property transfer (other than investments in cash or cash equivalents with a maturity of less than 90 days or investments in wholly-owned Subsidiaries made, in each case, in the ordinary course of business consistent with past practice);
(e) sell, lease or otherwise dispose of or agree to sell, lease or otherwise dispose of, any of its assets that are material, individually or in the aggregate, to the Company and its Subsidiaries taken as a whole;
(f) incur any indebtedness for borrowed money or guarantee any such indebtedness or issue or sell any debt securities or guarantee any debt securities of others, except for (i) borrowings or guarantees incurred in the ordinary course of business consistent with past practice for working capital purposes, (ii) indebtedness of any Subsidiary of the Company to the Company or to another Subsidiary of the Company, (iii) in replacement for existing or maturing debt so long as principal amount does not increase or (iv) other borrowings under existing lines of credit or loans in the ordinary course of business consistent with past practice, or purchase for an amount in excess of $100,000 (ormake any loans, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Actadvances or capital contributions to, $1,000,000)or investments in, any property or assets of any other individual person or entity, except for inventory purchased for resale other than to the Company or any wholly owned Subsidiary of the Company and other than in the ordinary course of business consistent with past practice;
(fg) alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any Subsidiary of the Company or adopt any plan with respect to any of the foregoing;
(h) grant any severance or termination pay not currently required to be paid under existing severance plans or agreements, enter into or adopt, or amend any existing, severance plan, agreement or arrangement that limits or otherwise restricts the Company or any of the Subsidiaries or any of their respective Affiliates or successors thereto or that by its terms couldor, after the Effective Time, limit or restrict Parent or the Company or any of their respective Affiliates or any successor thereto, from engaging or competing in any line of business or in any geographic area;
(g) other than in the ordinary course of business consistent with past practiceor as required by applicable law, waiveenter into or amend any employee benefit plan (including, release or relinquish any material right;
(h) other than in without limitation, the ordinary course of business consistent with past practice, modify or change in any material respect any existing material license, lease, contractCompany Stock Plan), or other enter into or amend any employment or consulting agreement;
(i) enter into any agreements involving aggregate expenditures contract or receipts of more than $100,000 individually or $500,000 in the aggregate (or, commitment with respect to (i) any Cost capital expenditures with a value in excess of, or requiring expenditures by the Company and its Subsidiaries in excess of Services Contract$100,000, $1,000,000 individually, or enter into contracts or commitments with respect to capital expenditures with a value in excess of, or requiring expenditures by the Company and (ii) switch software upgrades for purposes its Subsidiaries in excess of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any agreements in the ordinary course of business consistent with past practice, including but not limited to installation fees and customer premise equipment, in each case, associated with new customers and in the ordinary course of business consistent with past practiceaggregate;
(j) createexcept to the extent required under existing employee and director benefit plans, incur agreements or assumearrangements as in effect on the date of this Agreement, make any bonus payments to, or execute any new guarantee of, any Indebtedness in excess increase the compensation or fringe benefits of $100,000 in the aggregate (other than indebtedness for borrowed money owing to W or any of its Affiliates) directors, officers or prepay any Indebtedness;
(k) other than pursuant to arrangements existing on employees, provided that, the date hereof, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for obligations of any other person (other than any Subsidiary) in an amount in excess of $100,000;
(l) make any loans or advances other than Company may (i) loans or advances to wholly-owned Subsidiaries made increase compensation associated with promotions and regular reviews in the ordinary course of business consistent with past practice and (ii) routine salary, travel and expense advances to Company Employees pay bonuses in the ordinary course of business consistent with past practice; provided, however, that the aggregate amount of such payments with respect to the employees of the Company's United States operations other than Falk Communications, Inc., shall not exceed $1,000,0000;
(ix) engage in any transaction, or enter into any contract, agreement or arrangement (other than this Agreement, the Transactions and the incurrence of indebtedness for borrowed money owing to W or any of its Affiliates and transactions pursuant to any such contract, agreement or arrangement entered into on or prior agree to the date hereof), with settlement of any Affiliate, material claim or litigation;
(iil) engage make or rescind any material tax election or settle or compromise any material tax liability;
(m) make any material change in any transaction, or enter into any contract, agreement or arrangement, with any portfolio company its method of W that is not on arm's length terms and in the ordinary course of business, or (iii) amend, waive or relinquish any rights relating to any such transaction, contract, agreement or arrangement referred to in clause (i) or (ii) that will remain outstanding after the Closing in accordance with Section 8.05accounting;
(n) authorize except as required under the Company Stock Plan and as otherwise provided in this Agreement, accelerate the payment, right to payment or vesting of any new capital expenditures whichbonus, individuallyseverance, are greater than $100,000 orprofit sharing, in the aggregateretirement, would cause total capital expenditures for year ending December 31deferred compensation, 2003 to exceed $500,000 (orstock option, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), insurance or other than any capital expenditures in the ordinary course of business consistent with past practicecompensation or benefits;
(o) split, combine or reclassify any shares of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, other than (i) cash dividends and distributions by a wholly-owned Subsidiary to the Company or to a Subsidiary all of the capital stock which is owned directly or indirectly by the Company or (ii) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms; or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its securities or any securities of the Subsidiaries;
(p) (i) increase the compensation or fringe benefits of any Company Employee (except for (x) increases in salary or wages in the ordinary course of business consistent with past practice, (y) the payment of accrued or earned but unpaid bonuses and (z) stay bonuses or similar retention payments in an amount not to exceed $10,000 with respect to any individual payment and $100,000 in the aggregate with respect to all such payments), (ii) grant any severance or termination pay to any Company Employee, (iii) loan or advance any money or other property to any Company Employee (other than routine salary, travel and expense advances to Company Employees in the ordinary course of business and consistent with past practice), (iv) establish, adopt, enter into, amend or terminate any Company Plan, collective bargaining or labor agreement 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 of this Agreement (other than as may be required by the terms of an existing Company Plan or collective bargaining agreement, or as may be required by applicable law or in order to qualify under Sections 401 and 501 of the Code), or (v) grant any equity or equity-based awards, other than in the cases of clauses (i) through (v) pursuant to commitments of the Company or any Subsidiary existing on the date hereof required by contracts set forth in Section 4.08(k) or Section 4.12 of the Company Disclosure Schedule;
(q) pay, discharge or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction (A) of any such claims, liabilities or obligations in the ordinary course of business and consistent with past practice or (B) of claims, liabilities or obligations reflected or reserved against in in, or contemplated by, the consolidated financial statements of (or the notes thereto) contained in the Company referred to in Section 4.07 or liabilities incurred in the ordinary course of businessSEC Reports;
(rp) make enter into any agreement, understanding or change commitment that restrains, limits or impedes the Company's or any tax election of its Subsidiaries' ability to compete with or settle conduct any business or compromise line of business, including, but not limited to, geographic limitations on the Company's or any income tax liabilityof its Subsidiaries' activities;
(sq) other than materially modify, amend or terminate any material contract to which it is a party or waive any of its material rights or claims except in the ordinary course of business consistent with past practice, change any method of accounting, accounting policy or accounting practice, except for any such change required by reason of a concurrent change in GAAP as concurred with by the Company's independent auditors;
(t) fail to maintain insurance coverage at presently existing levels;
(u) make any repayments of principal to W or its Affiliates in respect of any Indebtedness owed to W or its Affiliates or any payment of interest accrued in respect of such Indebtedness;
(v) agree or commit to do any of the foregoing; or
(wr) knowingly take agree, in writing or agree or commit otherwise, to take any action that would make any representation and warranty of W or the Company hereunder inaccurate in any material respect at, or as of any time prior to, the Closing, except for any representations or warranties that are made as of a specified dateforegoing actions.
Appears in 1 contract
Samples: Merger Agreement (Cordiant Communications Group PLC /Adr)
Covenants Relating to Conduct of Business. Section 7.01. 4.1 Conduct of Business by the CompanyCompany Pending the Merger. From Except as expressly permitted by clauses (i) through (xviii) of this Section 4.1, during the period from the date hereof until of this Agreement through the ClosingEffective Time, the Company shall, and the shall cause each of its Subsidiaries shall conduct their to, in all material respects carry on its business in the ordinary course of its business as currently conducted and, to the extent consistent with past practice in compliance with all applicable laws and shall therewith, use their reasonable best efforts to preserve intact their its current business organizations and relationships with third parties and to organizations, keep available the services of their present its current officers and employeesemployees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time. Without limiting the generality of the foregoing, from the date hereof until the Closing and except as otherwise expressly contemplated by this Agreement or the other Transaction Agreements, as may result from the consummation of the Transactions, as set forth in Section 7.01 of the Company Disclosure Schedule, or as otherwise consented to in writing by Parent Letter (except if such consent would be inconsistent with applicable law), such consent not to be unreasonably withheld with respect specific reference to the granting of IRUs in fiber and/or conduit by the Company or the Subsidiariesapplicable subsection below), the Company shall not not, and shall cause not permit any of its Subsidiaries to, without the Subsidiaries not toprior written consent of Parent:
(ai) adopt (A) other than dividends paid by wholly-owned Subsidiaries, declare, set aside or propose pay any change dividends on, or make any other actual, constructive or deemed distributions in respect of, any of its articles capital stock, or otherwise make any payments to its shareholders in their capacity as such, (B) other than in the case of incorporationany Subsidiary, bylaws split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or (C) purchase, redeem or otherwise acquire any shares of capital stock of the Company or any other securities thereof or any rights, warrants or options to acquire any such shares or other organizational documentssecurities;
(bii) issue, deliver, sell, pledge pledge, dispose of or transfer or authorize or propose the issuance, delivery, sale, pledge or transfer of otherwise encumber any shares of its capital stock of stock, any class other voting securities or equity equivalent or any securities convertible into or exercisable forinto, or any rights, warrants, warrants or options or other rights (including options under the Company Stock Option Plans) to acquire, acquire any such shares shares, voting securities, equity equivalent or enter into any agreement with respect to the foregoing convertible securities, other than (iA) the issuance of shares of Company Common Stock upon the exercise of stock options or warrants, or conversion of Preferred Stock, Company Stock Options outstanding on the date hereof in accordance with their present terms, (ii) as required by Contracts in effect as of the date of this Agreement that are listed in Section 4.05 of the Company Disclosure Schedule accordance with their current terms and (iiiB) the issuance of capital stock shares of Company Common Stock pursuant to the Company as a dividend in respect of Preferred Stock outstanding on the date hereof in accordance with its present termsOption Agreement;
(iiii) amend the Company Charter or by-laws;
(iv) acquire (or agree to acquire by mergermerging or consolidating with, consolidation or acquisition by purchasing a substantial portion of stock the assets of or assets) equity in, or by any other manner, any business or any corporation, partnership limited liability company, partnership, association or other business organization or division thereof, thereof or otherwise acquire or agree to acquire any assets;
(iiv) sell, lease or otherwise dispose of a Subsidiary of, or (iii) agree to sell, lease or otherwise dispose of, any of an amount of assets or securitiesits assets, including IRUs, for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), except for transactions in the ordinary course consistent with past practice;
(d) merge or consolidate with any other Person;
(e) make any investment, whether by purchase of stock or securities, contributions to capital or any property transfer (other than investments in cash or cash equivalents with a maturity sales of less than 90 days or investments in wholly-owned Subsidiaries made, in each case, in the ordinary course of business consistent with past practice), or purchase for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), any property or assets of any other individual or entity, except for inventory purchased for resale that are in the ordinary course of business consistent with past practice;
(fvi) enter into incur any agreement indebtedness for borrowed money, guarantee any such indebtedness or arrangement that limits make any loans, advances or otherwise restricts the Company capital contributions to, or other investments in, any of the Subsidiaries or any of their respective Affiliates or successors thereto or that by its terms couldother person, after the Effective Time, limit or restrict Parent or the Company or any of their respective Affiliates or any successor thereto, from engaging or competing in any line of business or in any geographic area;
(g) other than (A) in the ordinary course of business consistent with past practicepractices and (B) indebtedness, waiveloans, release advances, capital contributions and investments between the Company and any of its wholly-owned Subsidiaries or relinquish between any material right;
(h) other than of such wholly-owned Subsidiaries, in each case in the ordinary course of business consistent with past practice, modify or change in any material respect any existing material license, lease, contract, or other agreementpractices;
(ivii) enter into alter (through merger, liquidation, reorganization, restructuring or in any agreements involving aggregate expenditures other fashion) the corporate structure or receipts ownership of more than $100,000 individually the Company or $500,000 in the aggregate (or, with respect to (i) any Cost of Services Contract, $1,000,000 and (ii) switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any agreements in the ordinary course of business consistent with past practice, including but not limited to installation fees and customer premise equipment, in each case, associated with new customers and in the ordinary course of business consistent with past practiceSubsidiary;
(jviii) createexcept as provided in Section 4.1(viii) of the Company Letter, incur enter into or assumeadopt any, or execute amend any new guarantee ofexisting, severance plan, agreement or arrangement or enter into or amend any Indebtedness in excess of $100,000 in the aggregate Company Plan, employment agreement (other than indebtedness for borrowed money owing to W with an employee at or above management level), or any consulting agreement out of its Affiliates) or prepay any Indebtednessthe ordinary course;
(kix) other than pursuant except as provided in Section 4.1(ix) of the Company Letter, increase the compensation payable or to arrangements existing on the date hereofbecome payable to its directors, assume, guarantee, endorse officers or otherwise become liable or responsible employees (whether directly, contingently or otherwise) except for obligations of any other person (other than any Subsidiary) in an amount in excess of $100,000;
(l) make any loans or advances other than (i) loans or advances to wholly-owned Subsidiaries made increases in the ordinary course of business consistent with past practice and (ii) routine salary, travel and expense advances to in salaries or wages of employees of the Company Employees in the ordinary course of business consistent with past practice;
(i) engage in any transaction, or enter into any contract, agreement or arrangement (other than this Agreement, the Transactions and the incurrence of indebtedness for borrowed money owing to W or any of its Affiliates and transactions pursuant to any such contract, agreement or arrangement entered into on or prior to the date hereof), with any Affiliate, (ii) engage in any transaction, or enter into any contract, agreement or arrangement, with any portfolio company Subsidiaries who are not officers of W that is not on arm's length terms and in the ordinary course of business, or (iii) amend, waive or relinquish any rights relating to any such transaction, contract, agreement or arrangement referred to in clause (i) or (ii) that will remain outstanding after the Closing in accordance with Section 8.05;
(n) authorize any new capital expenditures which, individually, are greater than $100,000 or, in the aggregate, would cause total capital expenditures for year ending December 31, 2003 to exceed $500,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any capital expenditures in the ordinary course of business consistent with past practice;
(o) split, combine or reclassify any shares of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, other than (i) cash dividends and distributions by a wholly-owned Subsidiary to the Company or to a Subsidiary all of the capital stock which is owned directly or indirectly by the Company or (ii) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms; or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its securities Subsidiaries) or any securities of the Subsidiaries;
(p) (i) increase the compensation or fringe benefits of any Company Employee (except for (x) increases in salary or wages in the ordinary course of business consistent with past practice, (y) the payment of accrued or earned but unpaid bonuses and (z) stay bonuses or similar retention payments in an amount not to exceed $10,000 with respect to any individual payment and $100,000 in the aggregate with respect to all such payments), (ii) grant any severance or termination pay to to, or enter into any employment or severance agreement with, any director or officer of the Company Employeeor any of its Subsidiaries, (iii) loan or advance any money or other property to any Company Employee (other than routine salary, travel and expense advances to Company Employees in the ordinary course of business and consistent with past practice), (iv) establish, adopt, enter into, or, except as may be required to comply with applicable law, amend in any material respect or terminate take action to enhance in any Company Planmaterial respect or accelerate any rights or benefits under, any labor, collective bargaining bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or labor agreement or any other plan, agreement, program, policy, trust, fund fund, policy or other arrangement that would be a Company Plan if for the benefit of any director, officer or employee;
(x) knowingly violate or knowingly fail to perform any obligation or duty imposed upon it were in existence as of the date of this Agreement or any Subsidiary by any applicable material federal, state or local law, rule, regulation, guideline or ordinance;
(xi) make any change to accounting policies or procedures (other than as may actions required to be required taken by the terms of an existing Company Plan or collective bargaining agreement, or as may be required by applicable law or in order to qualify under Sections 401 and 501 of the Codegenerally accepted accounting principles), or (v) grant any equity or equity-based awards, other than in the cases of clauses (i) through (v) pursuant to commitments of the Company or any Subsidiary existing on the date hereof required by contracts set forth in Section 4.08(k) or Section 4.12 of the Company Disclosure Schedule;
(qxii) prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(xiii) make or rescind any express or deemed election relating to Taxes, change any of its methods of reporting income or deductions for Tax purposes, or settle or compromise any material federal, state, local or foreign income tax liability;
(xiv) commence any litigation or proceedings or settle or compromise any material claims or litigation;
(xv) enter into, renew, terminate or amend any agreement or contract material to the Company and its Subsidiaries, taken as a whole, including any Significant Contract; or purchase any real property or make or agree to make any new capital expenditure or expenditures which in the aggregate are in excess of $5 million;
(xvi) pay, discharge or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction satisfaction, in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reflected or reserved against in in, or contemplated by, the consolidated most recent financial statements (or the notes thereto) of the Company referred to in Section 4.07 or liabilities incurred included in the ordinary course of business;
(r) make Company SEC Documents or change any tax election or settle or compromise any income tax liability;
(s) other than incurred in the ordinary course of business consistent with past practice, change any method of accounting, accounting policy or accounting practice, except for any such change required by reason of a concurrent change in GAAP as concurred with by the Company's independent auditors;; or
(txvii) fail to maintain insurance coverage at presently existing levels;
(u) make any repayments of principal to W authorize, recommend, propose or its Affiliates in respect of any Indebtedness owed to W or its Affiliates or any payment of interest accrued in respect of such Indebtedness;
(v) agree or commit announce an intention to do any of the foregoing; or
(w) knowingly take or agree or commit to take any action that would make any representation and warranty of W or the Company hereunder inaccurate in any material respect at, or as enter into any contract, agreement, commitment or arrangement to do any of any time prior to, the Closing, except for any representations or warranties that are made as of a specified dateforegoing.
Appears in 1 contract
Covenants Relating to Conduct of Business. Section 7.01. Pending the Closing
6.1 Conduct of the Company. From Business Pending the Closing.
(a) During the period from the date hereof of this Agreement and continuing until the Closing, each of the Stockholder and the Company agrees, that neither the Stockholder nor the Company shall, and shall cause the Company Subsidiaries not to, engage in any business whatsoever other than in connection with the consummation of the transactions contemplated by this Agreement and the Subsidiaries shall conduct their business in the ordinary course consistent with past practice in compliance with all applicable laws Merger Agreement, and shall use their commercially reasonable best efforts to preserve intact their its business organizations and relationships with third parties assets, maintain its assets in good operating condition and to keep available repair (ordinary wear and tear excepted), retain the services of their present officers its officers, employees and employees. Without limiting independent contractors and use reasonable commercial efforts to keep in full force and effect liability insurance and bonds comparable in amount and scope of coverage to that currently maintained with respect to its business, unless, in any case, BBI consents otherwise in writing.
(b) During the generality of the foregoing, period from the date hereof of this Agreement and continuing until the Closing Closing, each of the Stockholder and the Company agrees as to itself and, with respect to the Company, the Company Subsidiaries, that except as expressly contemplated or permitted by this Agreement Agreement, or to the extent that the other Transaction Agreementsparty shall otherwise consent in writing:
(i) It shall not amend or propose to amend its certificate of incorporation or by-laws or equivalent organizational documents except as contemplated in this Agreement.
(ii) It shall not, as may result from nor in the consummation of the Transactions, as set forth in Section 7.01 case of the Company Disclosure Schedule, or as otherwise consented to in writing by Parent (except if such consent would be inconsistent with applicable law), such consent not to be unreasonably withheld with respect to the granting of IRUs in fiber and/or conduit by shall it permit the Company or the SubsidiariesSubsidiaries to, the Company shall not and shall cause the Subsidiaries not to:
(a) adopt or propose any change in its articles of incorporation, bylaws or other organizational documents;
(b) issue, deliver, sell, pledge or transfer or redeem, acquire, authorize or propose the issuanceto issue, deliverydeliver, salesell, pledge redeem, acquire or transfer of authorize, any shares of its capital stock of any class or any securities convertible into or exercisable forinto, or any rights, warrants, warrants or options or other rights to acquire, any such shares or enter into any agreement with respect convertible securities or other ownership interest and, in the case of the Stockholder, shall not sell or otherwise transfer the Shares, provided that the Company shall be permitted to issue the shares of its Common Stock to be issued to the foregoing other than stockholders of BBI under the terms of the Merger Agreement.
(iii) It shall not, nor in the case of the Company shall it permit any of the Company Subsidiaries to, nor shall it propose to: (i) the issuance of Company Common Stock upon exercise of stock options declare, set aside, make or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms, (ii) as required by Contracts in effect as of the date of this Agreement that are listed in Section 4.05 of the Company Disclosure Schedule and (iii) the issuance of capital stock of the Company as a pay any dividend in respect of Preferred Stock outstanding on the date hereof in accordance with its present terms;
(i) acquire (by merger, consolidation or acquisition of stock or assets) any corporation, partnership or other business organization distribution, payable in cash, stock, property or division thereof, (ii) sell, lease or otherwise dispose of a Subsidiary or (iii) sell, lease or otherwise dispose of an amount of assets or securities, including IRUs, for an amount in excess of $100,000 (orotherwise, with respect to switch software upgrades for purposes any of compliance with the Communication Assistance for Law Enforcement Actits capital stock or (ii) reclassify, $1,000,000)combine, except for transactions in the ordinary course consistent with past practice;split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock.
(div) merge or consolidate with any other Person;
(e) make any investment, whether by purchase of stock or securities, contributions to capital or any property transfer (other Other than investments in cash or cash equivalents with a maturity of less than 90 days or investments in wholly-owned Subsidiaries made, in each case, dispositions in the ordinary course of business consistent with past practicepractice which would not cause a Material Adverse Effect, individually or in the aggregate, to it and its subsidiaries, taken as a whole, it shall not, nor shall it permit any of its subsidiaries to, sell, lease, encumber or otherwise dispose of, or agree to sell, lease (whether such lease is an operating or capital lease), encumber or purchase for an amount otherwise dispose of its assets.
(v) It shall promptly advise the other party hereto in excess writing of $100,000 any change in the condition (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000financial or otherwise), operations or properties, businesses or business prospects of such party or any property of its subsidiaries which would result in a Material Adverse Effect.
(vi) It shall not permit to occur any (1) change in accounting principles, methods or assets practices, investment practices, claims, payment and processing practices or policies regarding intercompany transactions, (2) incurrence of Indebtedness or any commitment to incur Indebtedness, any incurrence of a contingent liability, Contingent Obligation or other liability of any other individual type, (3) cancellation of any debt or entitywaiver or release of any contract, right or claim, except for inventory purchased for resale cancellations, waivers and releases in the ordinary course of business consistent with its past practice;
practice which do not exceed $10,000 in the aggregate, (f4) enter into any agreement amendment, termination or arrangement that limits revocation of, or otherwise restricts the Company or any of the Subsidiaries or any of their respective Affiliates or successors thereto or that by its terms could, after the Effective Time, limit or restrict Parent a failure to perform obligations or the Company occurrence of any default under, (Y) any contract or any agreement (including, without limitation, leases) to which it is or, as of their respective Affiliates or any successor theretoDecember 31, from engaging or competing in any line of business or in any geographic area;
(g) 2006, was a party, other than in the ordinary course of business consistent with past practice, waive, release or relinquish any material right;
(h) other than in the ordinary course of business consistent with past practice, modify or change in any material respect any existing material license, lease, contract, or other agreement;
(i) enter into any agreements involving aggregate expenditures or receipts of more than $100,000 individually or $500,000 in the aggregate (or, with respect to (iZ) any Cost License, (5) execution of Services Contracttermination, $1,000,000 and (ii) switch software upgrades for purposes of compliance severance or similar agreements with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any agreements in the ordinary course of business consistent with past practice, including but not limited to installation fees and customer premise equipment, in each case, associated with new customers and in the ordinary course of business consistent with past practice;
(j) create, incur or assume, or execute any new guarantee of, any Indebtedness in excess of $100,000 in the aggregate (other than indebtedness for borrowed money owing to W or any of its Affiliatesofficers, directors, employees, agents or independent contractors or (6) entering into any leases of real property or prepay any Indebtedness;agreement to acquire real property.
(kvii) other than pursuant to arrangements existing on the date hereofIt shall not, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for obligations of any other person (other than any Subsidiary) in an amount in excess of $100,000;
(l) make any loans or advances other than (i) loans or advances to wholly-owned Subsidiaries made in the ordinary course of business consistent with past practice and (ii) routine salary, travel and expense advances to Company Employees in the ordinary course of business consistent with past practice;
(i) engage in any transaction, or enter into any contract, agreement or arrangement (other than this Agreement, the Transactions and the incurrence of indebtedness for borrowed money owing to W or Company shall not permit any of its Affiliates and transactions pursuant to any such contract, agreement or arrangement entered into on or prior to the date hereof), with any Affiliate, (ii) engage in any transaction, or enter into any contract, agreement or arrangement, with any portfolio company of W that is not on arm's length terms and in the ordinary course of business, or (iii) amend, waive or relinquish any rights relating to any such transaction, contract, agreement or arrangement referred to in clause (i) or (ii) that will remain outstanding after the Closing in accordance with Section 8.05;
(n) authorize any new capital expenditures which, individually, are greater than $100,000 or, in the aggregate, would cause total capital expenditures for year ending December 31, 2003 to exceed $500,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any capital expenditures in the ordinary course of business consistent with past practice;
(o) split, combine or reclassify any shares of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, other than (i) cash dividends and distributions by a wholly-owned Subsidiary to the Company or to a Subsidiary all of the capital stock which is owned directly or indirectly by the Company or (ii) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms; or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its securities or any securities of the Subsidiaries;
(p) (i) increase the compensation or fringe benefits of any Company Employee (except for (x) increases in salary or wages in the ordinary course of business consistent with past practice, (y) the payment of accrued or earned but unpaid bonuses and (z) stay bonuses or similar retention payments in an amount not to exceed $10,000 with respect to any individual payment and $100,000 in the aggregate with respect to all such payments), (ii) grant any severance or termination pay to any Company Employee, (iii) loan or advance any money or other property to any Company Employee (other than routine salary, travel and expense advances to Company Employees in the ordinary course of business and consistent with past practice), (iv) establish, adopt, enter into, amend or terminate any Company Plan, collective bargaining or labor agreement 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 of this Agreement (other than as may be required by the terms of an existing Company Plan or collective bargaining agreement, or as may be required by applicable law or in order to qualify under Sections 401 and 501 of the Code), or (v) grant any equity or equity-based awards, other than in the cases of clauses (i) through (v) pursuant to commitments of the Company or any Subsidiary existing on the date hereof required by contracts set forth in Section 4.08(k) or Section 4.12 of the Company Disclosure Schedule;
(q) paySubsidiaries to, discharge or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business of liabilities reflected or reserved against in the consolidated financial statements of the Company referred to in Section 4.07 or liabilities incurred in the ordinary course of business;
(r) make or change any tax election or settle or compromise any income tax liability;
(s) other than in the ordinary course of business consistent with past practice, change any method of accounting, accounting policy or accounting practice, except for any such change required by reason of a concurrent change in GAAP as concurred with by the Company's independent auditors;
(t) fail to maintain insurance coverage at presently existing levels;
(u) make any repayments of principal to W or its Affiliates in respect of any Indebtedness owed to W or its Affiliates or any payment of interest accrued in respect of such Indebtedness;
(v) agree or commit to do any of the foregoing; or
(w) knowingly take or agree or commit to take any action action, (i) that would is reasonably likely to make any representation and warranty of W or the Company hereunder inaccurate in any material respect at, or as of any time prior to, the Closing, except for any its representations or warranties hereunder inaccurate; or (ii) that are made as is prohibited pursuant to the provisions of a specified datethis Article VI.
Appears in 1 contract
Samples: Stock Purchase Agreement (Captech Financial Group, Inc)
Covenants Relating to Conduct of Business. Section 7.01. Conduct of During the Company. From the date hereof until the Closing, the Company and the Subsidiaries shall conduct their business in the ordinary course consistent with past practice in compliance with all applicable laws and shall use their reasonable best efforts to preserve intact their business organizations and relationships with third parties and to keep available the services of their present officers and employees. Without limiting the generality of the foregoing, period from the date hereof of this Agreement and continuing until the Closing Date, the Shareholder and the Corporation each covenants and agrees that (except as expressly contemplated or permitted by this Agreement or the other Transaction Agreements, as may result from the consummation of the Transactions, as set forth in Section 7.01 of the Company Disclosure ScheduleAgreement, or as otherwise consented to in writing by Parent (except if such consent would be inconsistent with applicable law), such consent not to be unreasonably withheld with respect to the granting of IRUs in fiber and/or conduit by the Company or the Subsidiaries, extent that the Company shall not otherwise consent in writing) it shall use such rights and powers as are reasonably available to it to procure that the Corporation shall cause the Subsidiaries not toin all material respects:
(a) adopt or propose any change in conduct its articles of incorporation, bylaws or other organizational documents;
(b) issue, deliver, sell, pledge or transfer or authorize or propose the issuance, delivery, sale, pledge or transfer of any shares of its capital stock of any class or any securities convertible into or exercisable for, or any rights, warrants, options or other rights to acquire, any such shares or enter into any agreement with respect to the foregoing other than (i) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms, (ii) as required by Contracts in effect as of the date of this Agreement that are listed in Section 4.05 of the Company Disclosure Schedule and (iii) the issuance of capital stock of the Company as a dividend in respect of Preferred Stock outstanding on the date hereof in accordance with its present terms;
(i) acquire (by merger, consolidation or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof, (ii) sell, lease or otherwise dispose of a Subsidiary or (iii) sell, lease or otherwise dispose of an amount of assets or securities, including IRUs, for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), except for transactions only in the ordinary course course, consistent with past practice;
(b) use its best efforts to (i) preserve the present business operations, organization (including, without limitation, management and the sales force) and goodwill of its business and (ii) preserve the present relationship of the Corporation with Persons having business dealings with the Corporation;
(c) comply with all laws and with all contractual and other obligations applicable to it;
(d) merge or consolidate with any other Personnot change its organizational documents;
(e) make not issue or contract to issue any investmentstock, whether by purchase of securities, options, or debt which is convertible to stock or securities, contributions ;
(f) not declare or agree to capital declare or otherwise make any property transfer dividend or other distribution or payment in respect of the Stock (other than investments in cash the Operating Site);
(g) not sell, transfer, assign, pledge, encumber or cash equivalents with a maturity of less than 90 days or investments in wholly-owned Subsidiaries made, in each case, in the ordinary course of business consistent with past practice), or purchase for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), any property or assets otherwise dispose of any other individual or entityof its assets, except for inventory purchased for resale in the ordinary course of business consistent with past practice;
(fh) enter into not acquire any agreement material properties or arrangement that limits assets and not sell, assign, transfer, convey, lease or otherwise restricts the Company or dispose of any of the Subsidiaries or any of their respective Affiliates or successors thereto or that by its terms could, after the Effective Time, limit or restrict Parent or the Company or any of their respective Affiliates or any successor thereto, from engaging or competing in any line of business or in any geographic area;
material properties (g) other than in the ordinary course of business consistent with past practice, waive, release or relinquish any material right;
(h) other than in the ordinary course of business consistent with past practice, modify or change in any material respect any existing material license, lease, contract, or other agreementOperating Site);
(i) enter into any agreements involving aggregate expenditures maintain its present insurance or receipts equivalent coverage on all of more than $100,000 individually or $500,000 in the aggregate (or, with respect its assets and on all real and personal property leased to (i) any Cost of Services Contract, $1,000,000 and (ii) switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any agreements in the ordinary course of business consistent with past practice, including but not limited to installation fees and customer premise equipment, in each case, associated with new customers and in the ordinary course of business consistent with past practiceit;
(j) createpromptly notify the Company of (i) the occurrence of any matter which may have a material adverse effect on its business or its assets (i.e., incur a ten percent or assumegreater decrease in overall value of the Corporation), and (ii) any Legal Proceeding commenced by or execute any new guarantee of, any Indebtedness in excess of $100,000 in the aggregate (other than indebtedness for borrowed money owing to W against it or any of its Affiliates) Legal Proceeding commenced or prepay any Indebtednessthreatened relating to the transactions contemplated by this Agreement, which in either case is material to the business;
(k) other than pursuant not agree to arrangements existing on the date hereof, assume, guarantee, endorse anything prohibited by this Agreement or otherwise become liable or responsible (whether directly, contingently or otherwise) for obligations of any other person (other than any Subsidiary) in an amount in excess of $100,000;
(l) anything which would make any loans of the representations and warranties of the Shareholder or advances other than (i) loans the Corporation in this Agreement untrue or advances to wholly-owned Subsidiaries made incorrect in the ordinary course of business consistent with past practice and (ii) routine salary, travel and expense advances to Company Employees in the ordinary course of business consistent with past practice;any material respect. Provided that:
(i) engage in any transaction, or enter into any contract, agreement or arrangement the Corporation will be entitled to pay monthly dividends of up to an aggregate amount of (other than this Agreement, the Transactions and the incurrence of indebtedness for borrowed money owing to W or any of its Affiliates and transactions pursuant to any such contract, agreement or arrangement entered into on or prior pounds)20,000 per month to the date hereof), with any Affiliate, (ii) engage in any transaction, or enter into any contract, agreement or arrangement, with any portfolio company of W that is not on arm's length terms and in the ordinary course of business, or (iii) amend, waive or relinquish any rights relating to any such transaction, contract, agreement or arrangement referred to in clause (i) or (ii) that will remain outstanding after the Closing in accordance with Section 8.05;
(n) authorize any new capital expenditures which, individually, are greater than $100,000 or, in the aggregate, would cause total capital expenditures for year ending December 31, 2003 to exceed $500,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any capital expenditures in the ordinary course of business consistent with past practice;
(o) split, combine or reclassify any shares of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, other than (i) cash dividends and distributions by a wholly-owned Subsidiary to the Company or to a Subsidiary all shareholders of the capital stock which is owned directly or indirectly by the Company or Corporation; and
(ii) the issuance of Corporation may incur capital expenditures as long as the Company Common Stock upon exercise of stock options or warrantsshall have been given prior notice, or conversion of Preferred Stockand the opportunity to consult with the Corporation's management, outstanding on the date hereof in accordance with their present terms; or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its securities or any securities of the Subsidiaries;
once such capital expenditures exceeds (p) (i) increase the compensation or fringe benefits of any Company Employee (except for (x) increases in salary or wages in the ordinary course of business consistent with past practice, (y) the payment of accrued or earned but unpaid bonuses and (z) stay bonuses or similar retention payments in an amount not to exceed $10,000 with respect to any individual payment and $100,000 pounds)100,000 in the aggregate (with respect additional prior notice and opportunity to all consult once such paymentscapital expenditures exceed (pounds)200,000, and (pounds)300,000), ; and the Corporation shall not make capital expenditures in excess of (ii) grant any severance or termination pay to any Company Employee, (iii) loan or advance any money or other property to any Company Employee (other than routine salary, travel and expense advances to Company Employees in the ordinary course of business and consistent with past practice), (iv) establish, adopt, enter into, amend or terminate any Company Plan, collective bargaining or labor agreement 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 of this Agreement (other than as may be required by the terms of an existing Company Plan or collective bargaining agreement, or as may be required by applicable law or in order to qualify under Sections 401 and 501 of the Code), or (v) grant any equity or equity-based awards, other than in the cases of clauses (i) through (v) pursuant to commitments of the Company or any Subsidiary existing on the date hereof required by contracts set forth in Section 4.08(k) or Section 4.12 of the Company Disclosure Schedule;
(q) pay, discharge or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business of liabilities reflected or reserved against in the consolidated financial statements of the Company referred to in Section 4.07 or liabilities incurred in the ordinary course of business;
(r) make or change any tax election or settle or compromise any income tax liability;
(s) other than in the ordinary course of business consistent with past practice, change any method of accounting, accounting policy or accounting practice, except for any such change required by reason of a concurrent change in GAAP as concurred with by pounds)350,000 without the Company's independent auditors;
(t) fail to maintain insurance coverage at presently existing levels;
(u) make any repayments prior written approval, which approval shall not be unreasonably withheld or delayed; notwithstanding the provisions of principal to W or its Affiliates in respect of any Indebtedness owed to W or its Affiliates or any payment of interest accrued in respect of such Indebtedness;
(v) agree or commit to do any of the foregoing; or
(w) knowingly take or agree or commit to take any action that would make any representation and warranty of W or the Company hereunder inaccurate in any material respect at, or as of any time prior to, the Closing, except for any representations or warranties that are made as of a specified datethis Section 5.
Appears in 1 contract
Samples: Shareholder Agreement (Dispatch Management Services Corp)
Covenants Relating to Conduct of Business. Section 7.01SECTION 5.01. Conduct of Business by the Company. From .
(a) Except for matters set forth in Section 5.01 of the Company Disclosure Letter or otherwise contemplated by this Agreement, from the date hereof until of this Agreement to the Closing, Effective Time the Company shall, and shall cause each Company Subsidiary to, conduct its business in light of the Subsidiaries shall conduct their business existing circumstances in the ordinary course consistent with past practice course, including operating in compliance with Law and making all applicable laws required filings with the SEC. In addition, and shall use their reasonable best efforts to preserve intact their business organizations and relationships with third parties and to keep available the services of their present officers and employees. Without without limiting the generality of the foregoing, except for matters set forth in the Company Disclosure Letter or otherwise contemplated by this Agreement, from the date hereof until the Closing and except as expressly contemplated by of this Agreement or the other Transaction Agreements, as may result from the consummation of the Transactions, as set forth in Section 7.01 of the Company Disclosure Schedule, or as otherwise consented to in writing by Parent (except if such consent would be inconsistent with applicable law), such consent not to be unreasonably withheld with respect to the granting of IRUs in fiber and/or conduit by the Company or the SubsidiariesEffective Time, the Company shall not not, and shall cause not permit any Company Subsidiary to, do any of the Subsidiaries following without the prior written consent of Parent (which consent shall not to:be unreasonably withheld, delayed or conditioned):
(ai) adopt (A) declare, set aside or propose pay any change dividends on, or make any other distributions in respect of, any of its articles capital stock, other than dividends and distributions by a direct or indirect wholly owned subsidiary of incorporationthe Company to its parent, bylaws (B) split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, or (C) purchase, redeem or otherwise acquire any shares of capital stock of the Company or any Company Subsidiary or any other securities thereof or any options, warrants, calls or rights to acquire any such shares or other organizational documentssecurities;
(bii) issue, deliver, sell, pledge sell or transfer or authorize or propose the issuance, delivery, sale, pledge or transfer of grant (A) any shares of its capital stock of or other voting securities or equity interests, (B) any class or Voting Company Debt, (C) any securities convertible into or exchangeable into, or exercisable for, any such shares, voting securities, equity interests or Voting Company Debt, or (D) any rightsoptions, warrants, options calls, rights, convertible or exchangeable securities, "phantom" stock rights, stock appreciation rights or stock-based performance units, profit participation rights, rights of repurchase, other rights linked to acquirethe price of Company Capital Stock, commitments, Contracts, arrangements or undertakings obligating it to issue, deliver, sell or grant any such shares shares, voting securities, equity interests or enter into any agreement with respect to the foregoing Voting Company Debt, in each case other than (i1) the issuance of Company Common Stock (and associated Company Rights) upon the exercise of Company Employee Stock Options outstanding on the date of this Agreement and in accordance with their present terms and (2) the issuance of Company Common Stock upon the exercise of stock options Company Rights if the Company is not in breach of Section 6.09;
(iii) amend its certificate of incorporation, by-laws or warrantsother comparable charter or organizational documents;
(iv) acquire or agree to acquire (A) by merging or consolidating with, or conversion by purchasing any equity interest in or portion of Preferred Stockthe assets of, outstanding on or by any other manner, any business or any corporation, partnership, joint venture, association or other business organization or division thereof or (B) any assets that are material, individually or in the date hereof aggregate, to the Company and the Company Subsidiaries, taken as a whole, except purchases in accordance the ordinary course of business consistent with their present termsprior practice;
(v) make any change in accounting methods, (ii) principles or practices materially affecting the reported consolidated assets, liabilities or results of operations of the Company, except insofar as may have been required by Contracts a change in GAAP or applicable Law;
(vi) sell, lease (as lessor), license or otherwise dispose of or subject to any Lien any properties or assets that are material, individually or in the aggregate, to the Company and the Company Subsidiaries, taken as a whole, except sales of assets or licensing transactions in the ordinary course of business consistent with prior practice;
(vii) (A) 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 Company Subsidiary, 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 indebtedness for borrowed money so long as such indebtedness (together with all other indebtedness for borrowed money) does not exceed an aggregate principal amount of $2,000,000 or (B) make any loans or capital contributions to, or investments in, any other person, other than to or in the Company or any direct or indirect wholly owned subsidiary of the Company;
(viii) make or agree to make any new capital expenditure or expenditures that, individually, is in excess of $50,000 or, in the aggregate, are in excess of $50,000;
(ix) make any election with respect to Taxes or settle or compromise any material Tax liability or refund;
(A) grant to any director or executive officer of the Company of any Company Subsidiary any increase in cash compensation, except increases in the ordinary course of business of not more than 2% per annum or increases required under employment agreements in effect as of the date of this Agreement that are listed in Section 4.05 of the Company Disclosure Schedule and (iii) the issuance of capital stock of the Company as a dividend in respect of Preferred Stock outstanding on the date hereof in accordance with its present terms;Agreement,
(iB) acquire (by merger, consolidation or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof, (ii) sell, lease or otherwise dispose of a Subsidiary or (iii) sell, lease or otherwise dispose of an amount of assets or securities, including IRUs, for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), except for transactions in the ordinary course consistent with past practice;
(d) merge or consolidate with any other Person;
(e) make any investment, whether by purchase of stock or securities, contributions to capital or any property transfer (other than investments in cash or cash equivalents with a maturity of less than 90 days or investments in wholly-owned Subsidiaries made, in each case, in the ordinary course of business consistent with past practice), or purchase for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), any property or assets of any other individual or entity, except for inventory purchased for resale in the ordinary course of business consistent with past practice;
(f) enter into any agreement or arrangement that limits or otherwise restricts the Company or any of the Subsidiaries or any of their respective Affiliates or successors thereto or that by its terms could, after the Effective Time, limit or restrict Parent or the Company or any of their respective Affiliates or any successor thereto, from engaging or competing in any line of business or in any geographic area;
(g) other than in the ordinary course of business consistent with past practice, waive, release or relinquish any material right;
(h) other than in the ordinary course of business consistent with past practice, modify or change in any material respect any existing material license, lease, contract, or other agreement;
(i) enter into any agreements involving aggregate expenditures or receipts of more than $100,000 individually or $500,000 in the aggregate (or, with respect to (i) any Cost of Services Contract, $1,000,000 and (ii) switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any agreements in the ordinary course of business consistent with past practice, including but not limited to installation fees and customer premise equipment, in each case, associated with new customers and in the ordinary course of business consistent with past practice;
(j) create, incur or assume, or execute any new guarantee of, any Indebtedness in excess of $100,000 in the aggregate (other than indebtedness for borrowed money owing to W or any of its Affiliates) or prepay any Indebtedness;
(k) other than pursuant to arrangements existing on the date hereof, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for obligations of any other person (other than any Subsidiary) in an amount in excess of $100,000;
(l) make any loans or advances other than (i) loans or advances to wholly-owned Subsidiaries made in the ordinary course of business consistent with past practice and (ii) routine salary, travel and expense advances to Company Employees in the ordinary course of business consistent with past practice;
(i) engage in any transaction, or enter into any contract, agreement or arrangement (other than this Agreement, the Transactions and the incurrence of indebtedness for borrowed money owing to W or any of its Affiliates and transactions pursuant grant to any such contract, agreement director or arrangement entered into on or prior to the date hereof), with executive officer any Affiliate, (ii) engage increase in any transaction, or enter into any contract, agreement or arrangement, with any portfolio company of W that is not on arm's length terms and in the ordinary course of business, or (iii) amend, waive or relinquish any rights relating to any such transaction, contract, agreement or arrangement referred to in clause (i) or (ii) that will remain outstanding after the Closing in accordance with Section 8.05;
(n) authorize any new capital expenditures which, individually, are greater than $100,000 or, in the aggregate, would cause total capital expenditures for year ending December 31, 2003 to exceed $500,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any capital expenditures in the ordinary course of business consistent with past practice;
(o) split, combine or reclassify any shares of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, other than (i) cash dividends and distributions by a wholly-owned Subsidiary to the Company or to a Subsidiary all of the capital stock which is owned directly or indirectly by the Company or (ii) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms; or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its securities or any securities of the Subsidiaries;
(p) (i) increase the compensation or fringe benefits of any Company Employee (except for (x) increases in salary or wages in the ordinary course of business consistent with past practice, (y) the payment of accrued or earned but unpaid bonuses and (z) stay bonuses or similar retention payments in an amount not to exceed $10,000 with respect to any individual payment and $100,000 in the aggregate with respect to all such payments), (ii) grant any severance or termination pay to pay, except increases required under any Company Employeeemployment, (iii) loan severance or advance any money or other property to any Company Employee (other than routine salary, travel and expense advances to Company Employees termination agreements in the ordinary course of business and consistent with past practice), (iv) establish, adopt, enter into, amend or terminate any Company Plan, collective bargaining or labor agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Plan if it were in existence effect as of the date of this Agreement (other than as may be required by the terms of an existing Company Plan or collective bargaining agreement, or as may be required by applicable law or in order to qualify under Sections 401 and 501 of the Code)Agreement, or (vC) grant enter into any equity employment, severance, termination or equity-based awardsother agreement with any such director or executive officer;
(xi) adopt or amend in any material respect any collective bargaining agreement or any bonus, pension, profit sharing, deferred compensation, incentive compensation, stock ownership, stock purchase, stock option, phantom stock, retirement, vacation, severance, disability, death benefit, hospitalization, medical or other than in the cases of clauses (i) through (v) pursuant plan, arrangement or understanding providing benefits to commitments any current or former employee, officer or director of the Company or any Subsidiary existing Company Subsidiary;
(xii) enter into, modify or terminate (i) any Contract listed on the date hereof required by contracts set forth in Section 4.08(k) or Section 4.12 3.15 of the Company Disclosure ScheduleLetter, and (ii) any Contract entered into on or after the date of this Agreement, that if it had been entered into prior to the date of this Agreement, would have had to be listed on Section 3.15 of the Company Disclosure Letter;
(qxiii) payenter into, discharge modify or satisfy terminate any claimssponsorship or promoter Contract;
(xiv) enter into, liabilities modify or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business of liabilities reflected or reserved against in the consolidated financial statements terminate any Contract with any affiliate of the Company referred to in Section 4.07 or liabilities incurred in the ordinary course of business;
(r) make or change any tax election or settle or compromise any income tax liability;
(s) other than in the ordinary course of business consistent with past practice, change any method of accounting, accounting policy or accounting practice, except for any such change required by reason of a concurrent change in GAAP as concurred with by the Company's independent auditors;
(t) fail to maintain insurance coverage at presently existing levels;
(u) make any repayments of principal to W or its Affiliates in respect of any Indebtedness owed to W or its Affiliates or any payment of interest accrued in respect of such Indebtedness;
(v) agree or commit to do any of the foregoingCompany Subsidiary; or
(wxv) knowingly take authorize any of, or commit or agree or commit to take any action that would make any representation and warranty of W or the Company hereunder inaccurate in any material respect at, or as of any time prior toof, the Closing, except for any representations or warranties that are made as of a specified dateforegoing actions.
Appears in 1 contract
Samples: Merger Agreement (Championship Auto Racing Teams Inc)
Covenants Relating to Conduct of Business. Section 7.015.1 CONDUCT OF BUSINESS BY THE COMPANY PRIOR TO THE EFFECTIVE TIME. Conduct of Except as contemplated by this Agreement or as expressly agreed to in writing by Parent, during the Company. From period from the date hereof until of this Agreement to the ClosingEffective Time, the Company will, and the will cause each of its Subsidiaries shall to, conduct their its operations according to its ordinary and usual course of business in the ordinary course and consistent with past practice in compliance with all applicable laws and shall use its and their respective reasonable best efforts to preserve intact their current business organizations and relationships with third parties and to organizations, keep available the services of their present current officers and employeesemployees and preserve their relationships with customers, suppliers, licensors, licensees, advertisers, distributors and others having business dealings with them and to preserve goodwill. Without limiting the generality of the foregoing, from the date hereof until the Closing and except as (A) otherwise expressly contemplated provided in this Agreement, (B) required by this Agreement Law, or the other Transaction Agreements, as may result from the consummation of the Transactions, as (C) set forth in on Section 7.01 5.1 of the Company Disclosure Schedule, or as otherwise consented to in writing by Parent (except if such consent would be inconsistent with applicable law), such consent not to be unreasonably withheld with respect prior to the granting of IRUs in fiber and/or conduit by the Company or the SubsidiariesEffective Time, the Company shall not will not, and shall will cause the its Subsidiaries not to, without the prior written consent of Parent:
(a) adopt do or propose effect any change in of the following actions with respect to its articles of incorporationor its Subsidiaries' securities: (i) adjust, bylaws split, combine or other organizational documents;
reclassify its capital stock, (bii) issuemake, deliverdeclare or pay any dividend or distribution on, sellor, pledge directly or transfer indirectly, redeem, purchase or authorize or propose the issuanceotherwise acquire, delivery, sale, pledge or transfer of any shares of its capital stock of any class or any securities or obligations convertible into or exchangeable for any shares of its capital stock, other than regular quarterly dividends on Company Common Stock and dividends declared and paid by any of the Company's directly or indirectly wholly owned Subsidiaries, (iii) grant any person any right or option to acquire any shares of its capital stock, (iv) issue, deliver or sell or agree to issue, deliver or sell any additional shares of its capital stock or any securities or obligations convertible into or exchangeable or exercisable forfor any shares of its capital stock or such securities, including pursuant to any employee stock purchase plans (except pursuant to the exercise of Company Options that are outstanding as of the date hereof and disclosed in Section 5.1 of the Company Disclosure Schedule), (v) reprice any Company Options, or any rights, warrants, options or other rights to acquire, any such shares or (vi) enter into any agreement agreement, understanding or arrangement with respect to the foregoing other than (i) the issuance sale, voting, registration or repurchase of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms, (ii) as required by Contracts in effect as of the date of this Agreement that are listed in Section 4.05 of the Company Disclosure Schedule and (iii) the issuance of its capital stock of the Company as a dividend in respect of Preferred Stock outstanding on the date hereof in accordance with its present termsstock;
(ib) acquire (by merger, consolidation directly or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof, (ii) indirectly sell, lease transfer, lease, pledge, mortgage, encumber or otherwise dispose of a Subsidiary or (iii) sell, lease or otherwise dispose any of an amount of assets or securities, including IRUs, for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), except for transactions in the ordinary course consistent with past practice;
(d) merge or consolidate with any other Person;
(e) make any investment, whether by purchase of stock or securities, contributions to capital or any property transfer (other than investments in cash or cash equivalents with a maturity of less than 90 days or investments in wholly-owned Subsidiaries made, in each case, in the ordinary course of business consistent with past practice), or purchase for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), any its property or assets of any other individual or entity, except for inventory purchased for resale than in the ordinary course of business consistent with past practice;
(c) make or propose any changes in the Company Certificate or the Company By-Laws;
(d) merge or consolidate with any other person;
(e) acquire an amount of assets or capital stock of any other person in excess of $1,000,000;
(f) enter into redeem any agreement rights under, amend or arrangement that limits modify, or propose to amend or modify, the Company Rights Agreement, as amended as of the date hereof;
(g) incur, create, assume or otherwise restricts become liable for any indebtedness for borrowed money or assume, guarantee, endorse or otherwise as an accommodation become responsible or liable for the obligations of any other individual, corporation or other entity, other than in the ordinary course of business, consistent with past practice;
(h) create any new Subsidiaries;
(i) increase the compensation or benefits payable or to become payable to its directors, officers or, except in the ordinary course of business consistent with past practice, other employees (whether from the Company or any of its Subsidiaries), or pay or award or accelerate any benefit not required by any existing plan or arrangement to any officer, director or employee (including, without limitation, the Subsidiaries granting of stock options, stock appreciation rights, shares of restricted stock or performance units pursuant to the Company Benefit Plans or otherwise), or grant any severance or termination pay to any officer, director or other employee of their respective Affiliates or successors thereto or that by its terms could, after the Effective Time, limit or restrict Parent or the Company or any of their respective Affiliates its Subsidiaries (other than as required by existing agreements or policies described in Section 5.1 of the Company Disclosure Schedule), or enter into or amend any employment or severance agreement with, any director, officer or other employee of the Company or any successor theretoof its Subsidiaries or establish, from engaging adopt, enter into, amend, or competing waive any performance or vesting criteria under any Company Benefit Plan for the benefit or welfare of any current or former directors, officers or employees of the Company or its Subsidiaries or their beneficiaries or dependents, except, in any line of business each case, to the extent required by applicable Law or in any geographic arearegulation;
(gj) change any method or principle of financial accounting in a manner that is inconsistent with past practice except to the extent required by GAAP as advised by the Company's regular independent accountants, make any Tax election (unless required by law or made in the ordinary course of business consistent with past practice), settle or compromise any Tax liability of the Company or any of its Subsidiaries in excess of $500,000 or any pending or threatened suit, action or claim relating to any potential or actual Tax liability of the Company or any of its Subsidiaries in excess of $500,000, change any method of accounting for Tax purposes or file (other than in a manner consistent with past practice) any Tax Return;
(k) settle any Actions, whether now pending or hereafter made or brought involving, individually, an amount in excess of $500,000 or, in the aggregate, an amount in excess of $1,000,000, or enter into any consent decree, injunction or other similar restraint or form of equitable relief in settlement of any Action;
(l) modify, amend or terminate, or waive, release or assign any material rights or claims with respect to any confidentiality agreement to which the Company is a party;
(m) enter into any confidentiality agreements or arrangements other than in the ordinary course of business consistent with past practice, waive, release or relinquish any material rightpractice (other than as permitted by Section 6.13);
(hn) other than in write up, write down or write off the ordinary course of business consistent with past practice, modify or change in any material respect any existing material license, lease, contract, or other agreement;
(i) enter into any agreements involving aggregate expenditures or receipts of more than $100,000 individually or $500,000 in the aggregate (or, with respect to (i) any Cost of Services Contract, $1,000,000 and (ii) switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any agreements in the ordinary course of business consistent with past practice, including but not limited to installation fees and customer premise equipment, in each case, associated with new customers and in the ordinary course of business consistent with past practice;
(j) create, incur or assume, or execute any new guarantee of, any Indebtedness in excess of $100,000 in the aggregate (other than indebtedness for borrowed money owing to W or any of its Affiliates) or prepay any Indebtedness;
(k) other than pursuant to arrangements existing on the date hereof, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for obligations book value of any other person (other than any Subsidiary) assets, individually in an amount in excess of $100,000;
(l) make any loans or advances other than (i) loans or advances to wholly-owned Subsidiaries made in the ordinary course of business consistent with past practice and (ii) routine salary, travel and expense advances to Company Employees in the ordinary course of business consistent with past practice;
(i) engage in any transaction, or enter into any contract, agreement or arrangement (other than this Agreement, the Transactions and the incurrence of indebtedness for borrowed money owing to W or any of its Affiliates and transactions pursuant to any such contract, agreement or arrangement entered into on or prior to the date hereof), with any Affiliate, (ii) engage in any transaction, or enter into any contract, agreement or arrangement, with any portfolio company of W that is not on arm's length terms and in the ordinary course of business, or (iii) amend, waive or relinquish any rights relating to any such transaction, contract, agreement or arrangement referred to in clause (i) or (ii) that will remain outstanding after the Closing in accordance with Section 8.05;
(n) authorize any new capital expenditures which, individually, are greater than $100,000 250,000 or, in the aggregate, would cause total capital expenditures in an amount in excess of $750,000, except for year ending December 31, 2003 to exceed $500,000 (or, depreciation and amortization in accordance with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any capital expenditures in the ordinary course of business consistent with past practiceGAAP consistently applied;
(o) split, combine incur or reclassify commit to any shares of its capital stock; declare, set aside or pay any dividend or other distribution expenditures unless such capital expenditure is reflected in the budget previously provided to Parent (whether in cash, stock or property the "Budget") or any combination thereof) other items that, individually or in respect the aggregate, are not in excess of its capital stock, other than (i) cash dividends and distributions by a wholly-owned Subsidiary to the Company or to a Subsidiary all of the capital stock which is owned directly or indirectly by the Company or (ii) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms; or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its securities or any securities of the Subsidiaries$750,000;
(p) take any action to exempt or make not subject to (i) increase the compensation provisions of Section 203 of the DGCL or fringe benefits of any Company Employee (except for (x) increases in salary or wages in the ordinary course of business consistent with past practice, (y) the payment of accrued or earned but unpaid bonuses and (z) stay bonuses or similar retention payments in an amount not to exceed $10,000 with respect to any individual payment and $100,000 in the aggregate with respect to all such payments), (ii) grant any severance or termination pay to any Company Employee, (iii) loan or advance any money other state takeover Law or other property state Law that purports to limit or restrict business combinations or the ability to acquire or vote shares, any Company Employee person or entity (other than routine salary, travel and expense advances to Company Employees in the ordinary course of business and consistent with past practice), (ivParent or its Subsidiaries) establish, adopt, enter into, amend or terminate any Company Plan, collective bargaining or labor agreement or any planaction taken thereby, agreementwhich person, program, policy, trust, fund entity or other arrangement that action would be a Company Plan if it were in existence as of otherwise have been subject to the date of this Agreement (other than as may be required by the terms of an existing Company Plan or collective bargaining agreement, or as may be required by applicable law or in order to qualify under Sections 401 restrictive provisions thereof and 501 of the Code), or (v) grant any equity or equity-based awards, other than in the cases of clauses (i) through (v) pursuant to commitments of the Company or any Subsidiary existing on the date hereof required by contracts set forth in Section 4.08(k) or Section 4.12 of the Company Disclosure Schedulenot exempt therefrom;
(q) payenter into any transaction or agreement, discharge or satisfy amend any claims, liabilities existing agreement between the Company or obligations any of its Subsidiaries and any director or executive officer of the Company;
(whether absolute, accrued, asserted r) enter into or unasserted, contingent or otherwise), carry out any other material transaction other than the payment, discharge or satisfaction in the ordinary course of business of liabilities reflected or reserved against in the consolidated financial statements of the Company referred to in Section 4.07 or liabilities incurred in the ordinary and usual course of business;
(r) make or change any tax election or settle or compromise any income tax liability;
(s) other than in knowingly take any action that would prevent or impede the ordinary course Merger (unless Parent makes a Cash Election) from qualifying as a "reorganization" within the meaning of business consistent with past practice, change any method Section 368 of accounting, accounting policy or accounting practice, except for any such change required by reason of a concurrent change in GAAP as concurred with by the Company's independent auditorsCode;
(t) fail agree in writing or otherwise to maintain insurance coverage at presently existing levels;
(u) make any repayments of principal to W or its Affiliates in respect of any Indebtedness owed to W or its Affiliates or any payment of interest accrued in respect of such Indebtedness;
(v) agree or commit to do take any of the foregoing; or
(w) knowingly take or agree or commit to take any action that would make any representation and warranty of W or the Company hereunder inaccurate in any material respect at, or as of any time prior to, the Closing, except for any representations or warranties that are made as of a specified dateforegoing actions.
Appears in 1 contract
Covenants Relating to Conduct of Business. Section 7.01. 5.1 Conduct of Business by the CompanyCompany Pending the Merger. From Except as expressly permitted by clauses (i) through (xvii) of this Section 5.1, during the period from the date hereof until of this Agreement through the Closingelection or appointment of Sub's designees pursuant to Section 6.3, the Company and the Subsidiaries shall conduct their in all material respects carry on its business in the ordinary course of its business as currently conducted and, to the extent consistent with past practice in compliance with all applicable laws and shall therewith, use their reasonable best efforts to preserve intact their its current business organizations and relationships with third parties and to organizations, keep available the services of their present its current officers and employeesemployees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time. Without limiting the generality of the foregoing, from the date hereof until the Closing and except as otherwise expressly contemplated by this Agreement or the other Transaction Agreements, as may result from the consummation of the Transactions, as set forth in Section 7.01 of the Company Disclosure Schedule, or as otherwise consented to in writing by Parent Letter (except if such consent would be inconsistent with applicable law), such consent not to be unreasonably withheld with respect specific reference to the granting of IRUs in fiber and/or conduit by the Company or the Subsidiariesapplicable subsection below), the Company shall not and shall cause not, without the Subsidiaries not toprior written consent of Parent:
(ai) adopt (A) declare, set aside or propose pay any change dividends on, or make any other actual, constructive or deemed distributions in respect of, any of its articles capital stock, or otherwise make any payments to its stockholders in their capacity as such, (B) split, combine or reclassify any of incorporationits capital stock or issue or authorize the issuance of any other securities in respect of, bylaws in lieu of or in substitution for shares of its capital stock or (C) purchase, redeem or otherwise acquire any shares of capital stock of the Company or any other securities thereof or any rights, warrants or options to acquire any such shares or other organizational documentssecurities;
(bii) issue, deliver, sell, pledge pledge, grant, dispose of or transfer otherwise encumber any shares of its capital stock, or authorize or propose the issuance, delivery, sale, pledge pledge, grant, disposition or transfer encumbrance of any shares of its capital stock of any class other voting securities or equity equivalent or any securities convertible into or exercisable forinto, or any rights, warrants, warrants or options or other rights (including options under the Company Option Plans) to acquire, acquire any such shares shares, voting securities, equity equivalent or enter into any agreement with respect to the foregoing convertible securities, other than (iA) the issuance of shares of Company Common Stock upon the exercise of Company Stock Options outstanding on the date of this Agreement in accordance with their current terms, and (B) the issuance of shares of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms, (ii) as required by Contracts in effect as of the date of this Agreement that are listed in Section 4.05 of the Company Disclosure Schedule and Warrants;
(iii) the issuance of capital stock of the Company as a dividend in respect of Preferred Stock outstanding on the date hereof in accordance with amend its present termscharter or by-laws or equivalent organizational documents;
(iiv) acquire (or agree to acquire by mergermerging or consolidating with, consolidation or acquisition by purchasing a substantial portion of stock the assets of or assets) equity in, or by any other manner, any business or any corporation, partnership limited liability company, partnership, association or other business organization or division thereof, thereof or otherwise acquire or agree to acquire any assets;
(iiv) sell, lease lease, pledge or otherwise dispose of a Subsidiary or (iii) encumber, or agree to sell, lease lease, pledge or otherwise dispose of an amount or encumber, any of its assets or securities, including IRUs, for an amount with a fair market value in excess of $100,000 (orindividually, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, or $1,000,000), except for transactions 500,000 in the ordinary course consistent with past practice;
(d) merge or consolidate with any other Person;
(e) make any investmentaggregate, whether by purchase of stock or securities, contributions to capital or any property transfer (other than investments in cash or cash equivalents with a maturity sales of less than 90 days or investments in wholly-owned Subsidiaries madeinventory, in each case, in the ordinary course of business consistent with past practice), or purchase for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), any property or assets of any other individual or entity, except for inventory purchased for resale products and services that are in the ordinary course of business consistent with past practice;
(fvi) enter into incur any agreement indebtedness for borrowed money, guarantee any such indebtedness or arrangement that limits make any loans, advances or otherwise restricts the Company capital contributions to, or other investments in, any of the Subsidiaries other person or any of their respective Affiliates or successors thereto or that by its terms couldentity, after the Effective Time, limit or restrict Parent or the Company or any of their respective Affiliates or any successor thereto, from engaging or competing in any line of business or in any geographic area;
(g) other than in the ordinary course of business consistent with past practice, waive, release or relinquish any material right;
(h) other than in the ordinary course of business consistent with past practice, modify or change in any material respect any existing material license, lease, contract, or other agreement;
(i) enter into any agreements involving aggregate expenditures or receipts of more than $100,000 individually or $500,000 in the aggregate (or, with respect to (i) any Cost of Services Contract, $1,000,000 and (ii) switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any agreements in the ordinary course of business consistent with past practice, including but not limited to installation fees and customer premise equipment, in each case, associated with new customers and in the ordinary course of business consistent with past practice;
(j) create, incur or assume, or execute any new guarantee of, any Indebtedness in excess of $100,000 in the aggregate (other than indebtedness for borrowed money owing to W or any of its Affiliates) or prepay any Indebtedness;
(k) other than pursuant to arrangements existing on the date hereof, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for obligations of any other person (other than any Subsidiary) in an amount in excess of $100,000;
(l) make any loans or advances other than (i) loans or advances to wholly-owned Subsidiaries made in the ordinary course of business consistent with past practice and (ii) routine salary, travel and expense advances to Company Employees in the ordinary course of business consistent with past practice;
(i) engage in any transaction, or enter into any contract, agreement or arrangement (other than this Agreement, the Transactions and the incurrence of indebtedness for borrowed money owing to W or any of its Affiliates and transactions pursuant to any such contract, agreement or arrangement entered into on or prior to the date hereof), with any Affiliate, (ii) engage in any transaction, or enter into any contract, agreement or arrangement, with any portfolio company of W that is not on arm's length terms and in the ordinary course of business, or (iii) amend, waive or relinquish any rights relating to any such transaction, contract, agreement or arrangement referred to in clause (i) or (ii) that will remain outstanding after the Closing in accordance with Section 8.05;
(n) authorize any new capital expenditures which, individually, are greater than $100,000 or, in the aggregate, would cause total capital expenditures for year ending December 31, 2003 to exceed $500,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any capital expenditures in the ordinary course of business consistent with past practice;
(o) split, combine or reclassify any shares of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, other than (i) cash dividends and distributions by a wholly-owned Subsidiary to the Company or to a Subsidiary all of the capital stock which is owned directly or indirectly by the Company or (ii) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms; or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its securities or any securities of the Subsidiaries;
(p) (i) increase the compensation or fringe benefits of any Company Employee (except for (x) increases in salary or wages in the ordinary course of business consistent with past practice, (y) the payment of accrued or earned but unpaid bonuses and (z) stay bonuses or similar retention payments in an amount not to exceed $10,000 with respect to any individual payment and $100,000 in the aggregate with respect to all such payments), (ii) grant any severance or termination pay to any Company Employee, (iii) loan or advance any money or other property to any Company Employee (other than routine salary, travel and expense advances to Company Employees in the ordinary course of business and consistent with past practice), (iv) establish, adopt, enter into, amend or terminate any Company Plan, collective bargaining or labor agreement 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 of this Agreement (other than as may be required by the terms of an existing Company Plan or collective bargaining agreement, or as may be required by applicable law or in order to qualify under Sections 401 and 501 of the Code), or (v) grant any equity or equity-based awards, other than in the cases of clauses (i) through (v) pursuant to commitments of the Company or any Subsidiary existing on the date hereof required by contracts set forth in Section 4.08(k) or Section 4.12 of the Company Disclosure Schedule;
(q) pay, discharge or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business of liabilities reflected or reserved against in the consolidated financial statements of the Company referred to in Section 4.07 or liabilities incurred in the ordinary course of business;
(r) make or change any tax election or settle or compromise any income tax liability;
(s) other than in the ordinary course of business consistent with past practice, change any method of accounting, accounting policy or accounting practice, except for any such change required by reason of a concurrent change in GAAP as concurred with by the Company's independent auditors;
(t) fail to maintain insurance coverage at presently existing levels;
(u) make any repayments of principal to W or its Affiliates in respect of any Indebtedness owed to W or its Affiliates or any payment of interest accrued in respect of such Indebtedness;
(v) agree or commit to do any of the foregoing; or
(w) knowingly take or agree or commit to take any action that would make any representation and warranty of W or the Company hereunder inaccurate in any material respect at, or as of any time prior to, the Closing, except for any representations or warranties that are made as of a specified date.
Appears in 1 contract
Samples: Merger Agreement (Careerbuilder Inc)
Covenants Relating to Conduct of Business. Section 7.015.1 CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGER. Conduct of During the Company. From period from the date hereof until of this Agreement through the ClosingEffective Time, the Company and the Subsidiaries shall conduct their in all material respects carry on its business in the ordinary course of its business as currently conducted and, to the extent consistent with past practice in compliance with all applicable laws and shall therewith, use their its commercially reasonable best efforts to preserve intact their its current business organizations and relationships with third parties and to organizations, keep available the services of their present its current officers and employeesemployees and preserve its relationships with customers, suppliers and others having business dealings with it. Without limiting the generality of the foregoing, from the date hereof until the Closing and except as otherwise expressly contemplated by this Agreement or the other Transaction Agreements, as may result from the consummation of the Transactions, as set forth in Section 7.01 of the Company Disclosure Schedule, or as otherwise consented to in writing by Parent (except if such consent would be inconsistent with applicable law), such consent not to be unreasonably withheld with respect to the granting of IRUs in fiber and/or conduit by the Company or the SubsidiariesAgreement, the Company shall not and shall cause without the Subsidiaries not toprior written consent of Parent:
(ai) adopt (A) declare, set aside or propose pay any change dividends on, or make any other actual, constructive or deemed distributions in respect of, any of its articles capital stock, or otherwise make any payments to its shareholders in their capacity as such, (B) split, combine or reclassify any of incorporationits capital stock or issue or authorize the issuance of any other securities in respect of, bylaws in lieu of or in substitution for shares of its capital stock or (C) purchase, redeem or otherwise acquire any shares of capital stock of the Company or any other securities thereof or any rights, warrants or options to acquire any such shares or other organizational documentssecurities;
(bii) issue, deliver, sell, pledge pledge, dispose of or transfer or authorize or propose the issuance, delivery, sale, pledge or transfer of otherwise encumber any shares of its capital stock of stock, any class other voting securities or equity equivalent or any securities convertible into or exercisable forinto, or any rights, warrants, warrants or options or other rights (including options under the Company Stock Option Plan) to acquire, acquire any such shares shares, voting securities, equity equivalent or enter into any agreement with respect to the foregoing convertible securities, other than (iA) the issuance of shares of Company Common Stock upon the exercise of Company Stock Options outstanding on the date of this Agreement in accordance with their current terms, (B) the issuance of shares of Company Common Stock upon exercise of stock options the Shareholder Warrants, Representative Warrants or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present termsExecutive Warrant, (ii) as required by Contracts in effect as of the date of this Agreement that are listed in Section 4.05 of the Company Disclosure Schedule and (iiiC) the issuance of capital stock shares of Company Common Stock pursuant to the Stock Option Agreement and (D) as set forth in Section 5.1(ii) of the Company as a dividend in respect of Preferred Stock outstanding on the date hereof in accordance with its present termsLetter;
(iiii) amend the Company Charter or Company Bylaws;
(iv) acquire (or agree to acquire by mergermerging or consolidating with, consolidation or acquisition by purchasing a substantial portion of stock the assets of or assets) equity in, or by any other manner, any business or any corporation, partnership limited liability company, partnership, association or other business organization or division thereof, ;
(iiv) sell, lease or otherwise dispose of a Subsidiary of, or (iii) agree to sell, lease or otherwise dispose of, any of an amount of assets or securitiesits assets, including IRUs, for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), except for transactions in the ordinary course consistent with past practice;
(d) merge or consolidate with any other Person;
(e) make any investment, whether by purchase of stock or securities, contributions to capital or any property transfer (other than investments in cash or cash equivalents with a maturity sales of less than 90 days or investments in wholly-owned Subsidiaries made, in each case, in the ordinary course of business consistent with past practice), or purchase for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), any property or assets of any other individual or entity, except for inventory purchased for resale that are in the ordinary course of business consistent with past practice;
(fvi) enter into incur any agreement indebtedness for borrowed money, guarantee any such indebtedness or arrangement that limits make any loans, advances or otherwise restricts the Company or any of the Subsidiaries or any of their respective Affiliates or successors thereto or that by its terms could, after the Effective Time, limit or restrict Parent or the Company or any of their respective Affiliates or any successor thereto, from engaging or competing in any line of business or in any geographic area;
(g) other than in the ordinary course of business consistent with past practice, waive, release or relinquish any material right;
(h) other than in the ordinary course of business consistent with past practice, modify or change in any material respect any existing material license, lease, contractcapital contributions to, or other agreement;
(i) enter into investments in, any agreements involving aggregate expenditures or receipts of more than $100,000 individually or $500,000 in the aggregate (or, with respect to (i) any Cost of Services Contract, $1,000,000 and (ii) switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000)other person, other than any agreements in the ordinary course of business consistent with past practice, including but not limited to installation fees and customer premise equipment, in each case, associated with new customers and in the ordinary course of business consistent with past practice;
(jvii) createalter (through merger, incur liquidation, reorganization, restructuring or assume, in any other fashion) the corporate structure or execute any new guarantee of, any Indebtedness in excess ownership of $100,000 in the aggregate (other than indebtedness for borrowed money owing to W or any of its Affiliates) or prepay any IndebtednessCompany;
(kviii) other than pursuant to arrangements existing on the date hereofenter into or adopt any, assumeor amend any existing, guaranteeseverance plan, endorse agreement or otherwise become liable arrangement or responsible (whether directly, contingently enter into or otherwise) for obligations of amend any other person (other than any Subsidiary) in an amount in excess of $100,000Company Plan or employment or consulting agreement;
(lix) make any loans increase the compensation payable or advances other than to become payable to its directors, officers or employees (i) loans or advances to wholly-owned Subsidiaries made except for increases in the ordinary course of business consistent with past practice and (ii) routine salary, travel and expense advances to in salaries or wages of employees of the Company Employees in who are not officers of the ordinary course of business consistent with past practice;
(i) engage in any transaction, or enter into any contract, agreement or arrangement (other than this Agreement, the Transactions and the incurrence of indebtedness for borrowed money owing to W or any of its Affiliates and transactions pursuant to any such contract, agreement or arrangement entered into on or prior to the date hereof), with any Affiliate, (ii) engage in any transaction, or enter into any contract, agreement or arrangement, with any portfolio company of W that is not on arm's length terms and in the ordinary course of business, or (iii) amend, waive or relinquish any rights relating to any such transaction, contract, agreement or arrangement referred to in clause (iCompany) or (ii) that will remain outstanding after the Closing in accordance with Section 8.05;
(n) authorize any new capital expenditures which, individually, are greater than $100,000 or, in the aggregate, would cause total capital expenditures for year ending December 31, 2003 to exceed $500,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any capital expenditures in the ordinary course of business consistent with past practice;
(o) split, combine or reclassify any shares of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, other than (i) cash dividends and distributions by a wholly-owned Subsidiary to the Company or to a Subsidiary all of the capital stock which is owned directly or indirectly by the Company or (ii) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms; or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its securities or any securities of the Subsidiaries;
(p) (i) increase the compensation or fringe benefits of any Company Employee (except for (x) increases in salary or wages in the ordinary course of business consistent with past practice, (y) the payment of accrued or earned but unpaid bonuses and (z) stay bonuses or similar retention payments in an amount not to exceed $10,000 with respect to any individual payment and $100,000 in the aggregate with respect to all such payments), (ii) grant any severance or termination pay to to, or enter into any Company Employeeemployment or severance agreement with, (iii) loan any director or advance any money officer of the Company, or other property to any Company Employee (other than routine salary, travel and expense advances to Company Employees in the ordinary course of business and consistent with past practice), (iv) establish, adopt, enter into, or, except as may be required to comply with applicable law, amend in any material respect or terminate take action to enhance in any Company Planmaterial respect or accelerate any rights or benefits under, any labor, collective bargaining bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or labor agreement or any other plan, agreement, program, policy, trust, fund fund, policy or other arrangement that would be a for the benefit of any director, officer or employee;
(x) knowingly violate or knowingly fail to perform any obligation or duty imposed upon the Company Plan if it were in existence as of the date of this Agreement by any applicable material federal, state or local law, rule, regulation, guideline or ordinance;
(xi) make any change to accounting policies or procedures (other than as may actions required to be required taken by generally accepted accounting principles);
(xii) prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(xiii) settle or compromise any federal, state, local or foreign income tax dispute;
(xiv) settle or compromise any claims or litigation or commence any litigation or proceedings;
(xv) enter into or amend any agreement or contract (i) having a term in excess of 12 months and which is not terminable by the terms Company without penalty or premium by notice of an existing Company Plan 30 days or collective bargaining agreementless, (ii) which involves or as may be required by applicable law is expected to involve future payments of $100,000 or in order to qualify under Sections 401 and 501 of more during the Code)term thereof, or (viii) grant any equity other agreement or equity-based awardscontract material to the Company; or purchase any real property, or make or agree to make any new capital expenditure or expenditures (other than the purchase of real property) which in the cases aggregate are in excess of clauses (i) through (v) pursuant to commitments of the Company or any Subsidiary existing on the date hereof required by contracts set forth in Section 4.08(k) or Section 4.12 of the Company Disclosure Schedule$100,000;
(qxvi) pay, discharge or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business of any such claims, liabilities reflected or reserved against in the consolidated financial statements of the Company referred to in Section 4.07 or liabilities incurred in the ordinary course of business;
(r) make or change any tax election or settle or compromise any income tax liability;
(s) other than obligations, in the ordinary course of business consistent with past practice, change any method of accounting, accounting policy practice or accounting practice, except for any such change required by reason of a concurrent change in GAAP as concurred accordance with by the Company's independent auditorstheir terms;
(txvii) fail purchase or exercise the option to maintain insurance coverage at presently existing levels;purchase the aircraft pursuant to the Aircraft Purchase and Sale Agreement between the Company and VisionAire Corporation dated December 18, 1996; or
(uxviii) make any repayments of principal to W authorize, recommend, propose or its Affiliates in respect of any Indebtedness owed to W or its Affiliates or any payment of interest accrued in respect of such Indebtedness;
(v) agree or commit announce an intention to do any of the foregoing; or
(w) knowingly take or agree or commit to take any action that would make any representation and warranty of W or the Company hereunder inaccurate in any material respect at, or as enter into any contract, agreement, commitment or arrangement to do any of any time prior to, the Closing, except for any representations or warranties that are made as of a specified dateforegoing.
Appears in 1 contract
Samples: Merger Agreement (Harris Corp /De/)
Covenants Relating to Conduct of Business. Section 7.01. 5.1 Conduct of Business by the CompanyCompany Pending the Merger. From Except as expressly permitted by clauses (i) through (xvii) of this Section 5.1, during the period from the date hereof until of this Agreement through the ClosingEffective Time, the Company shall, and the shall cause each of its Subsidiaries shall conduct their to, in all material respects carry on its business in the ordinary course of its business as currently conducted and, to the extent consistent with past practice in compliance with all applicable laws and shall therewith, use their reasonable best efforts to preserve intact their its current business organizations and relationships with third parties and to organizations, keep available the services of their present its current officers and employeesemployees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time. Without limiting the generality of the foregoing, from the date hereof until the Closing and except as otherwise expressly contemplated by this Agreement or the other Transaction Agreements, as may result from the consummation of the Transactions, as set forth in Section 7.01 5.1 of the Company Disclosure Schedule, or as otherwise consented to in writing by Parent Letter (except if such consent would be inconsistent with applicable law), such consent not to be unreasonably withheld with respect specific reference to the granting of IRUs in fiber and/or conduit by the Company or the Subsidiariesapplicable subsection below), the Company shall not not, and shall cause not permit any of its Subsidiaries to, without the Subsidiaries not toprior written consent of Parent:
(ai) adopt (A) other than dividends paid by wholly-owned Subsidiaries, declare, set aside or propose pay any change dividends on, or make any other actual, constructive or deemed distributions in respect of, any of its articles capital stock, or otherwise make any payments to its stockholders in their capacity as such, (B) other than in the case of incorporationany Subsidiary, bylaws split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or (C) purchase, redeem or otherwise acquire any shares of capital stock of the Company or any other securities thereof or any rights, warrants or options to acquire any such shares or other organizational documentssecurities;
(bii) issue, deliver, sell, pledge pledge, grant, dispose of or transfer or authorize or propose the issuance, delivery, sale, pledge or transfer of otherwise encumber any shares of its capital stock of stock, any class other voting securities or equity equivalent or any securities convertible into or exercisable forinto, or any rights, warrants, warrants or options or other rights (including options under the Company Option Plans) to acquire, acquire any such shares shares, voting securities, equity equivalent or enter into any agreement with respect to the foregoing other than (i) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms, (ii) as required by Contracts in effect as of the date of this Agreement that are listed in Section 4.05 of the Company Disclosure Schedule and convertible securities;
(iii) the issuance of capital stock of the Company as a dividend in respect of Preferred Stock outstanding on the date hereof in accordance with amend its present termscharter or by-laws or equivalent organizational documents;
(iiv) acquire (or agree to acquire by mergermerging or consolidating with, consolidation or acquisition by purchasing a substantial portion of stock the assets of or assets) equity in, or by any other manner, any business or any corporation, partnership limited liability company, partnership, association or other business organization or division thereof, thereof or otherwise acquire or agree to acquire any assets;
(iiv) sell, lease lease, pledge or otherwise dispose of a Subsidiary or (iii) encumber, or agree to sell, lease lease, pledge or otherwise dispose of an amount or encumber, any of its assets or securities, including IRUs, for an amount with a fair market value in excess of $100,000 (or100,000, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), except for transactions in the ordinary course consistent with past practice;
(d) merge or consolidate with any other Person;
(e) make any investment, whether by purchase of stock or securities, contributions to capital or any property transfer (other than investments in cash or cash equivalents with a maturity sales of less than 90 days or investments in wholly-owned Subsidiaries made, in each case, in the ordinary course of business consistent with past practice), or purchase for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), any property or assets of any other individual or entity, except for inventory purchased for resale that are in the ordinary course of business consistent with past practice;
(fvi) enter into incur any agreement indebtedness for borrowed money, guarantee any such indebtedness or arrangement that limits make any loans, advances or otherwise restricts capital contributions to, or other investments in, any other person or entity, other than (A) in the ordinary course of business consistent with past practices and, in the case of indebtedness and guarantees, in an amount not to exceed $100,000 and (B) indebtedness, loans, advances, capital contributions and investments between the Company and any of its wholly-owned Subsidiaries or between any of such wholly-owned Subsidiaries, in each case in the ordinary course of business consistent with past practices;
(vii) alter (through merger, liquidation, reorganization, restructuring or in any other fashion) the corporate structure or ownership of the Company or any of its Subsidiaries;
(viii) except as required by applicable law, enter into or adopt any, or amend any existing, severance plan, agreement or arrangement or enter into or amend any Company Plan or employment or consulting agreement or fail to maintain in effect each key-man insurance policy currently in effect with respect to an employee of the Subsidiaries Company or any Subsidiary of their respective Affiliates the Company;
(ix) increase the compensation payable or successors thereto to become payable to its directors, officers or that by its terms could, after employees (except for increases in the Effective Time, limit ordinary course of business consistent with past practice in salaries or restrict Parent or wages of employees of the Company or any of their respective Affiliates its Subsidiaries who are not officers of the Company or any successor theretoof its Subsidiaries) or grant any severance or termination pay to, from engaging or competing in enter into any line employment or severance agreement with, any director or officer of business the Company or in any geographic areaof its Subsidiaries, or grant or otherwise award to any person any option or stock appreciation right or other right or benefit under the Company Option Plans, or establish, adopt, enter into, or, except as may be required to comply with applicable law, amend or take action to enhance or accelerate any rights or benefits under, any labor, collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee;
(gx) knowingly violate or knowingly fail to perform any obligation or duty imposed upon it or any Subsidiary by any applicable material federal, state, local or foreign law, rule, regulation, guideline or ordinance;
(xi) make any change to accounting policies or procedures (other than actions required to be taken by GAAP);
(xii) prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(xiii) settle or compromise any Tax liability;
(xiv) settle or compromise any claims or litigation in excess of $50,000 or commence any litigation or proceedings;
(xv) enter into or amend any agreement or contract (i) having a term in excess of 12 months and which is not terminable by the Company or a Subsidiary without penalty or premium by notice of 60 days or less or (ii) outside the ordinary course of business consistent with past practice, waivewhich involves or is expected to involve payments of $100,000 or more during the term thereof (provided that in the case of agreements or contracts with any customer, release the margins anticipated from any such agreement or relinquish contract shall be consistent in all material respects with historical margins); enter into, amend or terminate any other agreement or contract material right;
to the Company and its Subsidiaries, taken as a whole; or purchase any real property, or make or agree to make any new capital expenditure or expenditures (h) other than in the ordinary course purchase of business consistent with past practice, modify or change in any material respect any existing material license, lease, contract, or other agreement;
(ireal property) enter into any agreements involving aggregate expenditures or receipts of more than $100,000 individually or $500,000 which in the aggregate (or, with respect to (i) any Cost of Services Contract, $1,000,000 and (ii) switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any agreements in the ordinary course of business consistent with past practice, including but not limited to installation fees and customer premise equipment, in each case, associated with new customers and in the ordinary course of business consistent with past practice;
(j) create, incur or assume, or execute any new guarantee of, any Indebtedness in excess of $100,000 in the aggregate (other than indebtedness for borrowed money owing to W or any of its Affiliates) or prepay any Indebtedness;
(k) other than pursuant to arrangements existing on the date hereof, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for obligations of any other person (other than any Subsidiary) in an amount are in excess of $100,000;
(l) make any loans or advances other than (i) loans or advances to wholly-owned Subsidiaries made in the ordinary course of business consistent with past practice and (ii) routine salary, travel and expense advances to Company Employees in the ordinary course of business consistent with past practice;
(i) engage in any transaction, or enter into any contract, agreement or arrangement (other than this Agreement, the Transactions and the incurrence of indebtedness for borrowed money owing to W or any of its Affiliates and transactions pursuant to any such contract, agreement or arrangement entered into on or prior to the date hereof), with any Affiliate, (ii) engage in any transaction, or enter into any contract, agreement or arrangement, with any portfolio company of W that is not on arm's length terms and in the ordinary course of business, or (iii) amend, waive or relinquish any rights relating to any such transaction, contract, agreement or arrangement referred to in clause (i) or (ii) that will remain outstanding after the Closing in accordance with Section 8.05;
(n) authorize any new capital expenditures which, individually, are greater than $100,000 or, in the aggregate, would cause total capital expenditures for year ending December 31, 2003 to exceed $500,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any capital expenditures in the ordinary course of business consistent with past practice;
(o) split, combine or reclassify any shares of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, other than (i) cash dividends and distributions by a wholly-owned Subsidiary to the Company or to a Subsidiary all of the capital stock which is owned directly or indirectly by the Company or (ii) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms; or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its securities or any securities of the Subsidiaries;
(p) (i) increase the compensation or fringe benefits of any Company Employee (except for (x) increases in salary or wages in the ordinary course of business consistent with past practice, (y) the payment of accrued or earned but unpaid bonuses and (z) stay bonuses or similar retention payments in an amount not to exceed $10,000 with respect to any individual payment and $100,000 in the aggregate with respect to all such payments), (ii) grant any severance or termination pay to any Company Employee, (iii) loan or advance any money or other property to any Company Employee (other than routine salary, travel and expense advances to Company Employees in the ordinary course of business and consistent with past practice), (iv) establish, adopt, enter into, amend or terminate any Company Plan, collective bargaining or labor agreement 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 of this Agreement (other than as may be required by the terms of an existing Company Plan or collective bargaining agreement, or as may be required by applicable law or in order to qualify under Sections 401 and 501 of the Code), or (v) grant any equity or equity-based awards, other than in the cases of clauses (i) through (v) pursuant to commitments of the Company or any Subsidiary existing on the date hereof required by contracts set forth in Section 4.08(k) or Section 4.12 of the Company Disclosure Schedule;
(qxvi) pay, discharge or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business of any such claims, liabilities reflected or reserved against in the consolidated financial statements of the Company referred to in Section 4.07 or liabilities incurred in the ordinary course of business;
(r) make or change any tax election or settle or compromise any income tax liability;
(s) other than obligations in the ordinary course of business consistent with past practice, change any method of accounting, accounting policy practice or accounting practice, except for any such change required by reason of a concurrent change in GAAP as concurred accordance with by the Company's independent auditors;their terms; or
(txvii) fail to maintain insurance coverage at presently existing levels;
(u) make any repayments of principal to W authorize, recommend, propose or its Affiliates in respect of any Indebtedness owed to W or its Affiliates or any payment of interest accrued in respect of such Indebtedness;
(v) agree or commit announce an intention to do any of the foregoing; or
(w) knowingly take or agree or commit to take any action that would make any representation and warranty of W or the Company hereunder inaccurate in any material respect at, or as enter into any contract, agreement, commitment or arrangement to do any of any time prior to, the Closing, except for any representations or warranties that are made as of a specified dateforegoing.
Appears in 1 contract
Covenants Relating to Conduct of Business. Section 7.01. Conduct of PENDING THE MERGER
(i) amend, modify, waive, rescind or otherwise change the Company. From the date hereof until the Closing, the ’s or any Company and the Subsidiaries shall conduct their business in the ordinary course consistent with past practice in compliance with all applicable laws and shall use their reasonable best efforts to preserve intact their business organizations and relationships with third parties and to keep available the services of their present officers and employees. Without limiting the generality of the foregoing, from the date hereof until the Closing and except as expressly contemplated by this Agreement or the other Transaction Agreements, as may result from the consummation of the Transactions, as set forth in Section 7.01 of the Company Disclosure Schedule, or as otherwise consented to in writing by Parent (except if such consent would be inconsistent with applicable law), such consent not to be unreasonably withheld with respect to the granting of IRUs in fiber and/or conduit by the Company or the Subsidiaries, the Company shall not and shall cause the Subsidiaries not to:
(a) adopt or propose any change in its articles Subsidiary’s certificate of incorporation, bylaws or other equivalent organizational documents, except as may be required by Law or the rules and regulations of the SEC or the NASDAQ;
(bii) issueauthorize, deliverdeclare, sellset aside, pledge make or transfer pay any dividends on or make any distribution with respect to its outstanding shares of capital stock or other equity interests (whether in cash, assets, shares or other securities of the Company or any Company Subsidiary), or enter into any agreement and arrangement with respect to voting or registration of its capital stock or other equity interests or securities;
(iii) split, combine, subdivide, reduce or reclassify any of its capital stock or other equity interests, or redeem, purchase or otherwise acquire any of its capital stock or other equity interests, or issue or authorize or propose the issuance, delivery, sale, pledge or transfer issuance of any of its capital stock or other equity interests or any other securities in respect of, in lieu of or in substitution for, shares of its capital stock of any class or any securities convertible into or exercisable for, other equity interests or any rights, warrants, warrants or options or other rights to acquire, acquire any such shares or enter into any agreement with respect to the foregoing other than (i) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms, (ii) as required by Contracts in effect as of the date of this Agreement that are listed in Section 4.05 of the Company Disclosure Schedule and (iii) the issuance of capital stock of the Company as a dividend in respect of Preferred Stock outstanding on the date hereof in accordance with its present terms;
(i) acquire (by merger, consolidation or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof, (ii) sell, lease or otherwise dispose of a Subsidiary or (iii) sell, lease or otherwise dispose of an amount of assets or securities, including IRUs, for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000)equity interests, except for transactions in the ordinary course consistent with past practice;
(d) merge or consolidate with any other Person;
(e) make any investment, whether by purchase of stock or securities, contributions to capital or any property transfer (other than investments in cash or cash equivalents with a maturity of less than 90 days or investments in wholly-such transaction involving only wholly owned Company Subsidiaries made, in each case, in the ordinary course of business consistent with past practice), or purchase for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), any property or assets of any other individual or entity, except for inventory purchased for resale in the ordinary course of business consistent with past practice;
(fiv) enter into issue, deliver, grant, sell, pledge, dispose of or encumber, or authorize the issuance, delivery, grant, sale, pledge, disposition or encumbrance of, any agreement shares in the capital stock, voting securities or arrangement that limits or otherwise restricts other equity interest in the Company or any Company Subsidiary or any securities convertible into or exchangeable or exercisable for any such shares, voting securities or equity interest, or any rights, warrants or options to acquire any such shares, voting securities or equity interest or any “phantom” stock, “phantom” stock rights, restricted stock, restricted stock units, performance-based or service-based equity awards, stock appreciation rights, stock-based performance units or equity-related awards whether payable in cash, stock or otherwise, or take any action to cause to be exercisable or vested any otherwise unexercisable or unvested Company Equity Award under any Company Equity Plan as in existence as of the Subsidiaries date hereof (except as otherwise provided by the express terms of any Company Equity Award as in existence as of the date hereof), other than (A) issuances of Company Common Stock in respect of any exercise of Company Options, the vesting or any settlement of Company Equity Awards outstanding as of the date hereof, in all cases in accordance with their respective Affiliates or successors thereto or that by its terms, (B) the issuances of Company Common Stock pursuant to the terms could, after the Effective Time, limit or restrict Parent or of the Company ESPP in respect of the Current ESPP Offering Periods (C) transactions solely between the Company and a wholly owned Company Subsidiary or any solely between wholly owned Company Subsidiaries; (D) the grant of their respective Affiliates Company Equity Awards in accordance with the terms set forth in Section 6.1(b)(iv)(D) of the Company Disclosure Letter or any successor thereto, from engaging or competing (E) as provided in any line clause (C) of business or in any geographic areasubsection (xvii) of this Section 6.1(b);
(gA) increase the compensation or benefits payable or to become payable to any of its directors, executive officers, employees or consultants of the Company, Company Subsidiaries or their respective ERISA Affiliates, except as set forth in Section 6.1(b)(v)(A) of the Company Disclosure Letter; (B) grant to any directors, executive officers, employees or consultants of the Company, Company Subsidiaries or their respective ERISA Affiliates any severance or termination pay or increases thereof, except for the payment of severance required pursuant to the terms of the Company Severance and Change in Control Plan, which such amounts are set forth on Section 6.1(b)(v)(B) of the Company Disclosure Letter, or as required by applicable statutory Law outside of the United States; (C) pay or award, or commit to pay or award, any bonuses, retention or incentive compensation to any directors, executive officers, employees or consultants of the Company, Company Subsidiaries or their respective ERISA Affiliates, except for bonuses, retention or incentive compensation pursuant to Contracts that are listed on Section 6.1(b)(v)(C) of the Company Disclosure Letter (all of which have been made available to Parent); (D) establish, adopt, enter into, amend or terminate any collective bargaining agreement or Company Benefit Plan; (E) take any action to amend or waive any performance or vesting criteria or accelerate vesting, exercisability or funding under any Company Benefit Plan; (F) terminate the employment or service of any employee at the level of vice president or above or substantially dedicated to engineering or manufacturing activities, or any director or executive officer, of the Company, Company Subsidiaries or their respective ERISA Affiliates, other than for cause; (G) hire any new employees or consultants at the level of vice president or above, or directors or executive officers, of the Company, Company Subsidiaries or their respective ERISA Affiliates, other than to hire employees in order to replace any individual employed with the ordinary course Company, Company Subsidiaries or their respective ERISA Affiliates as of business consistent with past practicethe date hereof, waivewhose employment terminates on or after the date hereof; (H) promote, release demote, transfer, or relinquish change the title, job position, authority, responsibilities or pay grade of any material rightdirectors, executive officers or employees or consultants of the Company, Company Subsidiaries or their respective ERISA Affiliates; or (I) provide any funding for any rabbi trust or similar arrangement;
(hvi) (A) acquire (including by merger, consolidation or acquisition of stock or assets or any other than in the ordinary course of business consistent with past practice, modify means) or change in any material respect any existing material license, lease, contractauthorize or announce an intention to so acquire, or other agreement;
(i) enter into any agreements involving aggregate expenditures providing for any acquisitions of (y) any equity interests in or receipts assets of more than any Person or any business or division thereof or (z) any other assets over $100,000 500,000 individually or $500,000 1,000,000 in the aggregate aggregate, or (orB) otherwise engage in any mergers, with respect to (i) any Cost consolidations or business combinations, except for transactions solely between the Company and a wholly owned Company Subsidiary or solely between wholly owned Company Subsidiaries or acquisitions of Services Contractsupplies, $1,000,000 and (ii) switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any agreements in the ordinary course of business consistent with past practice, including but not limited to installation fees and customer premise equipment, in each case, associated with new customers and inventory or equipment in the ordinary course of business consistent with past practice;
(jvii) create, incur or assume, or execute enter into any new guarantee of, any Indebtedness in excess line of $100,000 in the aggregate (other than indebtedness for borrowed money owing to W or any business outside of its Affiliates) or prepay any Indebtednessexisting business;
(kviii) other than pursuant take any actions or omit to arrangements existing on the date hereof, assume, guarantee, endorse take any actions that would or otherwise become liable or responsible (whether directly, contingently or otherwise) for obligations of any other person (other than any Subsidiary) in an amount in excess of $100,000;
(l) make any loans or advances other than would be reasonably likely to (i) loans or advances to wholly-owned Subsidiaries made in the ordinary course of business consistent with past practice and (ii) routine salary, travel and expense advances to Company Employees in the ordinary course of business consistent with past practice;
(i) engage result in any transaction, or enter into any contract, agreement or arrangement (other than this Agreement, of the Transactions and the incurrence of indebtedness for borrowed money owing to W or any of its Affiliates and transactions pursuant to any such contract, agreement or arrangement entered into on or prior to the date hereof), with any Affiliateconditions set forth in Article VIII not being satisfied, (ii) engage result in new or additional required approvals from any transactionGovernmental Entity in connection with the Transactions or (iii) materially delay or impair the ability of Parent, the Company or Merger Sub to consummate the Transactions in accordance with the terms of this Agreement or materially delay such consummation;
(ix) liquidate, dissolve, restructure, recapitalize or effect any other reorganization (including any reorganization or restructuring between or among any of the Company and/or any Company Subsidiaries), or enter into adopt any contractplan or resolution providing for any of the foregoing;
(x) make any loans, agreement advances or arrangementcapital contributions to, with or investments in, any portfolio company of W that is not on arm's length terms other Person, except for loans solely among the Company and its wholly owned Company Subsidiaries or solely among the Company’s wholly owned Company Subsidiaries or advances for reimbursable employee expenses, in each case, in the ordinary course of business, or (iii) amend, waive or relinquish any rights relating to any such transaction, contract, agreement or arrangement referred to in clause (i) or (ii) that will remain outstanding after the Closing in accordance with Section 8.05;
(nxi) authorize sell, lease, license, assign, abandon, permit to lapse, transfer, exchange, swap or otherwise dispose of, or subject to any new capital expenditures whichLien (other than Permitted Liens), individuallyany of its material properties, are greater than $100,000 or, rights or assets (including shares in the aggregate, would cause total capital expenditures for year ending December 31, 2003 to exceed $500,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any capital expenditures in the ordinary course of business consistent with past practice;
(o) split, combine or reclassify any shares of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, other than (i) cash dividends and distributions by a wholly-owned Subsidiary to the Company or to a Subsidiary all of the capital stock which is owned directly or indirectly by the Company Subsidiaries), except (A) dispositions of obsolete or (ii) the issuance of Company Common Stock upon exercise of stock options or warrantsworthless equipment, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms; or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its securities or any securities of the Subsidiaries;
(p) (i) increase the compensation or fringe benefits of any Company Employee (except for (x) increases in salary or wages in the ordinary course of business consistent with past practice, (yB) for transactions solely among the payment of accrued Company and its wholly owned Company Subsidiaries or earned but unpaid bonuses solely among wholly owned Company Subsidiaries and (zC) stay bonuses or similar retention payments in an amount not connection with any license of Company Intellectual Property incidental to exceed $10,000 with respect to any individual payment and $100,000 in the aggregate with respect to all such payments), (ii) grant any severance or termination pay to any sale of Company Employee, (iii) loan or advance any money or other property to any Company Employee (other than routine salary, travel and expense advances to Company Employees in the ordinary course of business and consistent with past practice), (iv) establish, adopt, enter into, amend or terminate any Company Plan, collective bargaining or labor agreement 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 of this Agreement (other than as may be required by the terms of an existing Company Plan or collective bargaining agreement, or as may be required by applicable law or in order to qualify under Sections 401 and 501 of the Code), or (v) grant any equity or equity-based awards, other than in the cases of clauses (i) through (v) pursuant to commitments of the Company or any Subsidiary existing on the date hereof required by contracts set forth in Section 4.08(k) or Section 4.12 of the Company Disclosure Schedule;
(q) pay, discharge or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business of liabilities reflected or reserved against in the consolidated financial statements of the Company referred to in Section 4.07 or liabilities incurred Products in the ordinary course of business;
(rxii) (A) enter into any Contract that would, if entered into prior to the date hereof, be a Material Contract, or into any Contract that grants any license to any Person under any Company Technology or Company Intellectual Property or (B) (1) materially modify, materially amend, extend or terminate any Material Contract (or the intellectual property licensing provisions of any other Contract) or (2) waive, release or assign any rights or claims thereunder;
(xiii) make or change any tax election material Tax election, adopt or change any Tax accounting period or material method of Tax accounting, file any amended Tax Return, settle or compromise any income tax liabilitymaterial liability for Taxes or any Tax audit, claim or other proceeding relating to a material amount of Taxes, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or any similar provision of state, local or non-U.S. Law), surrender any right to claim a material refund of Taxes, or, agree to an extension or waiver of the statute of limitations with respect to a material amount of Taxes;
(sxiv) commence (other than any collection action in the ordinary course of business consistent with past practicepractice or any action to enforce the provisions hereof), waive, release, assign, compromise or settle any claim, litigation, investigation or proceeding (for the avoidance of doubt, including with respect to matters in which the Company or any Company Subsidiary is a plaintiff, or in which any of their officers or directors in their capacities as such are parties), other than the compromise or settlement of claims, litigations, investigations or proceedings that are not brought by Governmental Entities and that: (A) is for an amount not to exceed, for any such compromise or settlement individually or in the aggregate, $1,500,000, (B) does not impose any injunctive relief on the Company and the Company Subsidiaries and does not involve the admission of wrongdoing by the Company, any Company Subsidiary or any of their respective officers or directors or otherwise establish a materially adverse precedent for similar settlements by Parent or any Parent Subsidiaries (including following the Effective Time the Company and the Company Subsidiaries) and (C) does not provide for the license of any material Company Intellectual Property;
(xv) make any change in financial accounting policies, practices, principles or procedures or any method of accountingits methods of reporting income, deductions or other material items for financial accounting policy purposes, except as required by GAAP or accounting practiceapplicable Law;
(xvi) amend or modify any Privacy Statement of the Company or any Company Subsidiary;
(xvii) redeem, repurchase, prepay, defease, incur, assume, endorse, guarantee or otherwise become liable for or modify in any material respects the terms of any Indebtedness or any derivative financial instruments or arrangements (including swaps, caps, floors, futures, forward contracts and option agreements), or issue or sell any debt securities or calls, options, warrants or other rights to acquire any debt securities (directly, contingently or otherwise), except for (A) any Indebtedness solely among the Company and its wholly owned Company Subsidiaries or solely among wholly owned Company Subsidiaries, (B) guarantees by the Company of Indebtedness of Company Subsidiaries or guarantees by Company Subsidiaries of Indebtedness of the Company or any other Company Subsidiary, which Indebtedness is incurred in compliance with this clause (xix), (C) any amendment, supplement, restatement, or modification to the Existing Credit Agreement provided that such change agreement remains terminable at the election of the Company, including any increase in the percentage of pledged shares pursuant to such Existing Credit Agreement, and (D) as may be required by reason the Convertible Senior Notes;
(xviii) enter into any transactions or Contracts with (A) any affiliates or other Person that would be required to be disclosed by the Company under Item 404 of Regulation S-K of the SEC or (B) any Person who beneficially owns, directly or indirectly, more than five percent (5%) of the outstanding shares of Company Common Stock;
(xix) cancel the Company’s insurance policies or fail to pay the premiums on the Company’s insurance policies such that such failure causes a concurrent change cancellation of such policy, or fail to use commercially reasonable efforts to maintain in GAAP as concurred the ordinary course the Company’s insurance policies;
(xx) enter into any agreement to purchase or sell any interest in real property, grant any security interest in any real property, enter into any lease, sublease, license or other occupancy agreement with respect to any real property, (B) modify or amend or exercise any right to renew any Company Lease or other lease or sublease of real property, or waive any term or condition thereof or grant any consents thereunder, (C) grant or otherwise create or consent to the creation of any easement, covenant, restriction, assessment or charge affecting any real property leased by the Company's independent auditors, or any interest therein or part thereof, (D) commit any waste or nuisance on any such property or (E) make any material changes in the construction or condition of any such property, in each case other than in the ordinary course of business;
(txxi) fail to maintain insurance coverage at presently existing levelsconvene any special meeting (or any adjournment or postponement thereof) of the Company Stockholders;
(uxxii) make terminate or modify or waive in any repayments of principal to W or its Affiliates in material respect of any Indebtedness owed to W or its Affiliates or right under any payment of interest accrued in respect of such IndebtednessCompany Permit;
(vxxiii) agree otherwise grant to any Party any present, past or commit to do future license, covenant, waiver or other right under, or Lien in respect of, any of the foregoing; orCompany Intellectual Property or Company Technology;
(wxxiv) knowingly take adopt or agree otherwise implement any stockholder rights plan, “poison-pill” or commit to other comparable agreement;
(xxv) take any action that would make any representation and warranty result in an adjustment (other than an adjustment as a result of W this Agreement or the Company hereunder inaccurate transactions contemplated hereby) to the Conversion Rate (as defined in the Convertible Notes Indenture) from 157.5101 shares of Common Stock (as defined in the Convertible Notes Indenture) per $1,000 principal amount of Convertible Senior Notes; or
(xxvi) agree or authorize, in writing or otherwise, to take any material respect at, or as of any time prior to, the Closing, except for any representations or warranties that are made as of a specified dateforegoing actions.
Appears in 1 contract
Samples: Merger Agreement (Tesla, Inc.)
Covenants Relating to Conduct of Business. (a) Except for matters set forth in Section 7.01. Conduct 6.1 of the Company. From LLC Disclosure Schedule, the ARM Disclosure Schedule or otherwise expressly permitted or required by the terms of this Agreement or except as required by Applicable Law, from the date hereof until of this Agreement to the Closing, the Company LLC and the Subsidiaries ARM shall conduct their business its respective Businesses in the ordinary course consistent with past practice in compliance with all applicable laws Ordinary Course of Business and shall use their reasonable best efforts to preserve keep intact their business organizations and relationships with third parties and to its respective Businesses, keep available the services of their present officers respective members, employees and agents and maintain its relations and good will, and to the extent applicable, preserve their respective relationships with patients, doctors, customers, suppliers, licensors, licensees, distributors landlords, creditors, employees, agents and others having business relationships with it. Without The LLC shall not take any action that would result in any of the conditions to the purchase and sale of the LLC Interests set forth in Article VII not being satisfied. In addition (and without limiting the generality of the foregoing), from the date hereof until the Closing and except as expressly contemplated by this Agreement or the other Transaction Agreements, as may result from the consummation of the Transactions, as set forth in Section 7.01 6.1 of the Company LLC Disclosure Schedule, the ARM Disclosure Schedule or otherwise expressly permitted or required by the terms of this Agreement or except as otherwise consented to in writing required by Parent Applicable Law, neither the LLC nor ARM shall do any of the following without the prior written consent of Purchaser (except if such which consent would be inconsistent with applicable law), such consent may not to be unreasonably withheld with respect to the granting of IRUs in fiber and/or conduit by the Company or the Subsidiaries, the Company shall not and shall cause the Subsidiaries not to:withheld):
(ai) adopt or propose any change in amend its articles of incorporation, bylaws organization or other organizational documentsoperating agreement;
(bii) issue, deliver, sell, pledge declare or transfer pay any dividend or authorize make any other distribution to its members whether or propose the issuance, delivery, sale, pledge not upon or transfer in respect of any shares of its capital stock of membership interests or other equity interest;
(iii) issue any class units, membership interests, or other equity interest or any option, warrant or right relating thereto or any securities convertible into or exercisable forexchangeable for any membership interests in the LLC or ARM, as applicable, or other equity interest;
(iv) adopt or amend any rightsLLC Benefit Plan (or any plan that would be a LLC Benefit Plan if adopted) or enter into, warrantsadopt, options extend (beyond the Closing Date), renew or amend any collective bargaining agreement or other rights Contract with any labor organization, union or association;
(v) except for the matters set forth in Section 6.1 of the LLC Disclosure Schedule or the ARM Disclosure Schedule, as applicable, establish or adopt any employee benefit plan or make any profit-sharing or similar payment to acquireany of its directors, officers, employees or independent contractors;
(vi) pay any bonus, increase the amount of the wages, salary, commissions, fees, fringe benefits or other compensation or remuneration payable to, any of its members, employees or independent contractors, except for any items not in excess of $500 individually or $5,000 in the aggregate;
(vii) incur or assume any Liabilities, obligations or Indebtedness for borrowed money or guarantee any such shares Liabilities, obligations or Indebtedness, other than in the Ordinary Course of Business;
(viii) permit, allow or suffer any of its assets to become subjected to any Lien (other than Permitted Liens) of any nature whatsoever that is not set forth on Section 3.6 of the LLC Disclosure Schedule or Section 4.6 of the ARM Disclosure Schedule, as applicable, and would have been required to be set forth in Section 3.6 of the LLC Disclosure Schedule or Section 4.6 of the ARM Disclosure Schedule, as applicable, if existing on the date of this Agreement;
(ix) pay, loan or advance any amount to, or sell, transfer or lease any of its assets to, or enter into any agreement with respect or arrangement with, any of the Sellers or any Affiliates of any of the Sellers, except for the matters set forth in Section 3.9 of the LLC Disclosure Schedule or Sections 4.15 and 4.29 of the ARM Disclosure Schedule, as applicable;
(x) make any change in any method of accounting or accounting practice or policy (other than those required by GAAP, if applicable);
(xi) acquire by merging or consolidating with, or by purchasing a substantial portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or otherwise acquire any assets (other than inventory) that are material;
(xii) make or incur capital expenditures that are not currently budgeted and that, in the aggregate, are in excess of $5,000;
(xiii) sell, lease, license or otherwise dispose of any of its assets that are material, individually or in the aggregate, to the foregoing other than LLC or ARM, as applicable, except inventory sold in the Ordinary Course of Business;
(ixiv) the issuance enter into any lease of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms, real property;
(iixv) as required by Contracts terminate any insurance policy in effect as of the date of this Agreement that are listed hereof or allow any material insurance policy to be terminated, in Section 4.05 of either case without using reasonable efforts to obtain a replacement insurance policy on comparable terms to the Company Disclosure Schedule and (iii) the issuance of capital stock of the Company LLC or ARM, as a dividend in respect of Preferred Stock outstanding on the date hereof in accordance with its present termsapplicable;
(ixvi) form any subsidiary or acquire the equity of any Person;
(xvii) commence or settle any Proceeding;
(xviii) enter into any Contract, transaction or take any other action outside the Ordinary Course of Business;
(xix) enter into any transaction or take any other action that the LLC knows will cause or constitute a breach of any representation or warranty made by mergerthe Sellers in this Agreement;
(xx) discontinue the payment of its accounts payable that are payable in the Ordinary Course of Business or deviate from or alter any of its practices, consolidation policies or acquisition procedures in paying accounts payable other than in the Ordinary Course of stock Business;
(xxi) make any material modification to any material Contract or assetsPermit; and
(xxii) make or change any corporationelection, partnership change an annual accounting period, adopt or change any accounting method, file any amended Tax Return, enter into any closing agreement, settle any Tax claim or assessment relating to the LLC or ARM, as applicable, surrender any right to claim a refund of Taxes, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the LLC or ARM, as applicable, or take other similar action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other business organization action would or division thereofcould be reasonably expected to increase any Tax liability of the LLC or ARM, (ii) sellas applicable, lease or otherwise dispose of a Subsidiary or (iii) sell, lease or otherwise dispose of an amount of assets or securities, including IRUs, for by an amount in excess of $100,000 2,000 for any period ending after the Closing Date; and
(orxxiii) agree, with respect commit or offer (in writing or otherwise) to switch software upgrades for purposes take any of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000actions described in clauses “(i)” through “(xxii)” of this Section 6.1.
(b) In addition (and without limiting the generality of the foregoing), except for transactions as set forth in Section 6.1 of the ordinary course consistent with past practice;
(d) merge or consolidate with any other Person;
(e) make any investmentLLC Disclosure Schedule, whether by purchase Section 6.1 of stock or securities, contributions to capital or any property transfer (other than investments in cash or cash equivalents with a maturity of less than 90 days or investments in wholly-owned Subsidiaries made, in each case, in the ordinary course of business consistent with past practice), or purchase for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), any property or assets of any other individual or entity, except for inventory purchased for resale in the ordinary course of business consistent with past practice;
(f) enter into any agreement or arrangement that limits ARM Disclosure Schedule or otherwise restricts the Company expressly permitted or any of the Subsidiaries or any of their respective Affiliates or successors thereto or that by its terms could, after the Effective Time, limit or restrict Parent or the Company or any of their respective Affiliates or any successor thereto, from engaging or competing in any line of business or in any geographic area;
(g) other than in the ordinary course of business consistent with past practice, waive, release or relinquish any material right;
(h) other than in the ordinary course of business consistent with past practice, modify or change in any material respect any existing material license, lease, contract, or other agreement;
(i) enter into any agreements involving aggregate expenditures or receipts of more than $100,000 individually or $500,000 in the aggregate (or, with respect to (i) any Cost of Services Contract, $1,000,000 and (ii) switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any agreements in the ordinary course of business consistent with past practice, including but not limited to installation fees and customer premise equipment, in each case, associated with new customers and in the ordinary course of business consistent with past practice;
(j) create, incur or assume, or execute any new guarantee of, any Indebtedness in excess of $100,000 in the aggregate (other than indebtedness for borrowed money owing to W or any of its Affiliates) or prepay any Indebtedness;
(k) other than pursuant to arrangements existing on the date hereof, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for obligations of any other person (other than any Subsidiary) in an amount in excess of $100,000;
(l) make any loans or advances other than (i) loans or advances to wholly-owned Subsidiaries made in the ordinary course of business consistent with past practice and (ii) routine salary, travel and expense advances to Company Employees in the ordinary course of business consistent with past practice;
(i) engage in any transaction, or enter into any contract, agreement or arrangement (other than this Agreement, the Transactions and the incurrence of indebtedness for borrowed money owing to W or any of its Affiliates and transactions pursuant to any such contract, agreement or arrangement entered into on or prior to the date hereof), with any Affiliate, (ii) engage in any transaction, or enter into any contract, agreement or arrangement, with any portfolio company of W that is not on arm's length terms and in the ordinary course of business, or (iii) amend, waive or relinquish any rights relating to any such transaction, contract, agreement or arrangement referred to in clause (i) or (ii) that will remain outstanding after the Closing in accordance with Section 8.05;
(n) authorize any new capital expenditures which, individually, are greater than $100,000 or, in the aggregate, would cause total capital expenditures for year ending December 31, 2003 to exceed $500,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any capital expenditures in the ordinary course of business consistent with past practice;
(o) split, combine or reclassify any shares of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, other than (i) cash dividends and distributions by a wholly-owned Subsidiary to the Company or to a Subsidiary all of the capital stock which is owned directly or indirectly by the Company or (ii) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms; or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its securities or any securities of the Subsidiaries;
(p) (i) increase the compensation or fringe benefits of any Company Employee (except for (x) increases in salary or wages in the ordinary course of business consistent with past practice, (y) the payment of accrued or earned but unpaid bonuses and (z) stay bonuses or similar retention payments in an amount not to exceed $10,000 with respect to any individual payment and $100,000 in the aggregate with respect to all such payments), (ii) grant any severance or termination pay to any Company Employee, (iii) loan or advance any money or other property to any Company Employee (other than routine salary, travel and expense advances to Company Employees in the ordinary course of business and consistent with past practice), (iv) establish, adopt, enter into, amend or terminate any Company Plan, collective bargaining or labor agreement 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 of this Agreement (other than as may be required by the terms of an existing Company Plan this Agreement or collective bargaining agreement, or except as may be required by applicable law or in order to qualify under Sections 401 and 501 of Applicable Law, the Code), or (v) grant any equity or equity-based awards, other than in the cases of clauses LLC shall:
(i) through promptly (vbut in any event, no later than three business days after the applicable matter or event) pursuant to commitments advise Purchaser in writing of the Company occurrence of any matter or event that (A) constitutes or would reasonably be expected to constitute a LLC Material Adverse Effect or ARM Material Adverse Effect, (B) resulted or would reasonably be expected to result in a material breach of any Subsidiary existing on the date hereof required by contracts of representations and warranties set forth in Section 4.08(kArticles III or IV of this Agreement or (C) would reasonably be expected to (i) constitute a Seller Material Adverse Effect with respect to Sellers or Section 4.12 (ii) 57 adversely affect the ability of the Company Disclosure ScheduleLLC to consummate the transactions contemplated by this Agreement;
(qii) pay, discharge or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than confer with Purchaser concerning operational matters of a material nature and otherwise report periodically to Purchaser concerning the payment, discharge or satisfaction in the ordinary course of business of liabilities reflected or reserved against in the consolidated financial statements status of the Company referred to in Section 4.07 or liabilities incurred in Business, operations, and finances of the ordinary course of businessLLC;
(riii) make or change any tax election or settle or compromise any income tax liabilityuse reasonable best efforts to maintain in full force and effect all Intellectual Property of the LLC;
(siv) other than comply with all Applicable Laws in the ordinary course operation of business consistent with past practice, change any method of accounting, accounting policy or accounting practice, except for any such change required by reason of a concurrent change in GAAP as concurred with by the Company's independent auditors;
(t) fail to maintain insurance coverage at presently existing levels;
(u) make any repayments of principal to W or its Affiliates in respect of any Indebtedness owed to W or its Affiliates or any payment of interest accrued in respect of such IndebtednessLLC’s Business;
(v) agree cooperate with the Purchaser and use its reasonable best efforts to cause the conditions to the Purchaser’s obligations to close specified in Article VII below to be satisfied and execute and deliver such further instruments of conveyance and transfer and take such additional action as the Purchaser may reasonably request to effect, consummate, confirm or commit evidence the transactions contemplated by this Agreement; and
(vi) upon reasonable request, use reasonable best efforts to do any arrange meetings with such customers, suppliers, licensors, licensees, distributors, landlords, creditors, employees, agents and others having business relationships with it as the Purchaser shall reasonably designate in order that the Purchaser and the LLC may confer with such Persons regarding the LLC and ARM and the nature of the foregoing; or
(w) knowingly take or agree or commit to take any action that would make any representation and warranty of W or the Company hereunder inaccurate in any material respect at, or as of any time prior to, the Closing, except for any representations or warranties that are made as of a specified datetransactions contemplated by this Agreement.
Appears in 1 contract
Samples: Membership Interest Purchase Agreement (Paincare Holdings Inc)
Covenants Relating to Conduct of Business. Section 7.01. Conduct of the Company. From the date hereof until the Closing, the Company and the Subsidiaries shall conduct their business in the ordinary course consistent with past practice in compliance with all applicable laws and shall use their reasonable best efforts to preserve intact their business organizations and relationships with third parties and to keep available the services of their present officers and employees. Without limiting the generality of the foregoing, from the date hereof until the Closing and except Except as expressly contemplated by this Agreement or the other Transaction Agreements, as may result from the consummation of the Transactions, as (a) set forth in Section 7.01 5.01 of the Company Seller Disclosure ScheduleLetter, (b) required by applicable Law, Judgment or as otherwise any Governmental Entity, (c) consented to in writing by Parent Purchaser (except if such consent would be inconsistent with applicable law), such consent not to be unreasonably withheld with respect withheld, conditioned or delayed) or (d) otherwise expressly contemplated or required by the terms of this Agreement, from the date of this Agreement to the granting of IRUs in fiber and/or conduit by the Company or the SubsidiariesClosing, the Company shall not and Seller shall cause the Subsidiaries Group Companies to (i) conduct the Business in the ordinary course in substantially the same manner as previously conducted and (ii) use reasonable best efforts to preserve substantially intact the business organizations, operations and goodwill of the Business and maintain in all material respects the present commercial relationships with key Persons with whom the Group Companies do business. In addition, except as (x) set forth in Section 5.01 of the Seller Disclosure Letter, (y) required by applicable Law, Judgment or any Governmental Entity or (z) otherwise expressly contemplated or required by the terms of this Agreement, from the date of this Agreement to the Closing, Seller shall not to:permit any Group Company to do any of the following without the prior written consent of Purchaser (such consent not to be unreasonably withheld, conditioned or delayed):
(ai) adopt or propose any change in amend its articles of incorporation, bylaws or other organizational documents;
(bii) issue(A) adjust, deliversplit, sell, pledge combine or transfer or authorize or propose the issuance, delivery, sale, pledge or transfer of reclassify any shares of its capital stock or other Equity Interests, (B) directly or indirectly redeem, repurchase, retire or otherwise acquire any capital stock or other Equity Interests or (C) effect any recapitalization, reclassification, stock dividend, stock split or like change in the capitalization in any Group Company;
(iii) issue, deliver, sell or transfer any shares of its capital stock or other Equity Interests, any class Company Stock Rights, any capital stock of or Equity Interests in any of the Subsidiaries of the Companies or any securities convertible into Subsidiary Stock Rights, other than issuances, deliveries, sales or exercisable for, or any rights, warrants, options transfers of capital stock or other rights Equity Interests of (A) any Subsidiary of the Companies to acquireanother Group Company or (B) the Excluded Entity;
(iv) declare or pay any dividend or make any other distribution to its equityholders; provided, any such shares or enter into any agreement with respect however, that prior to the foregoing other than Reference Time, (iA) dividends and distributions may be made by any Group Company to another Group Company, (B) dividends and distributions of cash may be made by the issuance of Company Common Stock upon exercise of stock options Companies to Seller or warrantsa Selling Affiliate, (C) distributions may be made by the Companies to Seller or conversion of Preferred Stock, outstanding on the date hereof a Selling Affiliate to pay off intercompany indebtedness and (D) distributions may be made in accordance with their present termsthe Pre-Closing Reorganization pursuant to Section 5.20;
(v) except (A) in the ordinary course of business in connection with a promotion of any Employee of the Business below the level of Vice President based on job performance, (iiB) as may be required by Contracts under applicable Law or any Benefit Plan or Business Collective Bargaining Agreement, as in effect as of the date of this Agreement that are listed in Section 4.05 of the Company Disclosure Schedule and (iii) the issuance of capital stock of the Company as a dividend in respect of Preferred Stock outstanding on or entered into after the date hereof of this Agreement in accordance compliance with its present terms;
this Agreement, (i) acquire (by merger, consolidation or acquisition of stock or assetsC) any corporation, partnership increases for which Seller or its Affiliates (other business organization or division thereof, (iithan the Group Companies) sell, lease or otherwise dispose of a Subsidiary shall be solely obligated or (iiiD) sell, lease in the case of any action that is generally applicable to employees of Seller and its Affiliates in a particular jurisdiction or otherwise dispose of an amount of assets or securities, including IRUs, for an amount in excess of $100,000 (orgeographic area, with respect to switch software upgrades for purposes any Employee of compliance with the Communication Assistance for Law Enforcement ActBusiness, $1,000,000)(1) adopt or amend any Benefit Plan, except for transactions if such adoption or amendment would result in a material increase in costs to Purchaser on or after the ordinary course consistent with past practice;
Closing Date, (d2) merge grant any material increase in base salary, wages, bonuses or consolidate with incentive compensation or accelerate the vesting or payment of any benefit, (3) enter into any employment, change of control, severance or retention agreement, (4) hire any employee who will become an Employee of the Business, other Person;
than the hiring of employees who will become Employees of the Business below the level of Vice President, (e5) make terminate the employment or engagement of any investment, whether by purchase Employee of stock or securities, contributions to capital or any property transfer the Business (other than investments in cash terminations for cause) at the level of Vice President or cash equivalents with a maturity above, (6) effectuate any plant closing, relocation of less work, or mass layoff that would incur any liability or obligation under the WARN Act, (7) grant or forgive any loans to an Employee of the Business (other than 90 days or investments in wholly-owned Subsidiaries madethe grant of loans for travel and business expenses, in each case, in the ordinary course of business consistent with past practice, and which will not exceed $5,000 for any individual), (8) transfer any Employee of the Business to any Affiliate of Seller (other than a Group Company) or purchase transfer any employee of any Affiliate of Seller (other than a Group Company) to any Group Company or (9) adopt, enter into, amend, modify or terminate any Business Collective Bargaining Agreement;
(vi) create, incur, assume or guarantee any indebtedness for borrowed money in an aggregate amount in excess of USD $100,000 1,000,000, other than such indebtedness (orA) as will be repaid and extinguished at or prior to the Closing or (B) in the ordinary course of business that is owed by any Group Company to any other Group Company, as applicable;
(vii) voluntarily subject any of its properties or assets to any Lien (other than any Permitted Lien) that would have been required to be set forth in Section 3.06 or Section 3.07(a) or (b) of the Seller Disclosure Letter if existing on the date of this Agreement;
(viii) (A) loan or advance any amount to any third party (other than loans or advances to employees for travel and business expenses in the ordinary course of business consistent with past practice), or (B) loan or advance any amount to, or enter into any agreement or arrangement with, Seller or any of its Affiliates, except for (x) transactions between or among the Group Companies or (y) intercompany transactions in the ordinary course of business and consistent with past practice;
(ix) make any change in any method of financial accounting or financial accounting practice or policy other than those required or permitted by GAAP or other applicable accounting standards (or any interpretation thereof) or required by applicable Law;
(x) acquire, by merging or consolidating with, or by purchasing a substantial portion of the properties or assets of, or by any other manner, any business or any Person or division thereof, or otherwise acquire or lease any properties or assets that are material to the Business other than (A) properties or assets in the ordinary course of business and consistent with past practice or (B) renewals of existing Leases in the ordinary course of business and consistent with past practice;
(xi) sell, lease (as lessor), sublease (as sublessor), license (as licensor) or otherwise dispose of any real property or tangible asset that is material, individually or in the aggregate with other like real property or tangible assets then being sold, leased, subleased, licensed or disposed, to the Business, except for (A) disposals of real properties or assets in the ordinary course of business and consistent with past practice and (B) subleases of Leased Real Property in the ordinary course of business and consistent with past practice;
(xii) abandon, allow to lapse or fail to maintain any material Group Company Registered Intellectual Property (other than abandonments, expirations, cancellations and the like occurring in the ordinary course of business that are not material, individually or in the aggregate, to the Business);
(xiii) transfer, assign or grant any license or sublicense to any Person of or with respect to switch software upgrades for purposes any material Group Company Registered Intellectual Property or Group Company Unregistered Intellectual Property, other than (A) the grant of compliance non-exclusive licenses pursuant to written license agreements in the ordinary course of business consistent with past practice and (B) any such transfer, assignment or grant that may be required pursuant to a Group Company Contract;
(xiv) adopt or enter into any plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization;
(xv) enter into any Contract that would have been required to be set forth in Section 3.09 of the Communication Assistance for Law Enforcement ActSeller Disclosure Letter if it were in effect on the date hereof, or modify, amend, terminate, cancel, extend or grant any Consent or waiver under any Group Company Contract in each case other than in the ordinary course of business and consistent with past practice;
(xvi) compromise, settle or agree to settle any material Proceeding involving a Group Company (other than any compromise, settlement or agreement (A) entered into in the ordinary course of business and consistent with past practice or (B) that imposes an aggregate monetary obligation of less than USD $1,000,0001,000,000 individually or in the aggregate; provided that (1) no non-monetary obligations (other than customary confidentiality obligations) are imposed on any Group Company and (2) no Group Company admits to any wrongdoing);
(xvii) acquire, any property agree to acquire, sell, transfer, lease , sublease, mortgage, encumber or assets otherwise dispose of any asset of any Group Company in excess of $500,000, in each case other individual or entity, except for than sales of inventory purchased for resale in the ordinary course of business consistent with past practice;
(fxviii) enter into any agreement or arrangement that limits or otherwise restricts except in the Company or any of the Subsidiaries or any of their respective Affiliates or successors thereto or that by its terms could, after the Effective Time, limit or restrict Parent or the Company or any of their respective Affiliates or any successor thereto, from engaging or competing in any line ordinary course of business consistent with past practice, cancel, surrender, allow to expire or in fail to renew, any geographic areaPermits;
(gxix) use or spend Cash at any time after the Reference Time, other than in the ordinary course of business consistent with past practice, waive, release ; provided that the repayment of Indebtedness or relinquish any material right;
(h) other than the payment of dividends or distributions shall not be deemed to be in the ordinary course of business consistent with past practice,
(xx) (A) fail to timely pay any material Tax that is due and payable by such Group Company, modify (B) settle or compromise any material Tax Proceeding, (C) make, revoke or change in any material Tax election, (D) file any material amended Tax Return, (E) surrender any claim for a refund of a material amount of Taxes, (F) consent to any extension or waiver of any limitation period with respect to any existing material licenseclaim or assessment for Taxes, lease, contract, or other agreement;
(iG) enter into any agreements involving aggregate expenditures “closing agreement” within the meaning of Section 7121 of the Code (or receipts any similar provision of more than $100,000 individually state, local, or $500,000 in the aggregate (or, non-U.S. law) with respect to a material amount of Taxes, or (iH) adopt or change any Cost of Services Contract, $1,000,000 and (ii) switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any agreements in the ordinary course of business consistent with past practice, including but not limited to installation fees and customer premise equipmentmaterial Tax accounting method, in each case, associated with new customers and in the ordinary course of business consistent with past practice;
(j) create, incur or assume, or execute any new guarantee of, any Indebtedness in excess of $100,000 in the aggregate (other than indebtedness for borrowed money owing to W or any of its Affiliates) or prepay any Indebtedness;
(k) other than pursuant to arrangements existing on the date hereof, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for obligations of any other person (other than any Subsidiary) in an amount in excess of $100,000;
(l) make any loans or advances other than (i) loans or advances to wholly-owned Subsidiaries made in the ordinary course of business consistent with past practice and (ii) routine salary, travel and expense advances to Company Employees in the ordinary course of business consistent with past practice;
(i) engage in any transaction, or enter into any contract, agreement or arrangement (other than this Agreement, the Transactions and the incurrence of indebtedness for borrowed money owing to W or any of its Affiliates and transactions pursuant to any such contract, agreement or arrangement entered into on or prior to the date hereof), with any Affiliate, (ii) engage in any transaction, or enter into any contract, agreement or arrangement, with any portfolio company of W that is not on arm's length terms and in the ordinary course of business, or (iii) amend, waive or relinquish any rights relating to any such transaction, contract, agreement or arrangement referred to in clause (i) or (ii) that will remain outstanding after the Closing in accordance with Section 8.05;
(n) authorize any new capital expenditures which, individually, are greater than $100,000 or, in the aggregate, would cause total capital expenditures for year ending December 31, 2003 to exceed $500,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any capital expenditures in the ordinary course of business consistent with past practice;
(o) split, combine or reclassify any shares of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, other than (i) cash dividends and distributions by a wholly-owned Subsidiary to the Company or to a Subsidiary all of the capital stock which is owned directly or indirectly by the Company or (ii) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms; or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its securities or any securities of the Subsidiaries;
(p) (i) increase the compensation or fringe benefits of any Company Employee (except for case (x) increases in salary or wages in the ordinary course of business consistent with past practice, (y) the payment of accrued or earned but unpaid bonuses and (z) stay bonuses or similar retention payments in an amount not to exceed $10,000 except with respect to any individual payment Taxes or Tax Returns of a Seller Consolidated Group and $100,000 in (y) to the aggregate with respect extent such action could reasonably be expected to all such payments), (ii) grant any severance or termination pay to any Company Employee, (iii) loan or advance any money or other property to any Company Employee (other than routine salary, travel and expense advances to Company Employees in increase the ordinary course of business and consistent with past practice), (iv) establish, adopt, enter into, amend or terminate any Company Plan, collective bargaining or labor agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Plan if it were in existence as Tax liability of the date of this Agreement (other than as may be required by the terms of an existing Company Plan or collective bargaining agreement, or as may be required by applicable law or in order to qualify under Sections 401 and 501 of the Code), or (v) grant any equity or equityGroup Companies for a Post-based awards, other than in the cases of clauses (i) through (v) pursuant to commitments of the Company or any Subsidiary existing on the date hereof required by contracts set forth in Section 4.08(k) or Section 4.12 of the Company Disclosure Schedule;Closing Tax Period; or
(q) pay, discharge or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business of liabilities reflected or reserved against in the consolidated financial statements of the Company referred to in Section 4.07 or liabilities incurred in the ordinary course of business;
(r) make or change any tax election or settle or compromise any income tax liability;
(s) other than in the ordinary course of business consistent with past practice, change any method of accounting, accounting policy or accounting practice, except for any such change required by reason of a concurrent change in GAAP as concurred with by the Company's independent auditors;
(t) fail to maintain insurance coverage at presently existing levels;
(u) make any repayments of principal to W or its Affiliates in respect of any Indebtedness owed to W or its Affiliates or any payment of interest accrued in respect of such Indebtedness;
(vxxi) agree or commit commit, whether in writing or otherwise, to do any of the foregoing; or
(w) knowingly take or agree or commit to take any action that would make any representation and warranty of W or the Company hereunder inaccurate in any material respect at, or as of any time prior to, the Closing, except for any representations or warranties that are made as of a specified date.
Appears in 1 contract
Covenants Relating to Conduct of Business. Section 7.01. 6.1 Conduct of Business by the CompanyCompany Pending the Merger. From Except as otherwise expressly contemplated by this Agreement or as described in the Company Disclosure Letter, during the period from the date hereof until of this Agreement through the ClosingEffective Time, the Company shall, and the shall cause its Subsidiaries shall conduct to carry on their business respective businesses in the regular and ordinary course consistent with past practice in compliance with all applicable laws and shall use their reasonable best efforts to course, preserve intact their current business organizations and relationships with third parties and organizations, and, to the extent consistent therewith, use its commercially reasonable efforts, keep available the services of their present current officers and employeesemployees and preserve their relationships with customers, suppliers and others having business dealings with them. Without limiting the generality of the foregoing, from the date hereof until the Closing and and, except as otherwise expressly contemplated by this Agreement or the other Transaction Agreements, as may result from the consummation of the Transactions, as set forth described in Section 7.01 6.1 of the Company Disclosure ScheduleLetter, or as otherwise consented to in writing by Parent (except if such consent would be inconsistent with applicable law), such consent not to be unreasonably withheld with respect to during the granting period from the date of IRUs in fiber and/or conduit by this Agreement through the Company or the SubsidiariesEffective Time, the Company shall not not, and shall cause not permit any of its Subsidiaries to, without the Subsidiaries not toprior written consent of Parent:
(a) adopt (x) declare, set aside or propose pay any change dividends on, or make any other actual, constructive or deemed distributions in respect of, any of its articles capital stock, or otherwise make any payments to stockholders of incorporationthe Company in their capacity as such, bylaws other than dividends payable to the Company declared by any of the Company's Subsidiaries, (y) 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 (z) 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 organizational documentssecurities;
(b) issue, deliver, sell, pledge pledge, dispose of or transfer or authorize or propose the issuance, delivery, sale, pledge or transfer of otherwise encumber any shares of its capital stock of stock, any class other voting securities or equity equivalent or any securities convertible into or exchangeable or exercisable for, or any rights, warrants, warrants or options or other rights to acquire, any such shares shares, voting securities or enter into any agreement with respect to convertible securities or equity equivalent (other than, in the foregoing other than (i) case of the Company, the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on during the date hereof in accordance with their present terms, (ii) as required by Contracts in effect as of period from the date of this Agreement that are listed through the Effective Time upon the exercise of Stock Options outstanding (as set forth in Section 4.05 of the Company Disclosure Schedule and (iii4.2(a)) the issuance of capital stock of the Company as a dividend in respect of Preferred Stock outstanding on the date hereof of this Agreement in accordance with their current terms) or enter into any agreement or contract with respect to the sale or issuance of any of its present termssecurities;
(ic) amend its certificate of incorporation or bylaws or amend the certificate of incorporation and by-laws (or other organizational documents) of any of its Subsidiaries;
(d) acquire (or agree to acquire by mergermerging or consolidating with, consolidation or acquisition by purchasing assets of stock or assets) equity in, or by any other manner, any business or any corporation, partnership partnership, association or other business organization or division thereof, (ii) sell, lease thereof or otherwise dispose of a Subsidiary acquire or (iii) sell, lease or otherwise dispose of an amount of agree to acquire any assets or securities, including IRUs, for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), except for transactions in the ordinary course consistent with past practice;
(d) merge or consolidate with any other Person;
(e) make any investment, whether by purchase of stock or securities, contributions to capital or any property transfer (other than investments in cash or cash equivalents with a maturity of less than 90 days or investments in wholly-owned Subsidiaries made, in each case, in the ordinary course of business consistent with past practice);
(e) sell, lease or otherwise dispose of or agree to sell, lease or otherwise dispose of, any of its assets that are material, individually or in the aggregate, to the Company and its Subsidiaries taken as a whole;
(f) incur any indebtedness for borrowed money or guarantee any such indebtedness or issue or sell any debt securities or guarantee any debt securities of others, except for (i) borrowings or guarantees incurred in the ordinary course of business consistent with past practice for working capital purposes, (ii) indebtedness of any Subsidiary of the Company to the Company or to another Subsidiary of the Company, (iii) in replacement for existing or maturing debt so long as principal amount does not increase or (iv) other borrowings under existing lines of credit or loans in the ordinary course of business consistent with past practice, or purchase for an amount in excess of $100,000 (ormake any loans, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Actadvances or capital contributions to, $1,000,000)or investments in, any property or assets of any other individual person or entity, except for inventory purchased for resale other than to the Company or any wholly owned Subsidiary of the Company and other than in the ordinary course of business consistent with past practice;
(fg) alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any Subsidiary of the Company or adopt any plan with respect to any of the foregoing;
(h) grant any severance or termination pay not currently required to be paid under existing severance plans or agreements, enter into or adopt, or amend any existing, severance plan, agreement or arrangement that limits or otherwise restricts the Company or any of the Subsidiaries or any of their respective Affiliates or successors thereto or that by its terms couldor, after the Effective Time, limit or restrict Parent or the Company or any of their respective Affiliates or any successor thereto, from engaging or competing in any line of business or in any geographic area;
(g) other than in the ordinary course of business consistent with past practiceor as required by applicable law, waiveenter into or amend any employee benefit plan (including, release or relinquish any material right;
(h) other than in without limitation, the ordinary course of business consistent with past practice, modify or change in any material respect any existing material license, lease, contractCompany Stock Plan), or other enter into or amend any employment or consulting agreement;
(i) enter into any agreements involving aggregate expenditures contract or receipts of more than $100,000 individually or $500,000 in the aggregate (or, commitment with respect to (i) any Cost capital expenditures with a value in excess of, or requiring expenditures by the Company and its Subsidiaries in excess of Services Contract$100,000, $1,000,000 individually, or enter into contracts or commitments with respect to capital expenditures with a value in excess of, or requiring expenditures by the Company and (ii) switch software upgrades for purposes its Subsidiaries in excess of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any agreements in the ordinary course of business consistent with past practice, including but not limited to installation fees and customer premise equipment, in each case, associated with new customers and in the ordinary course of business consistent with past practiceaggregate;
(j) createexcept to the extent required under existing employee and director benefit plans, incur agreements or assumearrangements as in effect on the date of this Agreement, make any bonus payments to, or execute any new guarantee of, any Indebtedness in excess increase the compensation or fringe benefits of $100,000 in the aggregate (other than indebtedness for borrowed money owing to W or any of its Affiliates) directors, officers or prepay any Indebtedness;
(k) other than pursuant to arrangements existing on employees, provided that, the date hereof, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for obligations of any other person (other than any Subsidiary) in an amount in excess of $100,000;
(l) make any loans or advances other than Company may (i) loans or advances to wholly-owned Subsidiaries made increase compensation associated with promotions and regular reviews in the ordinary course of business consistent with past practice and (ii) routine salary, travel and expense advances to Company Employees pay bonuses in the ordinary course of business consistent with past practice; provided, however, that the aggregate amount of such payments with respect to the employees of the Company's United States operations other than Xxxx Communications, Inc., shall not exceed $1,000,0000;
(ik) engage in any transaction, or enter into any contract, agreement or arrangement (other than this Agreement, the Transactions and the incurrence of indebtedness for borrowed money owing to W or any of its Affiliates and transactions pursuant to any such contract, agreement or arrangement entered into on or prior agree to the date hereof), with settlement of any Affiliate, material claim or litigation;
(iil) engage make or rescind any material tax election or settle or compromise any material tax liability;
(m) make any material change in any transaction, or enter into any contract, agreement or arrangement, with any portfolio company its method of W that is not on arm's length terms and in the ordinary course of business, or (iii) amend, waive or relinquish any rights relating to any such transaction, contract, agreement or arrangement referred to in clause (i) or (ii) that will remain outstanding after the Closing in accordance with Section 8.05accounting;
(n) authorize except as required under the Company Stock Plan and as otherwise provided in this Agreement, accelerate the payment, right to payment or vesting of any new capital expenditures whichbonus, individuallyseverance, are greater than $100,000 orprofit sharing, in the aggregateretirement, would cause total capital expenditures for year ending December 31deferred compensation, 2003 to exceed $500,000 (orstock option, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), insurance or other than any capital expenditures in the ordinary course of business consistent with past practicecompensation or benefits;
(o) split, combine or reclassify any shares of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, other than (i) cash dividends and distributions by a wholly-owned Subsidiary to the Company or to a Subsidiary all of the capital stock which is owned directly or indirectly by the Company or (ii) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms; or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its securities or any securities of the Subsidiaries;
(p) (i) increase the compensation or fringe benefits of any Company Employee (except for (x) increases in salary or wages in the ordinary course of business consistent with past practice, (y) the payment of accrued or earned but unpaid bonuses and (z) stay bonuses or similar retention payments in an amount not to exceed $10,000 with respect to any individual payment and $100,000 in the aggregate with respect to all such payments), (ii) grant any severance or termination pay to any Company Employee, (iii) loan or advance any money or other property to any Company Employee (other than routine salary, travel and expense advances to Company Employees in the ordinary course of business and consistent with past practice), (iv) establish, adopt, enter into, amend or terminate any Company Plan, collective bargaining or labor agreement 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 of this Agreement (other than as may be required by the terms of an existing Company Plan or collective bargaining agreement, or as may be required by applicable law or in order to qualify under Sections 401 and 501 of the Code), or (v) grant any equity or equity-based awards, other than in the cases of clauses (i) through (v) pursuant to commitments of the Company or any Subsidiary existing on the date hereof required by contracts set forth in Section 4.08(k) or Section 4.12 of the Company Disclosure Schedule;
(q) pay, discharge or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction (A) of any such claims, liabilities or obligations in the ordinary course of business and consistent with past practice or (B) of claims, liabilities or obligations reflected or reserved against in in, or contemplated by, the consolidated financial statements of (or the notes thereto) contained in the Company referred to in Section 4.07 or liabilities incurred in the ordinary course of businessSEC Reports;
(rp) make enter into any agreement, understanding or change commitment that restrains, limits or impedes the Company's or any tax election of its Subsidiaries' ability to compete with or settle conduct any business or compromise line of business, including, but not limited to, geographic limitations on the Company's or any income tax liabilityof its Subsidiaries' activities;
(sq) other than materially modify, amend or terminate any material contract to which it is a party or waive any of its material rights or claims except in the ordinary course of business consistent with past practice, change any method of accounting, accounting policy or accounting practice, except for any such change required by reason of a concurrent change in GAAP as concurred with by the Company's independent auditors;
(t) fail to maintain insurance coverage at presently existing levels;
(u) make any repayments of principal to W or its Affiliates in respect of any Indebtedness owed to W or its Affiliates or any payment of interest accrued in respect of such Indebtedness;
(v) agree or commit to do any of the foregoing; or
(wr) knowingly take agree, in writing or agree or commit otherwise, to take any action that would make any representation and warranty of W or the Company hereunder inaccurate in any material respect at, or as of any time prior to, the Closing, except for any representations or warranties that are made as of a specified dateforegoing actions.
Appears in 1 contract
Samples: Merger Agreement (Healthworld Corp)
Covenants Relating to Conduct of Business. Section 7.01. SECTION 4.1 Conduct of Business by the CompanySelling Parties. From During the period from the date hereof until of this Agreement to the ClosingClosing Date, the Company and Selling Parties shall carry on the Subsidiaries shall conduct their business businesses of BBA in the usual, regular and ordinary course in substantially the same manner as heretofore conducted and, to the extent consistent with past practice in compliance with therewith, use all applicable laws and shall use their reasonable best efforts to preserve intact their BBA's current business organizations and relationships with third parties and to organization, keep available the services of their present its current officers and employeesemployees and preserve its relationships with customers, suppliers, licensors, licensees, distributors and others having business dealings with it to the end that BBA's goodwill, ongoing business and the assets of BBA shall be unimpaired at the Closing Date. Without limiting the generality of the foregoing, during the period from the date hereof until of this Agreement to the Closing Date, without the prior written consent of HIG, BBA shall not, and except as expressly contemplated by this Agreement or the other Transaction Agreements, as may result from the consummation of the Transactions, as set forth in Section 7.01 of the Company Disclosure Schedule, or as otherwise consented to in writing by Parent (except if such consent would be inconsistent with applicable law), such consent not to be unreasonably withheld with respect to the granting of IRUs in fiber and/or conduit by the Company or the Subsidiaries, the Company Buell shall not and shall cause the Subsidiaries not or permit BBA to:
(a) adopt (i) declare, set aside or propose pay any change dividends on, or make any other distributions in respect of, any of its articles capital stock, (ii) split, combine or reclassify any of incorporationits capital stock or issue or authorize the issuance of any other securities in respect of, bylaws in lieu of, or in substitution for shares of its capital stock, or (iii) purchase, redeem or otherwise acquire any shares of its capital stock or any other securities thereof or any rights, warrants or options to acquire any such shares or other organizational documentssecurities;
(b) issue, deliver, sell, pledge or transfer or authorize or propose the issuance, delivery, sale, pledge or transfer of otherwise encumber any shares of its capital stock of stock, any class other voting securities or any securities convertible into or exercisable forinto, or any rights, warrants, warrants or options or other rights to acquire, any such shares shares, voting securities or enter into any agreement with respect convertible securities;
(c) amend its Articles of Incorporation and Bylaws, or other comparable charter or organizational documents;
(d) acquire or agree to the foregoing other than acquire (i) the issuance of Company Common Stock upon exercise of stock options by merging or warrantsconsolidating with, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms, (ii) as required by Contracts in effect as purchasing a substantial portion of the date of this Agreement that are listed in Section 4.05 of the Company Disclosure Schedule and (iii) the issuance of capital stock of the Company as a dividend in respect of Preferred Stock outstanding on the date hereof in accordance with its present terms;
(i) acquire (assets of, or by mergerany other manner, consolidation any business or acquisition of stock or assets) any corporation, partnership partnership, joint venture, association or other business organization or division thereof, or (ii) sellany assets that are material, lease individually or otherwise dispose of a Subsidiary or (iii) sellin the aggregate, lease or otherwise dispose of an amount of assets or securities, including IRUs, for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000)it, except for transactions in the ordinary course consistent with past practice;
(d) merge or consolidate with any purchases of inventory and other Person;
(e) make any investment, whether by purchase of stock or securities, contributions to capital or any property transfer (other than investments in cash or cash equivalents with a maturity of less than 90 days or investments in wholly-owned Subsidiaries made, in each case, assets in the ordinary course of business consistent with past practice)practice and capital expenditures permitted by clause (g) below;
(e) mortgage or otherwise encumber or subject to any Lien or sell, lease or purchase for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), any property or assets otherwise dispose of any other individual of its material properties or entityassets, except for inventory purchased for resale in the ordinary course of business consistent with past practice;
(f) enter into (i) incur any agreement additional indebtedness for borrowed money, guarantee any indebtedness of another person, issue or arrangement that limits sell any debt securities or otherwise restricts the Company warrants or other rights to acquire any debt securities of the Subsidiaries it, or guarantee any debt securities of their respective Affiliates another person, or successors thereto (ii) make any loans, advances or that by its terms couldcapital contributions to, after the Effective Timeor investments in, limit or restrict Parent or the Company or any of their respective Affiliates or any successor thereto, from engaging or competing in any line of business or in any geographic areaother person;
(g) other than except for the capital expenditures set forth in Schedule 4.1(g) hereto, make or agree to make any new capital expenditures which in the ordinary course aggregate are in excess of business consistent with past practice, waive, release or relinquish any material right$10,000.00;
(h) other than in the ordinary course of business consistent with past practice, modify settle or compromise any Tax liability or make any Tax election or change in any material respect any existing material licensemethod, lease, contract, practice or other agreementprinciple regarding Taxes;
(i) enter into any agreements involving aggregate expenditures or receipts of more than $100,000 individually or $500,000 in the aggregate (or, with respect to (i) any Cost of Services Contract, $1,000,000 and (ii) switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any agreements in the ordinary course of business consistent with past practice, including but not limited to installation fees and customer premise equipment, in each case, associated with new customers and in the ordinary course of business consistent with past practice;
(j) create, incur or assume, or execute any new guarantee of, any Indebtedness in excess of $100,000 in the aggregate (other than indebtedness for borrowed money owing to W or any of its Affiliates) or prepay any Indebtedness;
(k) other than pursuant to arrangements existing on the date hereof, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for obligations of any other person (other than any Subsidiary) in an amount in excess of $100,000;
(l) make any loans or advances other than (i) loans or advances to wholly-owned Subsidiaries made in the ordinary course of business consistent with past practice and (ii) routine salary, travel and expense advances to Company Employees in the ordinary course of business consistent with past practice;
(i) engage in any transaction, or enter into any contract, agreement or arrangement (other than this Agreement, the Transactions and the incurrence of indebtedness for borrowed money owing to W or any of its Affiliates and transactions pursuant to any such contract, agreement or arrangement entered into on or prior to the date hereof), with any Affiliate, (ii) engage in any transaction, or enter into any contract, agreement or arrangement, with any portfolio company of W that is not on arm's length terms and in the ordinary course of business, or (iii) amend, waive or relinquish any rights relating to any such transaction, contract, agreement or arrangement referred to in clause (i) or (ii) that will remain outstanding after the Closing in accordance with Section 8.05;
(n) authorize any new capital expenditures which, individually, are greater than $100,000 or, in the aggregate, would cause total capital expenditures for year ending December 31, 2003 to exceed $500,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any capital expenditures in the ordinary course of business consistent with past practice;
(o) split, combine or reclassify any shares of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, other than (i) cash dividends and distributions by a wholly-owned Subsidiary to the Company or to a Subsidiary all of the capital stock which is owned directly or indirectly by the Company or (ii) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms; or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its securities or any securities of the Subsidiaries;
(p) (i) increase the compensation or fringe benefits of any Company Employee (except for (x) increases in salary or wages in the ordinary course of business consistent with past practice, (y) the payment of accrued or earned but unpaid bonuses and (z) stay bonuses or similar retention payments in an amount not to exceed $10,000 with respect to any individual payment and $100,000 in the aggregate with respect to all such payments), (ii) grant any severance or termination pay to any Company Employee, (iii) loan or advance any money or other property to any Company Employee (other than routine salary, travel and expense advances to Company Employees in the ordinary course of business and consistent with past practice), (iv) establish, adopt, enter into, amend or terminate any Company Plan, collective bargaining or labor agreement 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 of this Agreement (other than as may be required by the terms of an existing Company Plan or collective bargaining agreement, or as may be required by applicable law or in order to qualify under Sections 401 and 501 of the Code), or (v) grant any equity or equity-based awards, other than in the cases of clauses (i) through (v) pursuant to commitments of the Company or any Subsidiary existing on the date hereof required by contracts set forth in Section 4.08(k) or Section 4.12 of the Company Disclosure Schedule;
(q) pay, discharge or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction satisfaction, in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reflected or reserved against in in, or contemplated by, the consolidated financial statements of the Company referred to in Section 4.07 Current Financial Statements or liabilities incurred in the ordinary course of business;
(r) make or change any tax election or settle or compromise any income tax liability;
(s) other than in the ordinary course of business consistent with past practice, change or waive the benefits of, or agree to modify in any method of accountingmanner, accounting policy any confidentiality, standstill or accounting practice, except for any such change required by reason of a concurrent change in GAAP as concurred with by the Company's independent auditorssimilar agreement;
(tj) fail to maintain insurance coverage at presently existing levels;
enter into any employment, bonus or severance agreements (u) make any repayments of principal to W or its Affiliates in respect of any Indebtedness owed to W or its Affiliates or any payment of interest accrued in respect of such Indebtedness;
(v) agree or commit to do amend any of the foregoing) with any of its present employees or officers;
(k) amend, modify, terminate or breach any Material Agreement or enter into any agreement that would constitute a Material Agreement hereunder; or
(wl) knowingly take authorize any of, or commit or agree or commit to take any action that would make any representation and warranty of W or the Company hereunder inaccurate in any material respect at, or as of any time prior toof, the Closing, except for any representations or warranties that are made as of a specified dateforegoing actions.
SECTION 4.2 Section 338(h)(10)
Appears in 1 contract
Samples: Stock Purchase Agreement (Home Interiors & Gifts Inc)
Covenants Relating to Conduct of Business. Section 7.01. 5.1 Conduct of Business by the CompanyCompany Pending the Merger. From ----------------------------------------------------- Except as expressly permitted by clauses (i) through (xvii) of this Section 5.1, during the period from the date hereof until of this Agreement through the ClosingEffective Time, the Company shall, and the shall cause each of its Subsidiaries shall conduct their to, in all material respects carry on its business in the ordinary course of its business as currently conducted and, to the extent consistent with past practice in compliance with all applicable laws and shall therewith, use their reasonable best efforts to preserve intact their its current business organizations and relationships with third parties and to organizations, keep available the services of their present its current officers and employeesemployees and preserve its relationships with customers, suppliers and others having business dealings with it. Without limiting the generality of the foregoing, from the date hereof until the Closing and except as otherwise expressly contemplated by this Agreement or the other Transaction Agreements, as may result from the consummation of the Transactions, as set forth in Section 7.01 of the Company Disclosure Schedule, or as otherwise consented to in writing by Parent Letter (except if such consent would be inconsistent with applicable law), such consent not to be unreasonably withheld with respect specific reference to the granting of IRUs in fiber and/or conduit by the Company or the Subsidiariesapplicable subsection below), the Company shall not not, and shall cause not permit any of its Subsidiaries to, without the Subsidiaries prior written consent of Parent (provided that with respect to clauses (v), (vi), (viii), (ix), (xiii), (xiv) and (xv) below, such consent shall not to:be unreasonably withheld or delayed):
(aA) adopt other than dividends paid by wholly-owned Subsidiaries, declare, set aside or propose pay any change dividends on, or make any other actual, constructive or deemed distributions in respect of, any of its articles capital stock, or otherwise make any payments to its shareholders in their capacity as such, (B) other than in the case of incorporationany Subsidiary, bylaws split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or (C) purchase, redeem or otherwise acquire any shares of capital stock of the Company or any other securities thereof or any rights, warrants or options to acquire any such shares or other organizational documentssecurities;
(bii) issue, deliver, sell, pledge pledge, dispose of or transfer or authorize or propose the issuance, delivery, sale, pledge or transfer of otherwise encumber any shares of its capital stock of stock, any class other voting securities or equity equivalent or any securities convertible into or exercisable forinto, or any rights, warrants, warrants or options or other rights (including options under the Company Stock Option Plans) to acquire, acquire any such shares shares, voting securities, equity equivalent or enter into any agreement with respect to the foregoing convertible securities, other than (iA) the issuance of shares of Company Common Stock upon the exercise of Company Stock Options outstanding on the date of this Agreement in accordance with their current terms, (B) the issuance of shares of Company Common Stock contemplated by Section 1.2(d), (C) the issuance of shares of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present termsXxxxxxxx Warrant, (ii) as required by Contracts in effect as of the date of this Agreement that are listed in Section 4.05 of the Company Disclosure Schedule and (iiiD) the issuance of capital stock shares of Company Common Stock pursuant to the Stock Option Agreement and (E) as set forth in Section 5.1(ii) of the Company as a dividend in respect of Preferred Stock outstanding on the date hereof in accordance with its present termsLetter;
(iiii) amend its charter or by-laws;
(iv) acquire (or agree to acquire by mergermerging or consolidating with, consolidation or acquisition by purchasing a substantial portion of stock the assets of or assets) equity in, or by any other manner, any business or any corporation, partnership limited liability company, partnership, association or other business organization or division thereof, ;
(iiv) sell, lease or otherwise dispose of a Subsidiary of, or (iii) agree to sell, lease or otherwise dispose of an amount of assets or securities, including IRUs, for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), except for transactions in the ordinary course consistent with past practice;
(d) merge or consolidate with any other Person;
(e) make any investment, whether by purchase of stock or securities, contributions to capital or any property transfer (other than investments in cash or cash equivalents with a maturity of less than 90 days or investments in wholly-owned Subsidiaries made, in each case, in the ordinary course of business consistent with past practice), or purchase for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000)of, any property or assets of any other individual or entity, except for inventory purchased for resale in the ordinary course of business consistent with past practice;
(f) enter into any agreement or arrangement that limits or otherwise restricts the Company or any of the Subsidiaries or any of their respective Affiliates or successors thereto or that by its terms could, after the Effective Time, limit or restrict Parent or the Company or any of their respective Affiliates or any successor thereto, from engaging or competing in any line of business or in any geographic area;
(g) other than in the ordinary course of business consistent with past practice, waive, release or relinquish any material right;
(h) other than in the ordinary course of business consistent with past practice, modify or change in any material respect any existing material license, lease, contract, or other agreement;
(i) enter into any agreements involving aggregate expenditures or receipts of more than $100,000 individually or $500,000 in the aggregate (or, with respect to (i) any Cost of Services Contract, $1,000,000 and (ii) switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000)assets, other than any agreements in the ordinary course sales of business consistent with past practice, including but not limited to installation fees and customer premise equipment, in each case, associated with new customers and in the ordinary course of business consistent with past practice;
(j) create, incur or assume, or execute any new guarantee of, any Indebtedness in excess of $100,000 in the aggregate (other than indebtedness for borrowed money owing to W or any of its Affiliates) or prepay any Indebtedness;
(k) other than pursuant to arrangements existing on the date hereof, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for obligations of any other person (other than any Subsidiary) in an amount in excess of $100,000;
(l) make any loans or advances other than (i) loans or advances to wholly-owned Subsidiaries made inventory that are in the ordinary course of business consistent with past practice and sales of assets having an aggregate fair market value of up to $100,000;
(iivi) routine salaryincur any indebtedness for borrowed money, travel and expense guarantee any such indebtedness or make any loans, advances to Company Employees or capital contributions to, or other investments in, any other person, other than (A) in the ordinary course of business consistent with past practice;
(i) engage in any transaction, or enter into any contract, agreement or arrangement (other than this Agreement, the Transactions and the incurrence of indebtedness for borrowed money owing to W or any of its Affiliates and transactions pursuant to any such contract, agreement or arrangement entered into on or prior to the date hereof), with any Affiliate, (ii) engage in any transaction, or enter into any contract, agreement or arrangement, with any portfolio company of W that is not on arm's length terms and in the ordinary course of business, or (iii) amend, waive or relinquish any rights relating to any such transaction, contract, agreement or arrangement referred to in clause (i) or (ii) that will remain outstanding after the Closing in accordance with Section 8.05;
(n) authorize any new capital expenditures which, individually, are greater than $100,000 orpractices and, in the aggregatecase of indebtedness and guarantees, would cause total capital expenditures for year ending December 31, 2003 in an amount not to exceed $500,000 and (orB) indebtedness, with respect to switch software upgrades for purposes loans, advances, capital contributions and investments between the Company and any of compliance with the Communication Assistance for Law Enforcement Actits Subsidiaries or between any of such Subsidiaries, $1,000,000), other than any capital expenditures in each case in the ordinary course of business consistent with past practicepractices;
(ovii) splitalter (through merger, combine liquidation, reorganization, restructuring or reclassify in any shares other fashion) the corporate structure or ownership of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, other than (i) cash dividends and distributions by a wholly-owned Subsidiary to the Company or to a Subsidiary all of the capital stock which is owned directly or indirectly by the Company or (ii) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms; or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its securities or any securities of the SubsidiariesSubsidiary;
(pviii) except as provided in Section 5.1(viii) of the Company Letter and Section 6.5 hereof, enter into or adopt any, or amend any existing, severance plan, agreement or arrangement or enter into or amend any Company Plan or employment or consulting agreement;
(iix) except as provided in Section 5.1(ix) of the Company Letter and Section 6.5 hereof, increase the compensation payable or fringe benefits of any Company Employee to become payable to its directors, officers or employees (except for (x) increases in salary or wages in the ordinary course of business consistent with past practice, (ypractice in salaries or wages of employees of the Company or any of its Subsidiaries who are not officers of the Company or any of its Subsidiaries) the payment of accrued or earned but unpaid bonuses and (z) stay bonuses or similar retention payments in an amount not to exceed $10,000 with respect to any individual payment and $100,000 in the aggregate with respect to all such payments), (ii) grant any severance or termination pay to to, or enter into any employment or severance agreement with, any director or officer of the Company Employeeor any of its Subsidiaries, (iii) loan or advance any money or other property to any Company Employee (other than routine salary, travel and expense advances to Company Employees in the ordinary course of business and consistent with past practice), (iv) establish, adopt, enter into, or, except as may be required to comply with applicable law, amend in any material respect or terminate take action to enhance in any Company Planmaterial respect or accelerate any rights or benefits under, any labor, collective bargaining bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or labor agreement or any other plan, agreement, program, policy, trust, fund fund, policy or other arrangement that would be a Company Plan if for the benefit of any director, officer or employee;
(x) knowingly violate or knowingly fail to perform any obligation or duty imposed upon it were in existence as of the date of this Agreement or any Subsidiary by any applicable material federal, state or local law, rule, regulation, guideline or ordinance;
(xi) make any change to accounting policies or procedures (other than as may actions required to be required taken by the terms of an existing Company Plan generally accepted accounting principles);
(xii) prepare or collective bargaining agreementfile any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or as may be required by applicable law adopt any method that is inconsistent with positions taken, elections made or methods used in order to qualify under Sections 401 and 501 preparing or filing similar Tax Returns in prior periods;
(xiii) settle or compromise any federal, state, local or foreign income tax dispute in excess of the Code), $100,000 or make any tax election;
(vxiv) grant settle or compromise any equity claims or equity-based awards, other than litigation in the cases excess of clauses $100,000 or commence any litigation or proceedings;
(xv) enter into or amend any agreement or contract (i) through having a remaining term in excess of 12 months or (vii) pursuant which involves or is expected to commitments involve future payments of $500,000 or more during the Company term thereof; or purchase any Subsidiary existing on real property, or make or agree to make any new capital expenditure or expenditures (other than the date hereof required by contracts set forth purchase of real property) which in Section 4.08(k) or Section 4.12 the aggregate are in excess of the Company Disclosure Schedule$500,000;
(qxvi) pay, discharge or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business of any such claims, liabilities reflected or reserved against in the consolidated financial statements of the Company referred to in Section 4.07 or liabilities incurred in the ordinary course of business;
(r) make or change any tax election or settle or compromise any income tax liability;
(s) other than obligations, in the ordinary course of business consistent with past practice, change any method of accounting, accounting policy practice or accounting practice, except for any such change required by reason of a concurrent change in GAAP as concurred accordance with by the Company's independent auditors;their terms; or
(txvii) fail to maintain insurance coverage at presently existing levels;
(u) make any repayments of principal to W authorize, recommend, propose or its Affiliates in respect of any Indebtedness owed to W or its Affiliates or any payment of interest accrued in respect of such Indebtedness;
(v) agree or commit announce an intention to do any of the foregoing; or
(w) knowingly take or agree or commit to take any action that would make any representation and warranty of W or the Company hereunder inaccurate in any material respect at, or as enter into any contract, agreement, commitment or arrangement to do any of any time prior to, the Closing, except for any representations or warranties that are made as of a specified dateforegoing.
Appears in 1 contract
Covenants Relating to Conduct of Business. Section 7.01. 4.1 Conduct of Business by the CompanyCompany Pending the Merger. From Except as expressly permitted herein or as set forth in Section 4.1 of the date hereof until Company Letter, from the ClosingExecution Date through the Effective Time, the Company shall, and cause its Subsidiaries to, carry on the Subsidiaries shall conduct their business Business in the ordinary course of its business as currently conducted and, to the extent consistent with past practice in compliance with all applicable laws and shall therewith, use their reasonable best efforts to preserve intact their its current business organizations and relationships with third parties and to organizations, keep available the services of their present its current officers and employeesemployees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time. Without limiting the generality of the foregoing, from the date hereof until the Closing and except as otherwise expressly contemplated by this Agreement or the other Transaction Agreements, as may result from the consummation of the Transactions, as set forth in Section 7.01 4.1 of the Company Disclosure Schedule, or as otherwise consented to in writing by Parent Letter (except if such consent would be inconsistent with applicable law), such consent not to be unreasonably withheld with respect specific reference to the granting of IRUs in fiber and/or conduit by the Company or the Subsidiariesapplicable subsection below), the Company shall not and not, nor shall cause it permit any of its Subsidiaries to, without the Subsidiaries not toprior written consent of Parent:
(a) adopt (i) declare, set aside or propose pay any change dividends on, or make any other actual, constructive or deemed distributions in respect of, any of its articles capital stock, or otherwise make any payments to its stockholders in their capacity as such, (ii) split, combine or reclassify any of incorporationits capital stock or issue or authorize the issuance of any other securities in respect of, bylaws 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 other securities thereof or any rights, warrants or options to acquire any such shares or other organizational documentssecurities;
(b) issue, deliver, sell, pledge pledge, dispose of or transfer or authorize or propose the issuance, delivery, sale, pledge or transfer of otherwise encumber any shares of its capital stock of stock, any class other voting securities or equity equivalent or any securities convertible into for or exercisable forexchangeable into, or any rights, warrants, warrants or options or other rights to acquire, acquire any such shares shares, voting securities, equity equivalent or enter into any agreement with respect to the foregoing convertible securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of stock options or warrants, or conversion of Preferred Stock, Company Stock Options outstanding on the date hereof in accordance with their present terms, (ii) as required by Contracts in effect as of the date of this Agreement that are listed in Section 4.05 of the Company Disclosure Schedule and (iii) the issuance of capital stock of the Company as a dividend in respect of Preferred Stock outstanding on the date hereof in accordance with its present termstheir terms as of the date hereof;
(ic) create any subsidiary or amend the Company Charter or Company Bylaws or amend or terminate any Employment Agreement;
(d) acquire (or agree to acquire by mergermerging or consolidating with, consolidation or acquisition by purchasing a substantial portion of stock the assets of or assets) equity in, or by any other manner, any business or any corporation, partnership limited liability company, partnership, association or other business organization or division thereof, (ii) sell, lease thereof or otherwise dispose of a Subsidiary acquire or (iii) sell, lease or otherwise dispose of an amount of agree to acquire any assets or securities, including IRUs, for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), except for transactions in the ordinary course consistent with past practice;
(d) merge or consolidate with any other Person;
(e) make any investment, whether by purchase of stock or securities, contributions to capital or any property transfer (other than investments in cash or cash equivalents with a maturity of less than 90 days or investments in wholly-owned Subsidiaries made, in each case, in the ordinary course of business consistent with past practice);
(e) sell, lease or otherwise dispose of, or purchase for an amount in excess of $100,000 (oragree to sell, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000)lease or otherwise dispose of, any property or assets of any its assets, other individual or entity, except for than sales of inventory purchased for resale that are in the ordinary course of business consistent with past practice;
(f) enter into (i) incur any agreement indebtedness for borrowed money or arrangement that limits make any loans, advances or otherwise restricts the Company capital contributions to, or other investments in, any of the Subsidiaries or any of their respective Affiliates or successors thereto or that by its terms couldother Person, after the Effective Time, limit or restrict Parent or the Company or any of their respective Affiliates or any successor thereto, from engaging or competing in any line of business or in any geographic area;
(g) other than in the ordinary course of business consistent with past practicepractices or (ii) post any bond or enter into any letter of credit or other similar arrangement;
(g) provide any guarantee, waive, release including any performance guarantee or relinquish any material rightguarantee of indebtedness for borrowed money;
(h) alter (through merger, liquidation, reorganization, restructuring or in any other than fashion) the corporate structure or ownership of the Company;
(i) enter into or adopt any, amend or terminate any existing, severance plan, agreement or arrangement or enter into or amend any Company Plan or employment, retention or consulting agreement or other similar agreement or arrangement;
(j) increase the compensation payable or to become payable to its directors, officers or employees (except for increases in the ordinary course of business consistent with past practicepractice in salaries or wages of employees of the Company who are not officers of the Company) or grant any severance or termination pay to, modify any director or change officer of the Company, or establish, adopt, enter into, or, except as may be required to comply with applicable law, amend in any material respect or take action to enhance in any existing material licenserespect or accelerate any rights or benefits under, leaseany labor, contractcollective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance, retention or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee;
(ik) enter into knowingly violate or knowingly fail to perform any agreements involving aggregate expenditures obligation or receipts of more duty imposed upon it by any applicable federal, state, local or foreign law, rule, regulation, guideline or ordinance, or under any order, settlement agreement or judgment;
(l) make any change to accounting policies or procedures (other than $100,000 individually actions required to be taken by generally accepted accounting principles);
(m) prepare or $500,000 in the aggregate (file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods (it being understood and agreed that Parent shall be permitted to review and comment upon any Tax Return for a period of at least ten business days prior to its filing);
(n) make or rescind any express or deemed tax election related to Taxes or change any of its methods of reporting income or deductions for Tax purposes;
(o) commence any litigation or proceeding with respect to any material Tax liability or settle or compromise any material Tax liability or commence any other litigation or proceedings or settle or compromise any other material claims or litigation;
(ip) enter into, amend or terminate any Cost of Services Contractagreement or contract with any customer, $1,000,000 and (ii) switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Actsupplier, $1,000,000)sales representative, agent or distributor other than any agreements in the ordinary course of business consistent with past practice, including but not limited business; or purchase any real property; or make or agree to installation fees and customer premise equipment, in each case, associated with make any new customers and capital expenditure or expenditures except in the ordinary course of business consistent with past practice;
(jq) create, incur or assume, or execute any new guarantee of, any Indebtedness in excess of $100,000 in the aggregate (other than indebtedness for borrowed money owing to W or any of its Affiliates) or prepay any Indebtedness;
(k) other than pursuant to arrangements existing on the date hereof, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for obligations of any other person (other than any Subsidiary) in an amount in excess of $100,000;
(l) make any loans or advances other than (i) loans or advances to wholly-owned Subsidiaries made in the ordinary course of business consistent with past practice and (ii) routine salary, travel and expense advances to Company Employees in the ordinary course of business consistent with past practice;
(i) engage in any transaction, or enter into any contract, agreement or arrangement (other than this Agreement, the Transactions and the incurrence of indebtedness for borrowed money owing to W or any of its Affiliates and transactions pursuant to any such contract, agreement or arrangement entered into on or prior to the date hereof), with any Affiliate, (ii) engage in any transaction, or enter into any contract, agreement or arrangement, with any portfolio company of W that is not on arm's length terms and in the ordinary course of business, or (iii) amend, waive or relinquish any rights relating to any such transaction, contract, agreement or arrangement referred to in clause (i) or (ii) that will remain outstanding after the Closing in accordance with Section 8.05;
(n) authorize any new capital expenditures which, individually, are greater than $100,000 or, in the aggregate, would cause total capital expenditures for year ending December 31, 2003 to exceed $500,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any capital expenditures in the ordinary course of business consistent with past practice;
(o) split, combine or reclassify any shares of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, other than (i) cash dividends and distributions by a wholly-owned Subsidiary to the Company or to a Subsidiary all of the capital stock which is owned directly or indirectly by the Company or (ii) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms; or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its securities or any securities of the Subsidiaries;
(p) (i) increase the compensation or fringe benefits of any Company Employee (except for (x) increases in salary or wages in the ordinary course of business consistent with past practice, (y) the payment of accrued enter into or earned but unpaid bonuses and (z) stay bonuses or similar retention payments in an amount not to exceed $10,000 with respect to amend any individual payment and $100,000 in the aggregate with respect to all such payments), (ii) grant any severance or termination pay to any Company Employee, (iii) loan or advance any money or other property to any Company Employee (other than routine salary, travel and expense advances to Company Employees in the ordinary course of business and consistent with past practice), (iv) establish, adopt, enter into, amend or terminate any Company Plan, collective bargaining or labor agreement or contract with 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 of this Agreement (other than as may be required by the terms of an existing Company Plan or collective bargaining agreement, or as may be required by applicable law or in order to qualify under Sections 401 and 501 of the Code), or (v) grant any equity or equity-based awards, other than in the cases of clauses (i) through (v) Person pursuant to commitments of which the Company is the licensor or licensee of any Subsidiary existing on the date hereof required by contracts set forth in Section 4.08(k) or Section 4.12 of the Company Disclosure ScheduleIntellectual Property;
(qr) pay, discharge or satisfy any claims, liabilities or obligations (whether or not absolute, accrued, asserted or unassertedasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business of liabilities reflected or reserved against in the consolidated financial statements of the Company referred to in Section 4.07 or liabilities incurred in the ordinary course of business;
(r) make or change any tax election or settle or compromise any income tax liability;
(s) other than satisfaction, in the ordinary course of business consistent with past practicepractice or in accordance with their terms, change any method of accountingliabilities adequately reflected or reserved against in, accounting policy the most recent financial statements (or accounting practice, except for any such change required by reason the notes thereto) of the Company or incurred in the ordinary course of business consistent with past practice that would not otherwise have a concurrent change in GAAP as concurred with by Material Adverse Effect on the Company's independent auditors;; or
(ts) fail to maintain insurance coverage at presently existing levels;
(u) make any repayments of principal to W authorize, recommend, propose or its Affiliates in respect of any Indebtedness owed to W or its Affiliates or any payment of interest accrued in respect of such Indebtedness;
(v) agree or commit announce an intention to do any of the foregoing; or
(w) knowingly take or agree or commit to take any action that would make any representation and warranty of W or the Company hereunder inaccurate in any material respect at, or as enter into any contract, agreement, commitment or arrangement to do any of any time prior to, the Closing, except for any representations or warranties that are made as of a specified dateforegoing.
Appears in 1 contract
Covenants Relating to Conduct of Business. Except as set forth in Section 7.01. Conduct 5.01 of the Company. From Seller Letter, as otherwise expressly contemplated or permitted by the terms of this Agreement or with the prior written consent of the Purchaser (which consent shall not be unreasonably withheld or delayed), from the date hereof until of this Agreement through (and including) the ClosingClosing Date, the Company Seller shall, and shall cause its subsidiaries to, conduct the Subsidiaries shall conduct their business Business in the ordinary course consistent with past practice in compliance with all applicable laws substantially the same manner as previously conducted and shall use their its commercially reasonable best efforts to preserve keep intact their business organizations and relationships with third parties and to the Business, keep available the services of their present officers the Business’s current officers, employees, contractors and employeesconsultants, preserve the Business’s assets and properties and preserve the Business’s relationships with customers, suppliers, licensors, licensees, distributors and others with whom they deal. Without In addition (and without limiting the generality of the foregoing), from the date hereof until the Closing and except as expressly contemplated by this Agreement or the other Transaction Agreements, as may result from the consummation of the Transactions, as set forth in Section 7.01 5.01 of the Company Disclosure Schedule, Seller Letter or as otherwise consented to in writing by Parent (except if such consent would be inconsistent with applicable law), such consent not to be unreasonably withheld with respect to the granting of IRUs in fiber and/or conduit expressly contemplated or permitted by the Company or terms of this Agreement, from the Subsidiariesdate of this Agreement through (and including) the Closing Date, the Company Seller shall not permit, and shall cause its subsidiaries not to permit, the Subsidiaries not toBusiness to do any of the following without the prior written consent of the Purchaser:
(a) adopt or propose amend the organizational documents of any change in its articles of incorporation, bylaws or other organizational documentsTransferred Entity;
(b) issuedeclare, deliver, sell, pledge set aside or transfer pay any dividend or authorize or propose the issuance, delivery, sale, pledge or transfer of make any shares of its capital stock of any class or any securities convertible into or exercisable for, or any rights, warrants, options or other rights to acquire, any such shares or enter into any agreement with respect distribution to the foregoing holders of equity interests in any Transferred Entity, other than (i) dividends or other distributions paid or payable to another Transferred Entity and (ii) dividends or other distributions made to withdraw cash and cash equivalents of the issuance of Company Common Stock upon exercise of stock options Transferred Entities;
(c) redeem or warrantsotherwise acquire any equity interests in, or conversion of Preferred Stockany other securities of, outstanding on the date hereof in accordance with their present termsa Transferred Entity or issue (i) any equity interests in, or any other security of, a Transferred Entity, (ii) as required by Contracts in effect as of the date of this Agreement that are listed in Section 4.05 of the Company Disclosure Schedule and any option or warrant for, or any security convertible into, or exercisable or exchangeable for, any equity interests in, or any other security of, a Transferred Entity, (iii) “phantom” stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings to which any Transferred Entity is a party or by which any of them is bound (A) obligating any Transferred Entity to issue, deliver or sell, or cause to be issued, delivered or sold, additional units of its equity interests or any security convertible into, or exercisable or exchangeable for, any equity interest in any Transferred Entity or any Transferred Entity Voting Debt, (B) obligating any Transferred Entity to issue, grant, extend or enter into any such option, warrant, security, right, unit, commitment, Contract, arrangement or undertaking or (C) that give any person the issuance of capital stock right to receive any economic benefit or right similar to or derived from the economic benefits and rights accruing to holders of the Company as a dividend in respect of Preferred Stock outstanding on the date hereof in accordance with its present terms;
Transferred Equity Interests or (i) acquire (by merger, consolidation or acquisition of stock or assetsiv) any corporationbond, partnership debenture, note or other business organization indebtedness having the right to vote (or division thereofconvertible into, (iior exercisable or exchangeable for, securities having the right to vote) sell, lease or otherwise dispose on any matters on which the holders of a Subsidiary or (iii) sell, lease or otherwise dispose of an amount of assets or securities, including IRUs, for an amount equity interests in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), except for transactions in the ordinary course consistent with past practiceTransferred Entity may vote;
(d) merge split, combine or consolidate with reclassify any of the equity interests in any Transferred Entity, or issue any other Personsecurity in respect of, in lieu of or in substitution for the equity interests in any Transferred Entity;
(e) loan, advance, invest or make a capital contribution to or in any investmentperson, whether by purchase of stock or securities, contributions to capital or any property transfer (other than investments in cash or cash equivalents with a maturity of less than 90 days or investments in wholly-owned Subsidiaries made, in each case, (i) advances in the ordinary course of business consistent with past practice)or (ii) loans, advances, investments or purchase for an amount capital contributions to or in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), any property or assets of any other individual or entity, except for inventory purchased for resale in the ordinary course of business consistent with past practicea Transferred Equity;
(f) enter into any agreement or arrangement that limits or otherwise restricts the Company or any of the Subsidiaries or any of their respective Affiliates or successors thereto or that by its terms could, after the Effective Time, limit or restrict Parent or the Company or any of their respective Affiliates or any successor thereto, from engaging or competing in any line of business or in any geographic area;
(g) other than in the ordinary course of business consistent with past practice, waive, release or relinquish any material right;
(h) other than in the ordinary course of business consistent with past practice, modify or change in any material respect any existing material license, lease, contract, or other agreement;
(i) enter into incur any agreements involving aggregate expenditures indebtedness or receipts of more than $100,000 individually or $500,000 in the aggregate (or, with respect to (i) any Cost of Services Contract, $1,000,000 and (ii) switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any agreements in the ordinary course of business consistent with past practice, including but not limited to installation fees and customer premise equipment, in each case, associated with new customers and in the ordinary course of business consistent with past practice;
(j) create, incur or assume, or execute any new guarantee of, any Indebtedness in excess of $100,000 in the aggregate (other than indebtedness for borrowed money owing to W or any of its Affiliates) or prepay any Indebtedness;
(k) other than pursuant to arrangements existing on the date hereof, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for obligations the indebtedness of any other person (person, other than in the ordinary course of business or (ii) mortgage, pledge or create a security interest in any Subsidiary) in an amount in excess material assets of $100,000the Business, tangible or intangible;
(lg) make repay any loans indebtedness or advances guarantees of any such indebtedness, other than (i) loans or advances to wholly-owned Subsidiaries made in the ordinary course of business consistent with past practice and or (ii) routine salaryas contemplated by Section 5.12;
(h) cancel any material indebtedness other than as contemplated by Section 5.12;
(i) sell, travel transfer or lease any of its assets to, or enter into any agreement or arrangement with, the Seller or any of its affiliates, except for (A) transactions among the Business and expense advances to Company Employees (B) intercompany sales and purchases of goods and services (and payments for such sales and purchases) in the ordinary course of business consistent with past practice;
(ij) engage in any transactionacquire by merging or consolidating with, or enter into by purchasing a substantial portion of the assets of, or by purchasing all of or substantial equity interests in, any contractother person or its business or acquire any material assets, agreement or arrangement (other than this Agreement, the Transactions and the incurrence of indebtedness for borrowed money owing to W or any of its Affiliates and transactions pursuant to any such contract, agreement or arrangement entered into on or prior to the date hereof), with any Affiliate, (iiA) engage in any transaction, or enter into any contract, agreement or arrangement, with any portfolio company of W that is not on arm's length terms and assets acquired in the ordinary course of business, business consistent with past practice or (iiiB) amendassets acquired in compliance with clause (k) of this Section 5.01;
(k) incur any capital expenditure, waive or relinquish any rights relating to any such transaction, contract, agreement or arrangement referred to in clause other than (i) or as contemplated by the Cap Ex Budget and (ii) capital expenditures made to repair, replace or rebuild assets of the Business that will remain outstanding are damaged or destroyed after the Closing in accordance with Section 8.05date of this Agreement;
(nl) authorize sell, lease, license or otherwise dispose of any new capital expenditures which, individually, are greater than $100,000 or, in the aggregate, would cause total capital expenditures for year ending December 31, 2003 to exceed $500,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000)its assets or properties, other than any capital expenditures assets sold, leased, licensed or otherwise disposed of in the ordinary course of business consistent with past practice;
(o) split, combine or reclassify any shares of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, other than (i) cash dividends and distributions by a wholly-owned Subsidiary to the Company or to a Subsidiary all of the capital stock which is owned directly or indirectly by the Company or (ii) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms; or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its securities or any securities of the Subsidiaries;
(p) (i) increase the compensation or fringe benefits of any Company Employee (except for (x) increases in salary or wages in the ordinary course of business consistent with past practice, (y) the payment of accrued or earned but unpaid bonuses and (z) stay bonuses or similar retention payments in an amount not to exceed $10,000 with respect to any individual payment and $100,000 in the aggregate with respect to all such payments), (ii) grant any severance or termination pay to any Company Employee, (iii) loan or advance any money or other property to any Company Employee (other than routine salary, travel and expense advances to Company Employees in the ordinary course of business and consistent with past practice), (iv) establish, adopt, enter into, amend or terminate any Company Plan, collective bargaining or labor agreement 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 of this Agreement (other than as may be required by the terms of an existing Company Plan or collective bargaining agreement, or as may be required by applicable law or in order to qualify under Sections 401 and 501 of the Code), or (v) grant any equity or equity-based awards, other than in the cases of clauses (i) through (v) pursuant to commitments of the Company or any Subsidiary existing on the date hereof required by contracts set forth in Section 4.08(k) or Section 4.12 of the Company Disclosure Schedule;
(qm) pay, discharge discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge discharge, settlement or satisfaction (i) of liabilities or obligations as required by the terms of any applicable Judgment or Law, (ii) of liabilities or obligations constituting indebtedness, (iii) of liabilities or obligations reflected or reserved against on the Balance Sheet or incurred since the date of the Balance Sheet in the ordinary course of business or (iv) of liabilities reflected or reserved against obligations that, in the consolidated financial statements aggregate, do not exceed $500,000;
(n) waive, discharge, settle, release, grant or transfer any claim, right, action or suit of material value;
(o) commence any litigation, other than (i) litigation in connection with the collection of accounts receivable, (ii) litigation to enforce the terms of this Agreement or (iii) litigation as a result of suits, actions or other proceedings commenced against the Business;
(p) enter into or renew (i) any Contract that has a term of more than one year and that is not terminable on not more than 60 days prior notice without the payment of any penalty, (ii) any Contract with a value (net of metal costs) in excess of $3,500,000, (iii) any Contract with respect to any joint venture, partnership or similar arrangement, (iv) any commodity agreement, interest rate agreement or currency agreement, other than commodity agreements entered into to hedge fluctuations in the price of raw materials purchased or to be purchased to fill accepted customer orders or (v) any Contract that, following the Closing, (A) materially restricts the ability of the Company referred Business to compete in Section 4.07 any business or liabilities incurred with any person in any geographic area, (B) provides for exclusivity or any similar requirement, (C) requires the Business to grant “most favored nation” pricing or terms or (D) restricts the ability of the Business to solicit or hire any person;
(q) enter into, amend in any material respect, terminate or renew any lease of real property;
(r) amend, supplement, otherwise modify or terminate any Lease (other than a lease of real property), other than amendments, supplements or other modifications in the ordinary course of business;
(rs) (A) enter into, adopt, amend in any material respect or terminate any Assumed Benefit Plan, Assumed Benefit Agreement or any CBA, (B) grant any material increase in the compensation or benefits of, or pay or otherwise grant any bonus not required by any Seller Benefit Plan, Seller Benefit Agreement or other written agreement to, any Business Employee or (C) enter into any contract to do any of the foregoing, except, in the case of clauses (A), (B) and (C), (1) to the extent required by applicable Law, (2) as may be required under any Seller Benefit Plan or Seller Benefit Agreement or (3) with respect to any Seller Benefit Plan, Seller Benefit Agreement or other written agreement that is not an Assumed Benefit Plan, Assumed Benefit Agreement or a CBA or in the case of clause (B), (x) in the ordinary course of business, (y) as would relate to a substantial number of other similarly situated employees of the Seller or its affiliates (other than the Transferred Entities), or (z) for any actions described in each of clauses (B) and (C) for which the Seller or its affiliates (other than the Transferred Entities) shall be solely obligated, and which would not result in a material liability to the Purchaser;
(t) change the fiscal year of any Transferred Entity, revalue any of its material assets or make any change in any method of accounting or accounting practice or policy (including procedures with respect to the payment of accounts payable and collection of accounts receivable), except as required by the mandatory provisions of GAAP or applicable Law;
(u) make, revoke or change any tax election material Tax election, adopt or change any material Tax accounting method or period, file any material amended Tax Return, settle any material Tax claim or compromise assessment, consent to any income tax liability;
(s) other than extension or waiver of the statute of limitations period applicable to any Tax claim or assessment, except for consents made in the ordinary course of business consistent with past practice, change or surrender any method of accountingright to claim a Tax refund, accounting policy offset or accounting practiceother reduction in Tax liability, except for any such change required by reason in the ordinary course of a concurrent change in GAAP as concurred business consistent with by the Company's independent auditors;
(t) fail to maintain insurance coverage at presently existing levels;
(u) make any repayments of principal to W or its Affiliates in respect of any Indebtedness owed to W or its Affiliates or any payment of interest accrued in respect of such Indebtedness;past practice; or
(v) agree authorize any of, or commit to do any of the foregoing; or
(w) knowingly take or agree or commit to take any action that would make any representation and warranty of W or the Company hereunder inaccurate in any material respect at, or as of any time prior totake, the Closing, except for any representations or warranties that are made as of a specified dateforegoing actions.
Appears in 1 contract
Samples: Purchase Agreement (Global Brass & Copper Holdings, Inc.)
Covenants Relating to Conduct of Business. Section 7.016.1. Conduct of Business of Home Account and Home Network. ---------------------------------------------------- During the Company. From period from the date hereof until of this Agreement to the ClosingEffective Time of the Merger, unless Parent shall otherwise consent in writing and except as otherwise expressly contemplated or permitted by this Agreement, Home Account will, and will cause Home Network to, to the Company and the Subsidiaries shall conduct their extent permitted by this Agreement, operate its business solely in the ordinary course course, consistent with past practice and in compliance good faith with all applicable laws the goal of preserving intact its assets and shall use their reasonable best efforts to preserve intact their current business organizations and relationships with third parties and to keep organizations, keeping available the services of their present its current officers and employees, maintaining the Home Account Contracts and preserving its relationships with customers, suppliers, creditors, brokers, agents and others with whom it has business dealings. Without limiting the generality of the foregoing, from the date hereof until the Closing and except as otherwise expressly contemplated by this Agreement or the other Transaction Agreements, as may result from the consummation of the Transactions, as set forth in Section 7.01 of the Company Disclosure ScheduleAgreement, or as otherwise consented agreed to in writing by Parent (except if such consent would be inconsistent with applicable law)Parent, such consent not Home Account agrees as to be unreasonably withheld with respect to the granting of IRUs in fiber and/or conduit by the Company or the Subsidiaries, the Company shall not itself and shall cause the Subsidiaries not toHome Network that:
(a) adopt or propose any change in its articles of incorporation, bylaws or other organizational documents;
(b) Home Account and Home Network shall not issue, deliver, sell, pledge sell or transfer or authorize or propose the issuance, delivery, sale, pledge or transfer of grant any shares of its capital stock of any class class, or any securities or rights convertible into into, exchangeable for, or exercisable forevidencing the right to subscribe for any shares of capital stock, or any rights, warrants, options options, calls, commitments or any other agreements of any character to purchase or acquire any shares of capital stock or any securities or rights convertible into, exchangeable for, or evidencing the right to acquiresubscribe for, any such shares of capital stock or enter into any agreement with other securities in respect to the foregoing other than (i) the issuance of Company Common Stock upon exercise of stock options or warrantsof, in lieu of, or conversion of Preferred Stockin substitution for, shares outstanding on the date hereof.
(b) Neither Home Account nor Home Network shall (i) split, combine, subdivide or reclassify any shares of its capital stock or (ii) declare, set aside for payment or pay any dividend, or make any other distribution in respect of, any of its capital stock, or redeem or repurchase any of its capital stock or any outstanding options, warrants or rights of any kind to acquire any shares of, or any outstanding securities that are convertible into or exchangeable for any shares of its capital stock, except for repurchases of unvested shares in connection with the termination of a relationship with any employee, consultant or director pursuant to stock option or purchase agreements in effect on the date hereof or approved by Parent.
(c) Neither Home Account nor Home Network shall adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization.
(d) Neither Home Account nor Home Network shall adopt any amendments to its certificate of incorporation or bylaws or alter through merger, liquidation, reorganization, restructuring or in accordance with their present termsany other fashion its corporate structure or ownership.
(e) Except as contemplated by Section 7.5, neither Home Account nor Home Network shall (i) incur any additional indebtedness for money borrowed or guarantee any such indebtedness of another Person, other than up to $500,000 which may be borrowed from First Data Resources, Inc. or its affiliates, (ii) as required by Contracts in effect as enter into any "keep well" or other agreement to maintain any financial condition of the date of this Agreement that are listed in Section 4.05 of the Company Disclosure Schedule and another Person or (iii) enter into any arrangement having the issuance economic effect of capital stock any of the Company as foregoing.
(f) Neither Home Account nor Home Network shall acquire or agree to acquire by merging or consolidating with, or by purchasing a dividend in respect substantial portion of Preferred Stock outstanding on the date hereof in accordance with its present terms;
assets of, or by any other manner, (i) acquire (by merger, consolidation any business or acquisition of stock or assets) any corporation, partnership limited liability company, partnership, joint venture, association or other business organization or division thereof, thereof or (ii) sellany assets that, lease individually or otherwise dispose of a Subsidiary or (iii) sell, lease or otherwise dispose of an amount of assets or securities, including IRUs, for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), except for transactions in the ordinary course consistent with past practice;
aggregate, are material to Home Account except (dwithout limitation of Section 6.1((h)) merge or consolidate with any other Person;
(e) make any investment, whether by purchase of stock or securities, contributions below but subject to capital or any property transfer (other than investments in cash or cash equivalents with a maturity of less than 90 days or investments in wholly-owned Subsidiaries made, in each caseSection 6.1((i))), in the ordinary course of business consistent with past practice), or purchase for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), any property or assets of any other individual or entity, except for inventory purchased for resale in the ordinary course of business consistent with past practice;
(f) enter into any agreement or arrangement that limits or otherwise restricts the Company or any of the Subsidiaries or any of their respective Affiliates or successors thereto or that by its terms could, after the Effective Time, limit or restrict Parent or the Company or any of their respective Affiliates or any successor thereto, from engaging or competing in any line of business or in any geographic area;.
(g) other than in the ordinary course of business consistent with past practice, waive, release or relinquish any material right;
(h) other than in the ordinary course of business consistent with past practice, modify or change in any material respect any existing material license, lease, contract, or other agreement;
(i) enter into any agreements involving aggregate expenditures or receipts of more than $100,000 individually or $500,000 in the aggregate (or, with respect to (i) any Cost of Services Contract, $1,000,000 and (ii) switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any agreements in the ordinary course of business consistent with past practice, including but not limited to installation fees and customer premise equipment, in each case, associated with new customers and in the ordinary course of business consistent with past practice;
(j) create, incur or assume, or execute any new guarantee of, any Indebtedness in excess of $100,000 in the aggregate (other than indebtedness for borrowed money owing to W or any of its Affiliates) or prepay any Indebtedness;
(k) other than pursuant to arrangements existing on the date hereof, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for obligations of any other person (other than any Subsidiary) in an amount in excess of $100,000;
(l) make any loans or advances other than (i) loans or advances to wholly-owned Subsidiaries made in the ordinary course of business consistent with past practice and (ii) routine salary, travel and expense advances to Company Employees in the ordinary course of business consistent with past practice;
(i) engage in any transaction, or enter into any contract, agreement or arrangement (other than this Agreement, the Transactions and the incurrence of indebtedness for borrowed money owing to W or any of its Affiliates and transactions pursuant to any such contract, agreement or arrangement entered into on or prior to the date hereof), with any Affiliate, (ii) engage in any transaction, or enter into any contract, agreement or arrangement, with any portfolio company of W that is not on arm's length terms and Except in the ordinary course of business, neither Home Account nor Home Network shall sell, lease, license or (iii) amend, waive otherwise encumber or relinquish any rights relating subject to any such transactionLien or otherwise dispose of any of the properties or assets of Home Account or Home Network that, contract, agreement individually or arrangement referred to in clause (i) or (ii) that will remain outstanding after the Closing in accordance with Section 8.05;
(n) authorize any new capital expenditures which, individually, are greater than $100,000 or, in the aggregate, would cause total capital expenditures for year ending December 31, 2003 are material to exceed $500,000 Home Account.
(or, with respect h) Neither Home Account nor Home Network shall make or agree to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than make any capital expenditures not previously approved by the Board of Directors in Home Account's 2000 or 2001 capital budget as set forth in Section 6.1(h) of the Home Account Disclosure Schedule.
(i) Except in the ordinary course of business consistent with past practice;
(o) splitbusiness, combine or reclassify any shares of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, other than neither Home Account nor Home Network shall (i) cash dividends and distributions by a wholly-owned Subsidiary to enter into any Contract in excess of $10,000 individually or in the Company or to a Subsidiary all of the capital stock which is owned directly or indirectly by the Company aggregate, or (ii) the issuance of Company Common Stock upon exercise of stock options modify, amend or warrantstransfer in any respect or terminate any Home Account Contract or waive, release or conversion of Preferred Stock, outstanding on the date hereof assign any rights or claims thereunder.
(j) Except as set forth in accordance with their present terms; or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its securities or any securities Section 6.1((j)) of the Subsidiaries;
(p) Home Account Disclosure Schedule, neither Home Account nor Home Network shall (i) adopt or amend (except as may be required by law) any bonus, profit sharing, compensation, stock option, pension, retirement, deferred compensation, employment or other employee benefit plan, agreement, trust, fund or other arrangement (including any Home Account Benefit Plan) for the benefit or welfare of any employee, officer, director or service provider or former employee, officer, director or service provider, (ii) increase the compensation or fringe benefits of any Company Employee (except for (x) increases in salary such individuals of Home Account or wages in the ordinary course of business consistent with past practiceHome Network, (y) the payment of accrued or earned but unpaid bonuses and (z) stay bonuses or similar retention payments in an amount not to exceed $10,000 with respect to any individual payment and $100,000 in the aggregate with respect to all such payments), (ii) grant any severance or termination pay to any Company Employee, (iii) loan except as provided in an existing Home Account Benefit Plan, increase the compensation or advance fringe benefits of any money such individuals or other property pay any benefit not required by any existing plan, arrangement or agreement.
(k) Neither Home Account nor Home Network shall make any change to its accounting methods, principles or practices, except as may be required by GAAP.
(l) Neither Home Account nor Home Network shall create, incur or assume any Company Employee Lien on any of its material assets.
(other than routine salarym) Neither Home Account nor Home Network shall settle any litigation or waive, travel and expense advances to Company Employees assign or release any rights or claims except in either case (i) in the ordinary course of business and consistent with past practice), (ivii) establish, adopt, enter into, amend or terminate for any Company Plan, collective bargaining or labor agreement or any plan, agreement, program, policy, trust, fund or other arrangement that such settlement which (x) would be a Company Plan if it were in existence as not impose either restrictions on the conduct of the date business of this Agreement (other than as may be required by the terms of an existing Company Plan Home Account or collective bargaining agreement, or as may be required by applicable law or in order to qualify under Sections 401 and 501 of the Code), Home Network or (vy) grant any equity or equity-based awardsfor litigation items settled for money, other than involve in the cases aggregate in excess of clauses (i) through (v) pursuant $10,000 in cost to commitments of the Company Home Account or any Subsidiary existing on the date hereof required by contracts set forth in Section 4.08(k) or Section 4.12 of the Company Disclosure Schedule;
(q) Home Network. Neither Home Account nor Home Network shall pay, discharge or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction except in the ordinary course of business of liabilities reflected or reserved against in the consolidated financial statements of the Company referred to in Section 4.07 or liabilities incurred in the ordinary course of business;accordance with their terms.
(rn) Neither Home Account nor Home Network shall make or change rescind any tax material express or deemed election or relating to Taxes, settle or compromise any material claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to Taxes, or make any material change to any of its methods of reporting income or deductions for federal income tax liability;purposes from those employed in the preparation of its latest federal income tax return, except as may be required by applicable Law.
(so) other than Neither Home Account nor Home Network shall commence any material research and development project or terminate any material research and development project that is currently ongoing, in the ordinary course of business consistent with past practice, change any method of accounting, accounting policy or accounting practiceeither case, except for any such change required by reason pursuant to the terms of a concurrent change in GAAP as concurred with by the Company's independent auditors;existing Contracts.
(tp) fail Neither Home Account nor Home Network shall authorize, recommend, propose or announce an intention to maintain insurance coverage at presently existing levels;
(u) make take, or agree in writing or otherwise to take, or have any repayments of principal affiliate, director, officer, employee, agent, consultant or other third party take or otherwise agree to W or its Affiliates in respect of any Indebtedness owed to W or its Affiliates or any payment of interest accrued in respect of such Indebtedness;
(v) agree or commit to do take, any of the foregoing; oractions described in Sections 6.1
(wa) knowingly take through 6.1(o) or agree or commit to take any action that which would make any representation and warranty of W or the Company hereunder inaccurate in any material respect at, or as of any time prior to, the Closing, except for any representations or warranties that are made of Home Account contained in this Agreement untrue or incorrect.
(q) Home Account shall, and shall cause Home Network to, use commercially reasonable efforts to maintain in full force and effect all self-insurance or insurance, as of a specified datethe case may be, currently in effect.
Appears in 1 contract
Covenants Relating to Conduct of Business. (a) Except for matters set forth in Section 7.01. Conduct 5.01 of the Company. From Company Disclosure Schedule or otherwise expressly permitted or required by the terms of this Agreement or except as required by Applicable Law, from the date hereof until of this Agreement to the Closing, the Company and the Subsidiaries shall conduct their its business in the ordinary course consistent with past practice in compliance with all applicable laws Ordinary Course of Business and shall use their reasonable best efforts to preserve keep intact their business organizations and relationships with third parties and to its business, keep available the services of their present officers its current officers, employees and employeesagents and maintain its relations and good will, preserve its relationships with customers, suppliers, licensors, licensees, distributors landlords, creditors, employees (other than employees that are approached by Purchaser regarding entering into employment agreements with Purchaser in connection with the Acquisition), agents and others having business relationships with it; provided, however, that Principal Seller shall not be obligated to, directly or indirectly, provide any funds to the Company. Without The Company shall not take any action that would result in any of the conditions to the purchase and sale of the shares of Common Stock and Preferred Stock set forth in Article VI not being satisfied. In addition (and without limiting the generality of the foregoing), from the date hereof until the Closing and except as expressly contemplated by this Agreement or the other Transaction Agreements, as may result from the consummation of the Transactions, as set forth in Section 7.01 5.01 of the Company Disclosure Schedule or otherwise expressly permitted or required by the terms of this Agreement or except as required by Applicable Law, the Company shall not do any of the following without the prior written consent of Purchaser (which consent may not be unreasonably withheld):
(i) amend its certificate of incorporation or by-laws;
(ii) declare or pay any dividend or make any other distribution to its stockholders whether or not upon or in respect of any shares of its capital stock;
(iii) issue any capital stock or any option, warrant or right relating thereto or any securities convertible into or exchangeable for any shares of capital stock;
(iv) adopt or amend any Company Benefit Plan (or any plan that would be a Company Benefit Plan if adopted) or enter into, adopt, extend (beyond the Closing Date), renew or amend any collective bargaining agreement or other Contract with any labor organization, union or association;
(v) except for the matters set forth in Section 5.01 of the Company Disclosure Schedule, establish or as otherwise consented adopt any employee benefit plan or make any profit-sharing or similar payment to in writing by Parent (except if such consent would be inconsistent with applicable law)any of its directors, such consent not to be unreasonably withheld with respect to the granting of IRUs in fiber and/or conduit by the Company officers, employees or the Subsidiaries, the Company shall not and shall cause the Subsidiaries not to:
(a) adopt or propose any change in its articles of incorporation, bylaws or other organizational documentsindependent contractors;
(bvi) issuepay any bonus, deliverincrease the amount of the wages, sellsalary, pledge commissions, fees, fringe benefits or transfer other compensation or authorize remuneration payable to, any of its directors, officers, employees or propose independent contractors, except for any items not in excess of $25,000 individually or $100,000 in the issuanceaggregate;
(vii) incur or assume any Liabilities, deliveryobligations or Indebtedness for borrowed money or guarantee any such Liabilities, saleobligations or Indebtedness, pledge other than in the Ordinary Course of Business;
(viii) permit, allow or transfer suffer any of its assets to become subjected to any Lien (other than Permitted Liens) of any shares of its capital stock of any class or any securities convertible into or exercisable for, or any rights, warrants, options or other rights to acquire, any such shares or enter into any agreement with respect to the foregoing other than (i) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding nature whatsoever that is not set forth on the date hereof in accordance with their present terms, (ii) as required by Contracts in effect as of the date of this Agreement that are listed in Section 4.05 3.06 of the Company Disclosure Schedule and (iii) the issuance of capital stock would have been required to be set forth in Section 3.06 or 3.07 of the Company as a dividend in respect of Preferred Stock outstanding Disclosure Schedule if existing on the date hereof in accordance with its present termsof this Agreement;
(iix) acquire (by mergerpay, consolidation loan or acquisition of stock advance any amount to, or assets) any corporation, partnership or other business organization or division thereof, (ii) sell, transfer or lease or otherwise dispose any of a Subsidiary or (iii) sell, lease or otherwise dispose of an amount of its assets or securities, including IRUs, for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), except for transactions in the ordinary course consistent with past practice;
(d) merge or consolidate with any other Person;
(e) make any investment, whether by purchase of stock or securities, contributions to capital or any property transfer (other than investments in cash or cash equivalents with a maturity of less than 90 days or investments in wholly-owned Subsidiaries made, in each case, in the ordinary course of business consistent with past practice)to, or purchase for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), any property or assets of any other individual or entity, except for inventory purchased for resale in the ordinary course of business consistent with past practice;
(f) enter into any agreement or arrangement that limits or otherwise restricts the Company or any of the Subsidiaries with, Sellers or any of their respective Affiliates or successors thereto or that by its terms couldaffiliates, after the Effective Time, limit or restrict Parent or the Company or any of their respective Affiliates or any successor thereto, from engaging or competing in any line of business or in any geographic area;
(g) other than in the ordinary course of business consistent with past practice, waive, release or relinquish any material right;
(h) other than in the ordinary course of business consistent with past practice, modify or change in any material respect any existing material license, lease, contract, or other agreement;
(i) enter into any agreements involving aggregate expenditures or receipts of more than $100,000 individually or $500,000 in the aggregate (or, with respect to (i) any Cost of Services Contract, $1,000,000 and (ii) switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any agreements in the ordinary course of business consistent with past practice, including but not limited to installation fees and customer premise equipment, in each case, associated with new customers and in the ordinary course of business consistent with past practice;
(j) create, incur or assume, or execute any new guarantee of, any Indebtedness in excess of $100,000 in the aggregate (other than indebtedness for borrowed money owing to W or any of its Affiliates) or prepay any Indebtedness;
(k) other than pursuant to arrangements existing on the date hereof, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for obligations of any other person (other than any Subsidiary) in an amount in excess of $100,000;
(l) make any loans or advances other than (i) loans or advances to wholly-owned Subsidiaries made in the ordinary course of business consistent with past practice and (ii) routine salary, travel and expense advances to Company Employees in the ordinary course of business consistent with past practice;
(i) engage in any transaction, or enter into any contract, agreement or arrangement (other than this Agreement, the Transactions and the incurrence of indebtedness for borrowed money owing to W or any of its Affiliates and transactions pursuant to any such contract, agreement or arrangement entered into on or prior to the date hereof), with any Affiliate, (ii) engage in any transaction, or enter into any contract, agreement or arrangement, with any portfolio company of W that is not on arm's length terms and in the ordinary course of business, or (iii) amend, waive or relinquish any rights relating to any such transaction, contract, agreement or arrangement referred to in clause (i) or (ii) that will remain outstanding after the Closing in accordance with Section 8.05;
(n) authorize any new capital expenditures which, individually, are greater than $100,000 or, in the aggregate, would cause total capital expenditures for year ending December 31, 2003 to exceed $500,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any capital expenditures in the ordinary course of business consistent with past practice;
(o) split, combine or reclassify any shares of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, other than (i) cash dividends and distributions by a wholly-owned Subsidiary to the Company or to a Subsidiary all of the capital stock which is owned directly or indirectly by the Company or (ii) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms; or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its securities or any securities of the Subsidiaries;
(p) (i) increase the compensation or fringe benefits of any Company Employee (except for (x) increases in salary or wages in the ordinary course of business consistent with past practice, (y) the payment of accrued or earned but unpaid bonuses and (z) stay bonuses or similar retention payments in an amount not to exceed $10,000 with respect to any individual payment and $100,000 in the aggregate with respect to all such payments), (ii) grant any severance or termination pay to any Company Employee, (iii) loan or advance any money or other property to any Company Employee (other than routine salary, travel and expense advances to Company Employees in the ordinary course of business and consistent with past practice), (iv) establish, adopt, enter into, amend or terminate any Company Plan, collective bargaining or labor agreement 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 of this Agreement (other than as may be required by the terms of an existing Company Plan or collective bargaining agreement, or as may be required by applicable law or in order to qualify under Sections 401 and 501 of the Code), or (v) grant any equity or equity-based awards, other than in the cases of clauses (i) through (v) pursuant to commitments of the Company or any Subsidiary existing on the date hereof required by contracts matters set forth in Section 4.08(k) or Section 4.12 5.01 of the Company Disclosure Schedule;
(qx) pay, discharge make any change in any method of accounting or satisfy any claims, liabilities accounting practice or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), policy other than the payment, discharge or satisfaction in the ordinary course of business of liabilities reflected or reserved against in the consolidated financial statements of the Company referred to in Section 4.07 or liabilities incurred in the ordinary course of businessthose required by GAAP;
(rxi) acquire by merging or consolidating with, or by purchasing a substantial portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or otherwise acquire any assets (other than inventory) that are material;
(xii) make or incur capital expenditures that are not currently budgeted and that, in the aggregate, are in excess of $50,000;
(xiii) sell, lease, license or otherwise dispose of any of its assets that are material, individually or in the aggregate, to the Company, except inventory sold in the Ordinary Course of Business;
(xiv) enter into any lease of real property;
(xv) terminate any insurance policy in effect as of the date hereof or allow any material insurance policy to be terminated, in either case without using reasonable efforts to obtain a replacement insurance policy on comparable terms to the Company;
(xvi) form any subsidiary or acquire the equity of any Person;
(xvii) commence or settle any Proceeding;
(xviii) enter into any Contract, transaction or take any other action outside the Ordinary Course of Business;
(xix) enter into any transaction or take any other action that the Company knows will cause or constitute a breach of any representation or warranty made by the Company or Sellers in this Agreement;
(xx) discontinue the payment of its accounts payable that are payable in the Ordinary Course of Business or deviate from or alter any of its practices, policies or procedures in paying accounts payable other than in the Ordinary Course of Business;
(xxi) make any material modification to any material Contract or Permit; and
(xxii) make or change any tax election election, change an annual accounting period, adopt or change any accounting method, file any amended Tax Return, enter into any closing agreement, settle any Tax claim or compromise assessment relating to the Company, surrender any income tax liabilityright to claim a refund of Taxes, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or take other similar action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action would or could be reasonably expected to increase any Tax liability of the Company by an amount in excess of $25,000 for any period ending after the Closing Date; and
(xxiii) agree, commit or offer (in writing or otherwise) to take any of the actions described in clauses "(i)" through "(xxii)" of this Section 5.01.
(b) In addition (and without limiting the generality of the foregoing), except as set forth in Section 5.01 of the Company Disclosure Schedule or otherwise expressly permitted or required by the terms of this Agreement or except as required by Applicable Law, the Company shall:
(i) promptly (but in any event, no later than three business days after the applicable matter or event) advise Purchaser in writing of the occurrence of any matter or event that (A) constitutes or would reasonably be expected to constitute a Company Material Adverse Effect, (B) resulted or would reasonably be expected to result in a material breach of any of representations and warranties set forth in Article II or Article III of this Agreement or (C) would reasonably be expected to (i) constitute a Seller Material Adverse Effect with respect to any Seller or (ii) adversely affect the ability of the Company to consummate the transactions contemplated by this Agreement;
(sii) other than confer with Purchaser concerning operational matters of a material nature and otherwise report periodically to Purchaser concerning the status of the business, operations, and finances of the Company;
(iii) use reasonable best efforts to maintain in full force and effect all material Intellectual Property of the Company;
(iv) comply with all Applicable Laws in the ordinary course operation of business consistent with past practice, change any method of accounting, accounting policy or accounting practice, except for any such change required by reason of a concurrent change in GAAP as concurred with by the Company's independent auditors;
(t) fail to maintain insurance coverage at presently existing levels;
(u) make any repayments of principal to W or its Affiliates in respect of any Indebtedness owed to W or its Affiliates or any payment of interest accrued in respect of such Indebtednessbusiness;
(v) agree cooperate with the Purchaser and use its reasonable best efforts to cause the conditions to the Purchaser's obligations to close specified in Article VI below to be satisfied and execute and deliver such further instruments of conveyance and transfer and take such additional action as the Purchaser may reasonably request to effect, consummate, confirm or commit evidence the transactions contemplated by this Agreement; and
(vi) upon reasonable request, use reasonable best efforts to do any arrange meetings with such customers, suppliers, licensors, licensees, distributors, landlords, creditors, employees, agents and others having business relationships with it as the Purchaser shall reasonably designate in order that the Purchaser and the Company may confer with such Persons regarding the Company and the nature of the foregoing; or
(w) knowingly take or agree or commit to take any action that would make any representation and warranty of W or the Company hereunder inaccurate in any material respect at, or as of any time prior to, the Closing, except for any representations or warranties that are made as of a specified date.transactions contemplated by this Agreement
Appears in 1 contract
Covenants Relating to Conduct of Business. Section 7.01. 4.1 Conduct of Business by the CompanyCompany Pending the Merger. From ----------------------------------------------------- Except as expressly permitted by clauses (i) through (xvii) of this Section 4.1, during the period from the date hereof until of this Agreement through the ClosingEffective Time, the Company shall, and the shall cause each of its Subsidiaries shall conduct their to, in all material respects carry on its business in the ordinary course of its business as currently conducted and, to the extent consistent with past practice in compliance with all applicable laws and shall therewith, use their reasonable best efforts to preserve intact their its current business organizations and relationships with third parties and to organizations, keep available the services of their present its current officers and employeesemployees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time. Without limiting the generality of the foregoing, from the date hereof until the Closing and except as otherwise expressly contemplated by this Agreement or the other Transaction Agreements, as may result from the consummation of the Transactions, as set forth in Section 7.01 of the Company Disclosure Schedule, or as otherwise consented to in writing by Parent Letter (except if such consent would be inconsistent with applicable law), such consent not to be unreasonably withheld with respect specific reference to the granting of IRUs in fiber and/or conduit by the Company or the Subsidiariesapplicable subsection below), the Company shall not not, and shall cause not permit any of its Subsidiaries to, without the Subsidiaries not toprior written consent of Parent:
(ai) adopt (A) other than dividends paid by wholly-owned Subsidiaries, declare, set aside or propose pay any change dividends on, or make any other actual, constructive or deemed distributions in respect of, any of its articles capital stock, or otherwise make any payments to its shareholders in their capacity as such, (B) other than in the case of incorporationany Subsidiary, bylaws split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or (C) purchase, redeem or otherwise acquire any shares of capital stock of the Company or any other securities thereof or any rights, warrants or options to acquire any such shares or other organizational documentssecurities;
(bii) issue, deliver, sell, pledge pledge, dispose of or transfer or authorize or propose the issuance, delivery, sale, pledge or transfer of otherwise encumber any shares of its capital stock of stock, any class other voting securities or equity equivalent or any securities convertible into or exercisable forinto, or any rights, warrants, warrants or options or other rights (including options under the Company Stock Option Plans) to acquire, acquire any such shares shares, voting securities, equity equivalent or enter into any agreement with respect to the foregoing convertible securities, other than (iA) the issuance of shares of Company Common Stock upon the exercise of stock options or warrants, or conversion of Preferred Stock, Company Stock Options outstanding on the date hereof in accordance with their present terms, (ii) as required by Contracts in effect as of the date of this Agreement that are listed in Section 4.05 of the Company Disclosure Schedule accordance with their current terms and (iiiB) the issuance of capital stock shares of Company Common Stock pursuant to the Company as a dividend in respect of Preferred Stock outstanding on the date hereof in accordance with its present termsOption Agreement;
(iiii) amend its charter or by-laws or amend the Company Rights Agreement, except that the Company shall cause the Rights Agent to execute and deliver the amendment to the Company Rights Agreement in the form of Exhibit C hereto; ---------
(iv) acquire (or agree to acquire by mergermerging or consolidating with, consolidation or acquisition by purchasing a substantial portion of stock the assets of or assets) equity in, or by any other manner, any business or any corporation, partnership limited liability company, partnership, association or other business organization or division thereof, thereof or otherwise acquire or agree to acquire any assets;
(iiv) sell, lease or otherwise dispose of a Subsidiary of, or (iii) agree to sell, lease or otherwise dispose of, any of an amount of assets or securitiesits assets, including IRUs, for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), except for transactions in the ordinary course consistent with past practice;
(d) merge or consolidate with any other Person;
(e) make any investment, whether by purchase of stock or securities, contributions to capital or any property transfer (other than investments in cash or cash equivalents with a maturity sales of less than 90 days or investments in wholly-owned Subsidiaries made, in each case, in the ordinary course of business consistent with past practice), or purchase for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), any property or assets of any other individual or entity, except for inventory purchased for resale that are in the ordinary course of business consistent with past practice;
(fvi) enter into incur any agreement indebtedness for borrowed money, guarantee any such indebtedness or arrangement that limits make any loans, advances or otherwise restricts the Company capital contributions to, or other investments in, any of the Subsidiaries or any of their respective Affiliates or successors thereto or that by its terms couldother person, after the Effective Time, limit or restrict Parent or the Company or any of their respective Affiliates or any successor thereto, from engaging or competing in any line of business or in any geographic area;
(g) other than (A) in the ordinary course of business consistent with past practicepractices and, waivein the case of indebtedness and guarantees, release in an amount not to exceed $10 million (provided that Parent shall not unreasonably withhold its consent to increases of not more than $30 million) in the aggregate and (B) indebtedness, loans, advances, capital contributions and investments between the Company and any of its wholly-owned Subsidiaries or relinquish between any material right;
(h) other than of such wholly-owned Subsidiaries, in each case in the ordinary course of business consistent with past practicepractices;
(vii) alter (through merger, modify liquidation, reorganization, restructuring or change in any material respect other fashion) the corporate structure or ownership of the Company or any existing material licenseSubsidiary;
(viii) except as provided in Section 4.1(viii) of the Company Letter, lease, contractenter into or adopt any, or other amend any existing, severance plan, agreement or arrangement or enter into or amend any Company Plan or employment or consulting agreement;
(iix) enter into any agreements involving aggregate expenditures except as provided in Section 4.1(ix) of the Company Letter, increase the compensation payable or receipts of more than $100,000 individually to become payable to its directors, officers or $500,000 in the aggregate employees (or, with respect to (i) any Cost of Services Contract, $1,000,000 and (ii) switch software upgrades except for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any agreements in the ordinary course of business consistent with past practice, including but not limited to installation fees and customer premise equipment, in each case, associated with new customers and in the ordinary course of business consistent with past practice;
(j) create, incur or assume, or execute any new guarantee of, any Indebtedness in excess of $100,000 in the aggregate (other than indebtedness for borrowed money owing to W or any of its Affiliates) or prepay any Indebtedness;
(k) other than pursuant to arrangements existing on the date hereof, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for obligations of any other person (other than any Subsidiary) in an amount in excess of $100,000;
(l) make any loans or advances other than (i) loans or advances to wholly-owned Subsidiaries made increases in the ordinary course of business consistent with past practice and (ii) routine salary, travel and expense advances to in salaries or wages of employees of the Company Employees in the ordinary course of business consistent with past practice;
(i) engage in any transaction, or enter into any contract, agreement or arrangement (other than this Agreement, the Transactions and the incurrence of indebtedness for borrowed money owing to W or any of its Affiliates and transactions pursuant to any such contract, agreement or arrangement entered into on or prior to the date hereof), with any Affiliate, (ii) engage in any transaction, or enter into any contract, agreement or arrangement, with any portfolio company Subsidiaries who are not officers of W that is not on arm's length terms and in the ordinary course of business, or (iii) amend, waive or relinquish any rights relating to any such transaction, contract, agreement or arrangement referred to in clause (i) or (ii) that will remain outstanding after the Closing in accordance with Section 8.05;
(n) authorize any new capital expenditures which, individually, are greater than $100,000 or, in the aggregate, would cause total capital expenditures for year ending December 31, 2003 to exceed $500,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any capital expenditures in the ordinary course of business consistent with past practice;
(o) split, combine or reclassify any shares of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, other than (i) cash dividends and distributions by a wholly-owned Subsidiary to the Company or to a Subsidiary all of the capital stock which is owned directly or indirectly by the Company or (ii) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms; or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its securities Subsidiaries) or any securities of the Subsidiaries;
(p) (i) increase the compensation or fringe benefits of any Company Employee (except for (x) increases in salary or wages in the ordinary course of business consistent with past practice, (y) the payment of accrued or earned but unpaid bonuses and (z) stay bonuses or similar retention payments in an amount not to exceed $10,000 with respect to any individual payment and $100,000 in the aggregate with respect to all such payments), (ii) grant any severance or termination pay to to, or enter into any employment or severance agreement with, any director or officer of the Company Employeeor any of its Subsidiaries, (iii) loan or advance any money or other property to any Company Employee (other than routine salary, travel and expense advances to Company Employees in the ordinary course of business and consistent with past practice), (iv) establish, adopt, enter into, or, except as may be required to comply with applicable law, amend in any material respect or terminate take action to enhance in any Company Planmaterial respect or accelerate any rights or benefits under, any labor, collective bargaining bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or labor agreement or any other plan, agreement, program, policy, trust, fund fund, policy or other arrangement that would be a Company Plan if for the benefit of any director, officer or employee;
(x) knowingly violate or knowingly fail to perform any obligation or duty imposed upon it were in existence as of the date of this Agreement or any Subsidiary by any applicable material federal, state or local law, rule, regulation, guideline or ordinance;
(xi) make any change to accounting policies or procedures (other than as may actions required to be required taken by the terms of an existing Company Plan generally accepted accounting principles);
(xii) prepare or collective bargaining agreementfile any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or as may be required by applicable law adopt any method that is inconsistent with positions taken, elections made or methods used in order to qualify under Sections 401 and 501 of the Code)preparing or filing similar Tax Returns in prior periods;
(xiii) make any tax election or settle or compromise any material federal, state, local or foreign income tax liability;
(vxiv) grant commence any equity litigation or equity-based awards, other than in the cases of clauses proceedings or settle or compromise any material claims or litigation;
(xv) enter into or amend any agreement or contract with any customer or supplier (i) through (v) pursuant to commitments having a term in excess of 12 months and which is not terminable by the Company or a Subsidiary without penalty or premium by notice of 30 days or less or (ii) which involves or is expected to involve payments of $10 million or more during the term thereof (provided that in the case of agreements or contracts with any Subsidiary existing on customer, the date hereof required by contracts margins anticipated from any such agreement or contract shall be consistent in all material respects with historical margins); enter into or amend any other agreement or contract material to the Company and its Subsidiaries, taken as a whole; or purchase any real property, except as set forth in Section 4.08(k4.1(xv) or Section 4.12 of the Company Disclosure ScheduleLetter, or make or agree to make any new capital expenditure or expenditures (other than the purchase of real property) which in the aggregate are in excess of $7 million;
(qxvi) pay, discharge or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction satisfaction, in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reflected or reserved against in in, or contemplated by, the consolidated most recent financial statements (or the notes thereto) of the Company referred to in Section 4.07 or liabilities incurred included in the ordinary course of business;
(r) make Company SEC Documents or change any tax election or settle or compromise any income tax liability;
(s) other than incurred in the ordinary course of business consistent with past practice, change any method of accounting, accounting policy or accounting practice, except for any such change required by reason of a concurrent change in GAAP as concurred with by the Company's independent auditors;; or
(txvii) fail to maintain insurance coverage at presently existing levels;
(u) make any repayments of principal to W authorize, recommend, propose or its Affiliates in respect of any Indebtedness owed to W or its Affiliates or any payment of interest accrued in respect of such Indebtedness;
(v) agree or commit announce an intention to do any of the foregoing; or
(w) knowingly take or agree or commit to take any action that would make any representation and warranty of W or the Company hereunder inaccurate in any material respect at, or as enter into any contract, agreement, commitment or arrangement to do any of any time prior to, the Closing, except for any representations or warranties that are made as of a specified dateforegoing.
Appears in 1 contract
Covenants Relating to Conduct of Business. Section 7.01. 6.1 Conduct of Business by the CompanyCompany Pending the Merger. From Except as (x) required by applicable law or by a Governmental Entity of competent jurisdiction, (y) expressly contemplated by this Agreement (including as permitted or required by Section 7.9) or (z) set forth in Section 6.1 of the Company Letter, during the period from the date hereof of this Agreement until the ClosingEffective Time, the Company and the Subsidiaries shall conduct their shall, in all material respects, carry on its business in the ordinary course consistent with past practice in compliance with all applicable laws and shall use their reasonable best efforts to preserve intact their business organizations and relationships with third parties and to keep available the services of their present officers and employeesas currently conducted. Without limiting the generality of the foregoing, from during such period, the date hereof until Company shall not undertake any of the Closing actions described in subsections (a)(i), (b), (c), (d), (h), (p) and (r) below, and except as (x) required by applicable law or by a Governmental Entity of competent jurisdiction, (y) expressly contemplated by this Agreement (including as permitted or the other Transaction Agreements, as may result from the consummation of the Transactions, as required by Section 7.9) or (z) set forth in Section 7.01 6.1 of the Company Disclosure Schedule, or as otherwise consented to in writing by Parent (except if such consent would be inconsistent with applicable law), such consent not to be unreasonably withheld with respect to the granting of IRUs in fiber and/or conduit by the Company or the SubsidiariesLetter, the Company shall not and without the prior written consent of Parent (which consent shall cause the Subsidiaries not to:be unreasonably withheld or delayed):
(a) adopt (i) declare, set aside or propose pay any change dividends on, or make any other distributions in respect of, any of its articles capital stock, (ii) adjust, split, combine or reclassify any of incorporationits capital stock or issue or authorize the issuance of any other securities in respect of, bylaws in lieu of or in substitution for shares of its capital stock or (iii) repurchase, redeem or otherwise acquire any shares of its capital stock or any other organizational documentssecurities convertible into or exchangeable or exercisable for any shares of its capital stock;
(b) issue, grant, deliver, sell, pledge or transfer otherwise encumber or authorize or propose the issuance, delivery, sale, pledge or transfer dispose of any shares of its capital stock of or other equity interests, any class other voting securities or any securities convertible into or exercisable forinto, or any rights, warrants, warrants or options or other rights to acquire, any such shares shares, equity interests, voting securities or enter into any agreement with respect to the foregoing convertible securities, other than (i) the issuance of shares of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, pursuant to Company Awards outstanding on the date hereof in accordance with their present terms, (ii) as required by Contracts in effect as of the date of this Agreement that are listed in Section 4.05 of the Company Disclosure Schedule and (iii) the issuance of capital stock of the Company as a dividend in respect of Preferred Stock outstanding on the date hereof in accordance with its present termsAgreement;
(ic) acquire (by merger, consolidation amend its certificate of incorporation or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof, (ii) sell, lease or otherwise dispose of a Subsidiary or (iii) sell, lease or otherwise dispose of an amount of assets or securities, including IRUs, for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), except for transactions in the ordinary course consistent with past practiceby-laws;
(d) merge or consolidate with any other Person, except for acquisitions and dispositions permitted by clauses (e) and (f) below, respectively, effected by means of a merger or consolidation involving the Company;
(e) make any investment, whether by purchase of stock or securities, contributions to capital or any property transfer (other than investments in cash or cash equivalents with a maturity capital expenditures permitted by Section 6.1(f) and purchases of less than 90 days or investments in wholly-owned Subsidiaries madeinventory, in each case, raw materials and supplies in the ordinary course of business consistent with past practicebusiness, acquire (by merger, consolidation, purchase of stock or otherwise), or agree to so acquire, any entity, business or assets having a purchase for an amount price in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), any property or assets of any other individual or entity, except for inventory purchased for resale in the ordinary course of business consistent with past practice;
(f) enter into any agreement or arrangement that limits or otherwise restricts the Company or any of the Subsidiaries or any of their respective Affiliates or successors thereto or that by its terms could, after the Effective Time, limit or restrict Parent or the Company or any of their respective Affiliates or any successor thereto, from engaging or competing in any line of business or in any geographic area;
(g) other than in the ordinary course of business consistent with past practice, waive, release or relinquish any material right;
(h) other than in the ordinary course of business consistent with past practice, modify or change in any material respect any existing material license, lease, contract, or other agreement;
(i) enter into any agreements involving aggregate expenditures or receipts of more than $100,000 individually or $500,000 in the aggregate aggregate;
(orf) make or agree to make any new capital expenditure, with respect to other than capital expenditures (i) any Cost of Services Contract, $1,000,000 and approved by the Company Board prior to the date hereof as previously disclosed to Parent or within the Company’s capital budget for fiscal 2008 previously made available to Parent or (ii) switch software upgrades for purposes to the extent not covered in clause (i), in an aggregate amount not to exceed $500,000;
(g) sell, lease (as landlord), license (as licensor), encumber by Lien or otherwise, or otherwise dispose of compliance with (by merger, consolidation, sale of stock or assets or otherwise), or agree to sell, lease (as landlord), license (as licensor), encumber or otherwise dispose of, assets having a current value in excess of $500,000 in the Communication Assistance for Law Enforcement Act, $1,000,000)aggregate;
(h) incur any indebtedness, other than any agreements customary trade payables incurred in the ordinary course of business;
(i) except in the ordinary course of business consistent and upon terms not materially adverse to the Company with past practicerespect to such Company Material Contract, including but not limited to installation fees and customer premise equipmentor as required under the terms of a Company Material Contract, enter into, amend or otherwise modify in each case, associated with new customers and in the ordinary course of business consistent with past practiceany material respect any Company Material Contract;
(j) create, incur or assume, or execute any new guarantee of, any Indebtedness in excess of $100,000 in the aggregate (other than indebtedness for borrowed money owing to W or any of its Affiliates) or prepay any Indebtedness;
(k) other than pursuant to arrangements existing on the date hereof, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for obligations of any other person (other than any Subsidiary) in an amount in excess of $100,000;
(l) make any loans or advances other than (i) loans or advances to wholly-owned Subsidiaries made in the ordinary course of business consistent with past practice and (ii) routine salary, travel and expense advances to Company Employees in the ordinary course of business consistent with past practice;
(i) engage in any transaction, or enter into any contract, agreement or arrangement (other than this Agreement, the Transactions and that prohibits the incurrence of indebtedness for borrowed money owing by the Company or prohibits the Company from subjecting to W a Lien any material asset or property of the Company;
(k) make, change or rescind any material Tax election or change a material method of its Affiliates Tax accounting, amend any material Tax Return, fail to pay any Tax when it becomes due and transactions pursuant to payable, or settle or compromise any such contractmaterial federal, agreement state, local, provincial or arrangement entered into on foreign Tax liability, audit, claim or prior to the date hereof), with any Affiliate, (ii) engage in any transactionassessment, or enter into any contract, material closing agreement or arrangement, with any portfolio company of W that is not on arm's length terms and in the ordinary course of businessrelated to Taxes, or (iii) amend, waive or relinquish knowingly surrender any rights relating right to claim any such transaction, contract, agreement or arrangement referred to in clause (i) or (ii) that will remain outstanding after the Closing in accordance with Section 8.05material Tax refund;
(nl) authorize any new capital expenditures whichpledge, individually, are greater than $100,000 or, in the aggregate, would cause total capital expenditures for year ending December 31, 2003 to exceed $500,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any capital expenditures in the ordinary course of business consistent with past practice;
(o) split, combine encumber or reclassify any shares of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, other than (i) cash dividends and distributions by a wholly-owned Subsidiary to the Company or otherwise subject to a Subsidiary all of the capital stock which is owned directly or indirectly by the Company or (ii) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms; or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its securities or any securities of the Subsidiaries;
(p) (i) increase the compensation or fringe benefits of any Company Employee (except for (x) increases in salary or wages in the ordinary course of business consistent with past practice, (y) the payment of accrued or earned but unpaid bonuses and (z) stay bonuses or similar retention payments in an amount not to exceed $10,000 with respect to any individual payment and $100,000 in the aggregate with respect to all such payments), (ii) grant any severance or termination pay to any Company Employee, (iii) loan or advance any money or other property to any Company Employee Lien (other than routine salary, travel and expense advances to Company Employees in the ordinary course of business and consistent with past practice), (iva Permitted Lien) establish, adopt, enter into, amend any material asset or terminate any Company Plan, collective bargaining or labor agreement 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 of this Agreement (other than as may be required by the terms of an existing Company Plan or collective bargaining agreement, or as may be required by applicable law or in order to qualify under Sections 401 and 501 of the Code), or (v) grant any equity or equity-based awards, other than in the cases of clauses (i) through (v) pursuant to commitments property of the Company or any Subsidiary existing on the date hereof required by contracts set forth in Section 4.08(k) or Section 4.12 material portion of the Company Disclosure ScheduleCompany’s assets or properties;
(qm) settle or compromise any pending or threatened suit, action or claim, other than settlements or compromises requiring payments by the Company of no more than $100,000 individually and $500,000 in the aggregate;
(n) pay, discharge or satisfy any material claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (x) the payment, discharge or satisfaction in the ordinary course of business of liabilities reflected or reserved against in the consolidated financial statements Company Financial Statements (or as contemplated by the notes thereto), in all cases not more than $100,000 individually and $500,000 in the aggregate and (y) payment of the Company referred to in Section 4.07 or liabilities Taxes as they become due and payment of trade payables incurred in the ordinary course of business;
(ro) make (w) change its material (A) Tax accounting policies, practices, or (B) annual accounting period, (x) make, change or rescind any tax election or Tax elections, (y) settle or compromise any income tax liabilitymaterial audit, claim, assessment, examination or litigation with respect to Taxes, except, in each case, as may be required by GAAP, or (z) file any material amended Tax Return, enter into any closing agreement with respect to material Taxes, or surrender any right to claim a material refund of Taxes;
(sp) authorize, recommend, propose or announce an intention to adopt a plan of complete or partial liquidation or dissolution of the Company;
(q) allow to lapse or abandon any material Intellectual Property;
(r) implement any layoff of employees that would implicate the Worker Adjustment and Retraining Notification Act of 1988, as amended;
(i) increase the salary or wages payable or to become payable to its directors, executive officers or employees, other than salary increases for employees in the ordinary course of business and consistent with past practicepractice which in any event shall not result in an aggregate increase in salary for all employees in excess of $150,000; (ii) enter into or amend in any material respect any employment or severance agreement that would require payments in excess of $50,000; or (iii) establish, change adopt, enter into or amend in any method material respect, or make any new grants or awards of accountingstock based compensation or other benefits under, accounting any Benefit Plan, any bonus, profit sharing, thrift, stock option, restricted stock, pension, retirement, deferred compensation, or other arrangement for the benefit of, any director, executive officer or employee, except, in each case, as may be required by the terms of any such existing plan, agreement, policy or accounting practice, except for any such change required by reason of a concurrent change in GAAP as concurred arrangement or to comply with by the Company's independent auditorsapplicable law;
(t) fail to maintain insurance coverage at presently existing levels;except as may be required by GAAP or as a result of a change in law, make any material change in its method of accounting; or
(u) make enter into any repayments of principal to W contract or its Affiliates in respect of any Indebtedness owed to W or its Affiliates or any payment of interest accrued in respect of such Indebtedness;
(v) agree or commit agreement to do any of the foregoing; or
(w) knowingly take or agree or commit to take any action that would make any representation and warranty of W or the Company hereunder inaccurate in any material respect at, or as of any time prior to, the Closing, except for any representations or warranties that are made as of a specified date.
Appears in 1 contract
Covenants Relating to Conduct of Business. Section 7.01. Conduct 4.1 Covenants of the Company. From Company During the period from the date hereof of this Agreement and continuing until the Closing, the Company and agrees as to itself with respect to the Subsidiaries Business that (except as expressly contemplated or permitted by this Agreement, including those actions (A) contemplated in the Company Disclosure Schedule, (B) contemplated in this Article IV, or (C) as required by a Governmental Authority or by applicable law, rule or regulation, or to the extent that Parent shall otherwise consent in writing (which consent not to be unreasonably delayed or withheld)), the Company shall conduct their business the Business in the ordinary course and consistent with past practice in compliance with all applicable laws material respects and shall use their reasonable best efforts to preserve intact their business organizations and relationships with third parties and to keep available the services of their present officers and employees. Without limiting the generality not do any of the foregoing, from the date hereof until the Closing and except as expressly contemplated by this Agreement or the other Transaction Agreements, as may result from the consummation of the Transactions, as set forth in Section 7.01 of the Company Disclosure Schedule, or as otherwise consented to in writing by Parent (except if such consent would be inconsistent with applicable law), such consent not to be unreasonably withheld with respect to the granting of IRUs in fiber and/or conduit by the Company or the Subsidiaries, the Company shall not and shall cause the Subsidiaries not tofollowing:
(a) adopt create or propose allow to remain in place any change in its articles Lien on any of incorporation, bylaws the Transferred Assets other than Permitted Liens or other organizational documentsincur or guarantee any material indebtedness for borrowed money except with respect to the incurrence of indebtedness to the extent permitted by the Company’s existing credit facility and any amendment thereof;
(b) issue, deliver, sell, pledge or transfer or authorize or propose the issuance, delivery, sale, pledge or transfer of any shares of its capital stock of any class or any securities convertible into or exercisable for, or any rights, warrants, options or other rights to acquire, any such shares or enter into any agreement with respect to lease of real or personal property or any renewals thereof involving a rental obligation exceeding $60,000 per annum per any such lease, and $150,000 per annum in the foregoing other than aggregate;
(ic) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms, (ii) except for increases as may be required by Contracts in effect applicable law or any contracts or agreements existing as of the date hereof, increase the rate of this Agreement that are listed in Section 4.05 compensation or the benefits payable to any of the officers, employees or contractors of the Company Disclosure Schedule and (iii) the issuance of capital stock of the Company as a dividend in respect of Preferred Stock outstanding on the date hereof in accordance with its present terms;
(i) acquire (by merger, consolidation or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof, (ii) sell, lease or otherwise dispose of a Subsidiary or (iii) sell, lease or otherwise dispose of an amount of assets or securities, including IRUs, for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes 5% of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), except for transactions in the ordinary course consistent with past practicesuch officer’s existing compensation or benefits;
(d) merge enter into, amend or consolidate terminate any bonus, insurance, pension or other Benefit Plan, or except in the ordinary course, consistent with past practices, any severance arrangement or obligation for or with any other Personof its employees;
(e) make any investmentnew commitment or increase any previous commitment for capital expenditures for the Business in an amount exceeding $10,000 per any such capital expenditure, whether by purchase of stock or securities, contributions to capital or any property transfer (other than investments in cash or cash equivalents with a maturity of less than 90 days or investments in wholly-owned Subsidiaries made, in each case, and $100,000 in the ordinary course aggregate; provided that any commitment identified on Schedule 4.1 shall not require the consent or approval of business consistent with past practice), or purchase for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), any property or assets of any other individual or entity, except for inventory purchased for resale in the ordinary course of business consistent with past practiceParent;
(f) enter into any agreement contract that would constitute a Material Contract, terminate, or arrangement that limits assign any Material Contract, waive or otherwise restricts permit the Company loss of any right of substantial value, cancel any debt or claim, or voluntarily suffer any of extraordinary loss and except in the Subsidiaries ordinary course, consistent with past practice, amend or modify any of their respective Affiliates or successors thereto or that by its terms could, after the Effective Time, limit or restrict Parent or the Company or any of their respective Affiliates or any successor thereto, from engaging or competing in any line of business or in any geographic areaMaterial Contract;
(g) other than sell, assign, transfer, license or convey any Business Intellectual Property, except for licenses of Business Intellectual Property granted in the ordinary normal course of business consistent with past practice, waive, release or relinquish any material rightbusiness;
(h) sell, transfer, lease or otherwise dispose of any material part of the Transferred Assets other than in the ordinary course of business consistent with past practice, modify or change in any material respect any existing material license, lease, contract, or other agreement;
(i) enter into any agreements involving aggregate expenditures or receipts of more than $100,000 individually or $500,000 in the aggregate (or, with respect to (i) any Cost of Services Contract, $1,000,000 and (ii) switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any agreements in the ordinary course of business consistent with past practice, including but not limited to installation fees and customer premise equipment, in each case, associated with new customers and in the ordinary course of business consistent with past practice;
(j) create, incur or assume, or execute any new guarantee of, any Indebtedness in excess of $100,000 in the aggregate (other than indebtedness for borrowed money owing to W or any of its Affiliates) or prepay any Indebtedness;
(k) other than pursuant to arrangements existing on the date hereof, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for obligations of any other person (other than any Subsidiary) in an amount in excess of $100,000;
(l) make any loans or advances other than (i) loans or advances to wholly-owned Subsidiaries made in the ordinary course of business consistent with past practice and (ii) routine salary, travel and expense advances to Company Employees in the ordinary course of business consistent with past practice;
(i) engage in any transaction, or enter into any contract, agreement or arrangement (other than this Agreement, the Transactions and the incurrence of indebtedness for borrowed money owing to W or any of its Affiliates and transactions pursuant to any such contract, agreement or arrangement entered into on or prior to the date hereof), with any Affiliate, (ii) engage in any transaction, or enter into any contract, agreement or arrangement, with any portfolio company of W that is not on arm's length terms and in the ordinary course of business, or (iii) amend, waive or relinquish any rights relating to any such transaction, contract, agreement or arrangement referred to in clause (i) or (ii) that will remain outstanding after the Closing in accordance with Section 8.05;
(n) authorize any new capital expenditures which, individually, are greater than $100,000 or, in the aggregate, would cause total capital expenditures for year ending December 31, 2003 to exceed $500,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any capital expenditures in the ordinary course of business consistent with past practice;
(o) split, combine or reclassify any shares of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, other than (i) cash dividends and distributions by a wholly-owned Subsidiary to the Company or to a Subsidiary all of the capital stock which is owned directly or indirectly by the Company or (ii) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms; or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its securities or any securities of the Subsidiaries;
(p) (i) increase the compensation or fringe benefits of any Company Employee (except for (x) increases in salary or wages in the ordinary course of business consistent with past practice, (y) the payment of accrued or earned but unpaid bonuses and (z) stay bonuses or similar retention payments in an amount not to exceed $10,000 with respect to any individual payment and $100,000 in the aggregate with respect to all such payments), (ii) grant any severance or termination pay to any Company Employee, (iii) loan or advance any money or other property to any Company Employee (other than routine salary, travel and expense advances to Company Employees in the ordinary course of business and consistent with past practice), (iv) establish, adopt, enter into, amend or terminate any Company Plan, collective bargaining or labor agreement 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 of this Agreement (other than as may be required by the terms of an existing Company Plan or collective bargaining agreement, or as may be required by applicable law or in order to qualify under Sections 401 and 501 of the Code), or (v) grant any equity or equity-based awards, other than in the cases of clauses (i) through (v) pursuant to commitments of the Company or any Subsidiary existing on the date hereof required by contracts set forth in Section 4.08(k) or Section 4.12 of the Company Disclosure Schedule;
(q) pay, discharge or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business of liabilities reflected or reserved against in the consolidated financial statements of the Company referred to in Section 4.07 or liabilities incurred in the ordinary course of business;
(ri) make acquire any other business or change Person or otherwise purchase any tax election or settle or compromise any income tax liabilityassets with an aggregate value in excess of $50,000;
(sj) other than in enter into or materially modify any material agreement or arrangement with any Affiliate, the ordinary course directors, officers or employees of business consistent with past practice, change the Business or their family members or any method of accounting, accounting policy or accounting practice, except for any such change required by reason of a concurrent change in GAAP as concurred with by the Company's independent auditors;their respective Affiliates; or
(tk) fail enter into any contract, agreement, commitment or arrangement with respect to maintain insurance coverage at presently existing levels;
(u) make any repayments of principal to W or its Affiliates in respect of any Indebtedness owed to W or its Affiliates or any payment of interest accrued in respect of such Indebtedness;
(v) agree or commit to do any of the foregoing; or
(w) knowingly take or agree or commit to take any action that would make any representation and warranty of W or the Company hereunder inaccurate in any material respect at, or as of any time prior to, the Closing, except for any representations or warranties that are made as of a specified date.
Appears in 1 contract
Covenants Relating to Conduct of Business. Section 7.01. Conduct Except as otherwise expressly provided in this Agreement or except with the prior consent of the Company. From Parent, which consent shall not be unreasonably withheld, conditioned or delayed, from the date hereof until of this Agreement to the ClosingEffective Time or the earlier termination of this Agreement, the Company and the Subsidiaries shall will conduct their its business in all material respects in the ordinary course consistent with past practice in compliance with all applicable laws and shall use their reasonable best efforts to preserve intact their business organizations and relationships with third parties and to keep available the services Ordinary Course of their present officers and employeesBusiness. Without limiting the generality of the foregoing, from the date hereof until the Closing and except as expressly contemplated by this Agreement Effective Time or the other Transaction Agreements, as may result from the consummation earlier termination of the Transactions, as set forth in Section 7.01 of the Company Disclosure Schedule, or as otherwise consented to in writing by Parent (except if such consent would be inconsistent with applicable law), such consent not to be unreasonably withheld with respect to the granting of IRUs in fiber and/or conduit by the Company or the Subsidiariesthis Agreement, the Company will not, and will not permit any of its Subsidiaries to, without the prior consent of Parent, which consent shall not and shall cause the Subsidiaries not tobe unreasonably withheld, conditioned or delayed:
(a) adopt declare, set aside or propose pay any change dividends on, or make any other distributions in respect of, any of its articles of incorporationcapital stock, bylaws or other organizational documentsthan dividends and distributions by a Company Subsidiary to its parent in accordance with applicable law;
(b) split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, except as contemplated in the transactions described in Schedule 3.3(b);
(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;
(d) authorize for issuance, issue, deliver, sell, pledge or transfer or authorize or propose the issuance, delivery, sale, pledge or transfer of otherwise encumber any shares of its capital stock or the capital stock of any class of its Subsidiaries, any other voting securities or any securities convertible into or exercisable forinto, or any rights, warrants, warrants or options or other rights to acquire, any such shares, voting securities or convertible securities or any other securities or equity equivalents (including without limitation stock appreciation rights) other than the issuance of shares upon the exercise or settlement of Company options, warrants or equity awards;
(e) amend its certificate or articles of incorporation, by-laws or other comparable charter or organizational documents;
(f) acquire or agree to acquire by merging or 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 which would be material to the Company and its Subsidiaries, taken as a whole;
(g) 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 Parent 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 agreement with respect to arrangement having the foregoing other than (i) the issuance economic effect of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms, (ii) as required by Contracts in effect as any of the date of this Agreement that are listed in Section 4.05 of the Company Disclosure Schedule and (iii) the issuance of capital stock of the Company as a dividend in respect of Preferred Stock outstanding on the date hereof in accordance with its present termsforegoing;
(ih) acquire (by mergermake any loans, consolidation advances or acquisition of stock capital contributions to, or assets) any corporationinvestments in, partnership or other business organization or division thereof, (ii) sell, lease or otherwise dispose of a Subsidiary or (iii) sell, lease or otherwise dispose of an amount of assets or securities, including IRUs, for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), except for transactions in the ordinary course consistent with past practice;
(d) merge or consolidate with any other Person;
(e) make any investment, whether by purchase of stock or securities, contributions to capital or any property transfer (other than investments in cash or cash equivalents with a maturity of less than 90 days or investments in wholly-owned Subsidiaries made, in each case, in the ordinary course of business consistent with past practice), or purchase for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), any property or assets of any other individual or entity, except for inventory purchased for resale in the ordinary course of business consistent with past practice;
(f) enter into any agreement or arrangement that limits or otherwise restricts the Company or any of the Subsidiaries or any of their respective Affiliates or successors thereto or that by its terms could, after the Effective Time, limit or restrict Parent or the Company or any of their respective Affiliates or any successor thereto, from engaging or competing in any line of business or in any geographic area;
(g) other than in the ordinary course of business consistent with past practice, waive, release or relinquish any material right;
(h) other than in the ordinary course of business consistent with past practice, modify or change in any material respect any existing material license, lease, contract, or other agreement;
(i) enter into any agreements involving aggregate expenditures adopt resolutions providing for or receipts of more than $100,000 individually authorizing a liquidation or $500,000 in the aggregate (a dissolution; or, with respect to (i) any Cost of Services Contract, $1,000,000 and (ii) switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any agreements in the ordinary course of business consistent with past practice, including but not limited to installation fees and customer premise equipment, in each case, associated with new customers and in the ordinary course of business consistent with past practice;
(j) create, incur or assumeauthorize any of, or execute any new guarantee of, any Indebtedness in excess of $100,000 in the aggregate (other than indebtedness for borrowed money owing to W or any of its Affiliates) or prepay any Indebtedness;
(k) other than pursuant to arrangements existing on the date hereof, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for obligations of any other person (other than any Subsidiary) in an amount in excess of $100,000;
(l) make any loans or advances other than (i) loans or advances to wholly-owned Subsidiaries made in the ordinary course of business consistent with past practice and (ii) routine salary, travel and expense advances to Company Employees in the ordinary course of business consistent with past practice;
(i) engage in any transaction, or enter into any contract, agreement or arrangement (other than this Agreement, the Transactions and the incurrence of indebtedness for borrowed money owing to W or any of its Affiliates and transactions pursuant to any such contract, agreement or arrangement entered into on or prior to the date hereof), with any Affiliate, (ii) engage in any transaction, or enter into any contract, agreement or arrangement, with any portfolio company of W that is not on arm's length terms and in the ordinary course of business, or (iii) amend, waive or relinquish any rights relating to any such transaction, contract, agreement or arrangement referred to in clause (i) or (ii) that will remain outstanding after the Closing in accordance with Section 8.05;
(n) authorize any new capital expenditures which, individually, are greater than $100,000 or, in the aggregate, would cause total capital expenditures for year ending December 31, 2003 to exceed $500,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any capital expenditures in the ordinary course of business consistent with past practice;
(o) split, combine or reclassify any shares of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, other than (i) cash dividends and distributions by a wholly-owned Subsidiary to the Company or to a Subsidiary all of the capital stock which is owned directly or indirectly by the Company or (ii) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms; or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its securities or any securities of the Subsidiaries;
(p) (i) increase the compensation or fringe benefits of any Company Employee (except for (x) increases in salary or wages in the ordinary course of business consistent with past practice, (y) the payment of accrued or earned but unpaid bonuses and (z) stay bonuses or similar retention payments in an amount not to exceed $10,000 with respect to any individual payment and $100,000 in the aggregate with respect to all such payments), (ii) grant any severance or termination pay to any Company Employee, (iii) loan or advance any money or other property to any Company Employee (other than routine salary, travel and expense advances to Company Employees in the ordinary course of business and consistent with past practice), (iv) establish, adopt, enter into, amend or terminate any Company Plan, collective bargaining or labor agreement 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 of this Agreement (other than as may be required by the terms of an existing Company Plan or collective bargaining agreement, or as may be required by applicable law or in order to qualify under Sections 401 and 501 of the Code), or (v) grant any equity or equity-based awards, other than in the cases of clauses (i) through (v) pursuant to commitments of the Company or any Subsidiary existing on the date hereof required by contracts set forth in Section 4.08(k) or Section 4.12 of the Company Disclosure Schedule;
(q) pay, discharge or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business of liabilities reflected or reserved against in the consolidated financial statements of the Company referred to in Section 4.07 or liabilities incurred in the ordinary course of business;
(r) make or change any tax election or settle or compromise any income tax liability;
(s) other than in the ordinary course of business consistent with past practice, change any method of accounting, accounting policy or accounting practice, except for any such change required by reason of a concurrent change in GAAP as concurred with by the Company's independent auditors;
(t) fail to maintain insurance coverage at presently existing levels;
(u) make any repayments of principal to W or its Affiliates in respect of any Indebtedness owed to W or its Affiliates or any payment of interest accrued in respect of such Indebtedness;
(v) agree or commit to do any of the foregoing; or
(w) knowingly take or agree or commit to take any action that would make any representation and warranty of W or the Company hereunder inaccurate in any material respect at, or as of any time prior toof, the Closing, except for any representations or warranties that are made as of a specified dateforegoing actions.
Appears in 1 contract
Covenants Relating to Conduct of Business. Except as set forth in Section 7.01. Conduct 5.01 of the Company. From Seller Letter, as otherwise expressly contemplated or permitted by the terms of this Agreement or with the prior written consent of the Purchaser (which consent shall not be unreasonably withheld or delayed), from the date hereof until of this Agreement through (and including) the ClosingClosing Date, the Company Seller shall, and shall cause its subsidiaries to, conduct the Subsidiaries shall conduct their business Business in the ordinary course consistent with past practice in compliance with all applicable laws substantially the same manner as previously conducted and shall use their its commercially reasonable best efforts to preserve keep intact their business organizations and relationships with third parties and to the Business, keep available the services of their present officers the Business’s current officers, employees, contractors and employeesconsultants, preserve the Business’s assets and properties and preserve the Business’s relationships with customers, suppliers, licensors, licensees, distributors and others with whom they deal. Without In addition (and without limiting the generality of the foregoing), from the date hereof until the Closing and except as expressly contemplated by this Agreement or the other Transaction Agreements, as may result from the consummation of the Transactions, as set forth in Section 7.01 5.01 of the Company Disclosure Schedule, Seller Letter or as otherwise consented to in writing by Parent (except if such consent would be inconsistent with applicable law), such consent not to be unreasonably withheld with respect to the granting of IRUs in fiber and/or conduit expressly contemplated or permitted by the Company or terms of this Agreement, from the Subsidiariesdate of this Agreement through (and including) the Closing Date, the Company Seller shall not permit, and shall cause its subsidiaries not to permit, the Subsidiaries not toBusiness to do any of the following without the prior written consent of the Purchaser:
(a) adopt or propose amend the organizational documents of any change in its articles of incorporation, bylaws or other organizational documentsTransferred Entity;
(b) issuedeclare, deliver, sell, pledge set aside or transfer pay any dividend or authorize or propose the issuance, delivery, sale, pledge or transfer of make any shares of its capital stock of any class or any securities convertible into or exercisable for, or any rights, warrants, options or other rights to acquire, any such shares or enter into any agreement with respect distribution to the foregoing holders of equity interests in any Transferred Entity, other than (i) dividends or other distributions paid or payable to another Transferred Entity and (ii) dividends or other distributions made to withdraw cash and cash equivalents of the issuance of Company Common Stock upon exercise of stock options Transferred Entities;
(c) redeem or warrantsotherwise acquire any equity interests in, or conversion of Preferred Stockany other securities of, outstanding on the date hereof in accordance with their present termsa Transferred Entity or issue (i) any equity interests in, or any other security of, a Transferred Entity, (ii) as required by Contracts in effect as of the date of this Agreement that are listed in Section 4.05 of the Company Disclosure Schedule and any option or warrant for, or any security convertible into, or exercisable or exchangeable for, any equity interests in, or any other security of, a Transferred Entity, (iii) “phantom” stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings to which any Transferred Entity is a party or by which any of them is bound (A) obligating any Transferred Entity to issue, deliver or sell, or cause to be issued, delivered or sold, additional units of its equity interests or any security convertible into, or exercisable or exchangeable for, any equity interest in any Transferred Entity or any Transferred Entity Voting Debt, (B) obligating any Transferred Entity to issue, grant, extend or enter into any such option, warrant, security, right, unit, commitment, Contract, arrangement or undertaking or (C) that give any person the issuance of capital stock right to receive any economic benefit or right similar to or derived from the economic benefits and rights accruing to holders of the Company as a dividend in respect of Preferred Stock outstanding on the date hereof in accordance with its present terms;
Transferred Equity Interests or (i) acquire (by merger, consolidation or acquisition of stock or assetsiv) any corporationbond, partnership debenture, note or other business organization indebtedness having the right to vote (or division thereofconvertible into, (iior exercisable or exchangeable for, securities having the right to vote) sell, lease or otherwise dispose on any matters on which the holders of equity interests in a Subsidiary or (iii) sell, lease or otherwise dispose Transferred Entity may vote; Table of an amount of assets or securities, including IRUs, for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), except for transactions in the ordinary course consistent with past practice;Contents
(d) merge split, combine or consolidate with reclassify any of the equity interests in any Transferred Entity, or issue any other Personsecurity in respect of, in lieu of or in substitution for the equity interests in any Transferred Entity;
(e) loan, advance, invest or make a capital contribution to or in any investmentperson, whether by purchase of stock or securities, contributions to capital or any property transfer (other than investments in cash or cash equivalents with a maturity of less than 90 days or investments in wholly-owned Subsidiaries made, in each case, (i) advances in the ordinary course of business consistent with past practice)or (ii) loans, advances, investments or purchase for an amount capital contributions to or in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), any property or assets of any other individual or entity, except for inventory purchased for resale in the ordinary course of business consistent with past practicea Transferred Equity;
(f) enter into any agreement or arrangement that limits or otherwise restricts the Company or any of the Subsidiaries or any of their respective Affiliates or successors thereto or that by its terms could, after the Effective Time, limit or restrict Parent or the Company or any of their respective Affiliates or any successor thereto, from engaging or competing in any line of business or in any geographic area;
(g) other than in the ordinary course of business consistent with past practice, waive, release or relinquish any material right;
(h) other than in the ordinary course of business consistent with past practice, modify or change in any material respect any existing material license, lease, contract, or other agreement;
(i) enter into incur any agreements involving aggregate expenditures indebtedness or receipts of more than $100,000 individually or $500,000 in the aggregate (or, with respect to (i) any Cost of Services Contract, $1,000,000 and (ii) switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any agreements in the ordinary course of business consistent with past practice, including but not limited to installation fees and customer premise equipment, in each case, associated with new customers and in the ordinary course of business consistent with past practice;
(j) create, incur or assume, or execute any new guarantee of, any Indebtedness in excess of $100,000 in the aggregate (other than indebtedness for borrowed money owing to W or any of its Affiliates) or prepay any Indebtedness;
(k) other than pursuant to arrangements existing on the date hereof, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for obligations the indebtedness of any other person (person, other than in the ordinary course of business or (ii) mortgage, pledge or create a security interest in any Subsidiary) in an amount in excess material assets of $100,000the Business, tangible or intangible;
(lg) make repay any loans indebtedness or advances guarantees of any such indebtedness, other than (i) loans or advances to wholly-owned Subsidiaries made in the ordinary course of business consistent with past practice and or (ii) routine salaryas contemplated by Section 5.12;
(h) cancel any material indebtedness other than as contemplated by Section 5.12;
(i) sell, travel transfer or lease any of its assets to, or enter into any agreement or arrangement with, the Seller or any of its affiliates, except for (A) transactions among the Business and expense advances to Company Employees (B) intercompany sales and purchases of goods and services (and payments for such sales and purchases) in the ordinary course of business consistent with past practice;
(ij) engage in any transactionacquire by merging or consolidating with, or enter into by purchasing a substantial portion of the assets of, or by purchasing all of or substantial equity interests in, any contractother person or its business or acquire any material assets, agreement or arrangement (other than this Agreement, the Transactions and the incurrence of indebtedness for borrowed money owing to W or any of its Affiliates and transactions pursuant to any such contract, agreement or arrangement entered into on or prior to the date hereof), with any Affiliate, (iiA) engage in any transaction, or enter into any contract, agreement or arrangement, with any portfolio company of W that is not on arm's length terms and assets acquired in the ordinary course of business, business consistent with past practice or (iiiB) amendassets acquired in compliance with clause (k) of this Section 5.01; Table of Contents
(k) incur any capital expenditure, waive or relinquish any rights relating to any such transaction, contract, agreement or arrangement referred to in clause other than (i) or as contemplated by the Cap Ex Budget and (ii) capital expenditures made to repair, replace or rebuild assets of the Business that will remain outstanding are damaged or destroyed after the Closing in accordance with Section 8.05date of this Agreement;
(nl) authorize sell, lease, license or otherwise dispose of any new capital expenditures which, individually, are greater than $100,000 or, in the aggregate, would cause total capital expenditures for year ending December 31, 2003 to exceed $500,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000)its assets or properties, other than any capital expenditures assets sold, leased, licensed or otherwise disposed of in the ordinary course of business consistent with past practice;
(o) split, combine or reclassify any shares of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, other than (i) cash dividends and distributions by a wholly-owned Subsidiary to the Company or to a Subsidiary all of the capital stock which is owned directly or indirectly by the Company or (ii) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms; or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its securities or any securities of the Subsidiaries;
(p) (i) increase the compensation or fringe benefits of any Company Employee (except for (x) increases in salary or wages in the ordinary course of business consistent with past practice, (y) the payment of accrued or earned but unpaid bonuses and (z) stay bonuses or similar retention payments in an amount not to exceed $10,000 with respect to any individual payment and $100,000 in the aggregate with respect to all such payments), (ii) grant any severance or termination pay to any Company Employee, (iii) loan or advance any money or other property to any Company Employee (other than routine salary, travel and expense advances to Company Employees in the ordinary course of business and consistent with past practice), (iv) establish, adopt, enter into, amend or terminate any Company Plan, collective bargaining or labor agreement 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 of this Agreement (other than as may be required by the terms of an existing Company Plan or collective bargaining agreement, or as may be required by applicable law or in order to qualify under Sections 401 and 501 of the Code), or (v) grant any equity or equity-based awards, other than in the cases of clauses (i) through (v) pursuant to commitments of the Company or any Subsidiary existing on the date hereof required by contracts set forth in Section 4.08(k) or Section 4.12 of the Company Disclosure Schedule;
(qm) pay, discharge discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge discharge, settlement or satisfaction (i) of liabilities or obligations as required by the terms of any applicable Judgment or Law, (ii) of liabilities or obligations constituting indebtedness, (iii) of liabilities or obligations reflected or reserved against on the Balance Sheet or incurred since the date of the Balance Sheet in the ordinary course of business or (iv) of liabilities reflected or reserved against obligations that, in the consolidated financial statements aggregate, do not exceed $500,000;
(n) waive, discharge, settle, release, grant or transfer any claim, right, action or suit of material value;
(o) commence any litigation, other than (i) litigation in connection with the collection of accounts receivable, (ii) litigation to enforce the terms of this Agreement or (iii) litigation as a result of suits, actions or other proceedings commenced against the Business;
(p) enter into or renew (i) any Contract that has a term of more than one year and that is not terminable on not more than 60 days prior notice without the payment of any penalty, (ii) any Contract with a value (net of metal costs) in excess of $3,500,000, (iii) any Contract with respect to any joint venture, partnership or similar arrangement, (iv) any commodity agreement, interest rate agreement or currency agreement, other than commodity agreements entered into to hedge fluctuations in the price of raw materials purchased or to be purchased to fill accepted customer orders or (v) any Contract that, following the Closing, (A) materially restricts the ability of the Company referred Business to compete in Section 4.07 any business or liabilities incurred with any person in any geographic area, (B) provides for exclusivity or any similar requirement, (C) requires the Business to grant “most favored nation” pricing or terms or (D) restricts the ability of the Business to solicit or hire any person;
(q) enter into, amend in any material respect, terminate or renew any lease of real property;
(r) amend, supplement, otherwise modify or terminate any Lease(other than a lease of real property), other than amendments, supplements or other modifications in the ordinary course of business;
(r) make or change any tax election or settle or compromise any income tax liability;
(s) other than in the ordinary course of business consistent with past practice, change any method of accounting, accounting policy or accounting practice, except for any such change required by reason of a concurrent change in GAAP as concurred with by the Company's independent auditors;
(t) fail to maintain insurance coverage at presently existing levels;
(u) make any repayments of principal to W or its Affiliates in respect of any Indebtedness owed to W or its Affiliates or any payment of interest accrued in respect of such Indebtedness;
(v) agree or commit to do any of the foregoing; or
(w) knowingly take or agree or commit to take any action that would make any representation and warranty of W or the Company hereunder inaccurate in any material respect at, or as of any time prior to, the Closing, except for any representations or warranties that are made as of a specified date.
Appears in 1 contract
Samples: Purchase Agreement (Olin Corp)
Covenants Relating to Conduct of Business. Except for matters set forth in Section 7.01. Conduct 6.01 of the Company. From Disclosure Schedule or otherwise permitted, contemplated or required by the terms of this Agreement or except as required by Applicable Law, from the date hereof until of this Agreement to the Closing, the Company and the Subsidiaries Target Companies shall conduct their respective business in the ordinary course of business consistent with past practice in compliance with all applicable laws and shall the Target Companies shall: (i) preserve substantially intact the business organization and assets of the Target Companies; (ii) use their commercially reasonable best efforts to preserve intact their business organizations and relationships with third parties and to keep available the services of their present the current officers and employeesemployees of the Target Companies; (iii) use commercially reasonable efforts to preserve the current relationships of the Target Companies with customers, suppliers and other Persons with which the Target Companies have significant business relations; and (iv) keep and maintain the assets and properties of the Target Companies in good repair and normal operating condition, wear and tear excepted. Without limiting the generality of the foregoing, from the date hereof until the Closing and except as expressly contemplated by this Agreement or the other Transaction Agreements, as may result from the consummation of the Transactions, as otherwise set forth in Section 7.01 6.01 of the Company Disclosure Schedule, or as otherwise consented to in writing permitted, contemplated or required by the terms of this Agreement or as required by Applicable Law, no Target Company shall do any of the following without the prior written consent of Parent (except if such which consent would be inconsistent with applicable law), such consent shall not to be unreasonably withheld with respect to the granting of IRUs in fiber and/or conduit by the Company withheld, conditioned or the Subsidiaries, the Company shall not and shall cause the Subsidiaries not to:delayed):
(a) adopt or propose amend any change in its articles Organizational Document of incorporation, bylaws or other organizational documentsany Target Company;
(b) issue, deliver, sell, pledge pledge, dispose of or transfer or authorize or propose the issuance, delivery, sale, pledge or transfer otherwise subject to any Lien (i) any Equity Securities of any shares of its capital stock of any class or any securities convertible into or exercisable forTarget Company, or any rightsoptions, warrants, options convertible securities or other rights of any kind to acquire, acquire any such shares shares, or enter into any agreement with respect to the foregoing other than ownership interest in any Target Company (i) except for the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof Equity Securities in accordance with their present terms, the terms of the Incentive Plan) or (ii) as required by Contracts in effect as any properties or assets of the date of this Agreement that are listed in Section 4.05 of the Company Disclosure Schedule and (iii) the issuance of capital stock of the Company as a dividend in respect of Preferred Stock outstanding on the date hereof in accordance with its present terms;
(i) acquire (by mergerany Target Company, consolidation or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof, (ii) sell, lease or otherwise dispose of a Subsidiary or (iii) sell, lease or otherwise dispose of an amount of assets or securities, including IRUs, for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), except for transactions in the ordinary course consistent with past practice;
(d) merge or consolidate with any other Person;
(e) make any investment, whether by purchase of stock or securities, contributions to capital or any property transfer (other than investments in cash sales or cash equivalents with a maturity transfers of less than 90 days or investments in wholly-owned Subsidiaries made, in each case, inventory in the ordinary course of business consistent with past practice);
(c) reclassify, combine, split, subdivide or redeem, or purchase for an amount in excess or otherwise acquire, directly or indirectly, any of $100,000 (or, its Equity Securities or other equity or ownership interest or make any other change with respect to switch software upgrades its capital structure;
(d) except for purposes the Merger, adopt a plan of compliance with the Communication Assistance for Law Enforcement Actcomplete or partial liquidation, $1,000,000)dissolution, any property merger, consolidation, restructuring, recapitalization or assets other reorganization of any Target Company, or otherwise alter any Target Company’s corporate structure;
(e) amend, waive, modify or consent to the termination of any Material Contract, or amend, waive, modify or consent to the termination of any Target Company’s rights thereunder, or enter into any Contract that would constitute a Material Contract hereunder other individual or entity, except for inventory purchased for resale than in the ordinary course of business consistent with past practice;
(f) except for any Collateral Agreement to which any Target Company and any Related Party is a party to, enter into any agreement or arrangement that limits or otherwise restricts the Company or Contract with any Related Party of the Subsidiaries or any of their respective Affiliates or successors thereto or that by its terms could, after the Effective Time, limit or restrict Parent or the Company or any of their respective Affiliates or any successor thereto, from engaging or competing in any line of business or in any geographic areaTarget Company;
(g) other than in the ordinary course of business consistent with past practiceestablish, waiveamend or adopt any employee benefit plan, release pay any bonus or relinquish make any material right;
(h) other than in the ordinary course of business consistent with past practice, modify profit sharing or change in any material respect any existing material license, lease, contractsimilar payment to, or increase the amount of the wages, salary commissions, fees, fringe benefits or other agreement;
compensation or remuneration payable to any members of the Board of Directors, its officers or its senior management team (i) enter into any agreements involving aggregate expenditures or receipts which consists of more than $100,000 individually or $500,000 in the aggregate (or, with respect to (i) any Cost of Services Contract, $1,000,000 and (ii) switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000those individuals listed on Schedule 7.02(h)(xii), other than any agreements in the ordinary course of business consistent with past practice, including but not limited to installation fees and customer premise equipment), in each case, associated with new customers and in the ordinary course outside of business consistent with past practice;
(j) create, incur or assume, or execute any new guarantee of, any Indebtedness in excess of $100,000 in the aggregate (other than indebtedness for borrowed money owing to W or any of its Affiliates) or prepay any Indebtedness;
(k) other than pursuant to arrangements existing on the date hereof, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for obligations of any other person (other than any Subsidiary) in an amount in excess of $100,000;
(l) make any loans or advances other than (i) loans or advances to wholly-owned Subsidiaries made in the ordinary course of business consistent with past practice and (ii) routine salary, travel and expense advances to Company Employees in the ordinary course of business consistent with past practice;
(i) engage in any transaction, or enter into any contract, agreement or arrangement (other than this Agreement, the Transactions and the incurrence of indebtedness for borrowed money owing to W or any of its Affiliates and transactions pursuant to any such contract, agreement or arrangement entered into on or prior to the date hereof), with any Affiliate, (ii) engage in any transaction, or enter into any contract, agreement or arrangement, with any portfolio company of W that is not on arm's length terms and in the ordinary course of business, or (iii) amend, waive or relinquish any rights relating to any such transaction, contract, agreement or arrangement referred to in clause (i) or (ii) that will remain outstanding after the Closing in accordance with Section 8.05;
(n) authorize any new capital expenditures which, individually, are greater than $100,000 or, in the aggregate, would cause total capital expenditures for year ending December 31, 2003 to exceed $500,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any capital expenditures in the ordinary course of business consistent with past practice;
(o) split, combine or reclassify any shares of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, other than (i) cash dividends and distributions by a wholly-owned Subsidiary to the Company or to a Subsidiary all of the capital stock which is owned directly or indirectly by the Company or (ii) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms; or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its securities or any securities of the Subsidiaries;
(p) (i) increase the compensation or fringe benefits of any Company Employee (except for (x) increases in salary or wages in the ordinary course of business consistent with past practice, (y) the payment of accrued or earned but unpaid bonuses and (z) stay bonuses or similar retention payments in an amount not to exceed $10,000 with respect to any individual payment and $100,000 in the aggregate with respect to all such payments), (ii) grant any severance or termination pay to any Company Employee, (iii) loan or advance any money or other property to any Company Employee (other than routine salary, travel and expense advances to Company Employees in the ordinary course of business and consistent with past practice), (iv) establish, adopt, enter into, amend or terminate any Company Plan, collective bargaining or labor agreement 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 of this Agreement (other than as may be required by the terms of an existing Company Plan or collective bargaining agreement, or as may be required by applicable law or in order to qualify under Sections 401 and 501 of the Code), or (v) grant any equity or equity-based awards, other than in the cases of clauses (i) through (v) pursuant to commitments of the Company or any Subsidiary existing on the date hereof required by contracts set forth in Section 4.08(k) or Section 4.12 of the Company Disclosure Schedule;
(q) pay, discharge or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business of liabilities reflected or reserved against in the consolidated financial statements of the Company referred to in Section 4.07 or liabilities incurred in the ordinary course of business;
(rh) make incur or change assume any tax election liabilities, obligations or settle Indebtedness for borrowed money or compromise guarantee any income tax liability;
(s) such liabilities, obligations or Indebtedness in excess of $500,000, other than liabilities incurred in the ordinary course of business consistent for the purchase of finished goods or raw materials;
(i) permit or allow any of their respective material assets to become subjected to any Lien (other than Permitted Liens);
(j) make or incur capital expenditures in excess of $500,000 in the aggregate;
(k) purchase or enter into any lease of real property;
(l) abandon, fail to maintain or allow to lapse any Company Intellectual Property;
(m) grant any license or sublicense of any of any Intellectual Property other than non-exclusive licenses granted by a Target Company to customers in the ordinary course of business pursuant to the standard forms of the Target Companies;
(n) terminate or allow to be terminated any material insurance policy in effect as of the date of this Agreement;
(o) form any Subsidiary or acquire the equity of any Person;
(p) other than the settlement of disputes relating to accounts payable or accounts receivable in the ordinary course of business, commence or settle any Proceeding that would involve the payment of $100,000 or more or would otherwise result in the incurrence by the Company of fees, costs and expenses in an aggregate amount of $500,000 or more;
(q) make or rescind any election relating to Taxes except for those elections relating to Taxes that were inconsistent with past practice, settle or compromise any claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to Taxes, make any change to any of its methods of accounting or methods of reporting income or deductions for Tax or accounting practice or policy, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment, file any amended Tax Return, change any method accounting period, or surrender any right to claim a refund of accounting, accounting policy or accounting practice, except for any such change required by reason of a concurrent change in GAAP as concurred with by the Company's independent auditors;
(t) fail to maintain insurance coverage at presently existing levels;
(u) make any repayments of principal to W or its Affiliates in respect of any Indebtedness owed to W or its Affiliates or any payment of interest accrued in respect of such Indebtedness;
(v) agree or commit to do any of the foregoingTaxes; or
(wr) knowingly take agree, commit or agree offer (in writing or commit otherwise) to take any action that would make any representation and warranty of W or the Company hereunder inaccurate in any material respect at, or as of any time prior to, the Closing, except for any representations or warranties that are made as of a specified dateforegoing actions.
Appears in 1 contract
Samples: Merger Agreement (Compass Group Diversified Holdings LLC)
Covenants Relating to Conduct of Business. Section 7.014.1. Conduct of Business of Company Pending the CompanyMerger. From Company covenants and agrees that, during the period from the date hereof until to the ClosingEffective Time and except as otherwise agreed to in writing by Purchaser or as expressly contemplated by this Agreement, the businesses of Company and the its Subsidiaries shall conduct their business in be conducted only in, and Company and its Subsidiaries shall not take any action except in, the ordinary course of business and in a manner consistent with past practice and in compliance with all applicable laws laws; and Company and its Subsidiaries, except as expressly contemplated by this Agreement, shall each use their its commercially reasonable best efforts to preserve substantially intact their the business organizations organization of Company and relationships with third parties and its Subsidiaries, to keep available the services of their the present officers officers, employees and employees. Without limiting consultants of Company and its Subsidiaries and to preserve the generality present relationships of Company and its Subsidiaries with such of the foregoingcustomers, from suppliers, licensors, licensees, or distributors with which Company or any of its Subsidiaries has significant business relations. By way of amplification and not limitation, without the prior written consent of Purchaser (which shall not be unreasonably withheld or delayed) neither Company nor any of its Subsidiaries shall, between the date hereof until the Closing and except as expressly contemplated by of this Agreement or and the other Transaction AgreementsEffective Time, as may result from the consummation of the Transactions, except as set forth in Section 7.01 4.1 of the Company Disclosure Schedule, directly or as otherwise consented indirectly do, or propose or commit to in writing by Parent (except if such consent would be inconsistent with applicable law)do, such consent not to be unreasonably withheld with respect to any of the granting of IRUs in fiber and/or conduit by the Company or the Subsidiaries, the Company shall not and shall cause the Subsidiaries not tofollowing:
(a) adopt or propose any change in Amend its articles of incorporation, bylaws incorporation or other by-laws or equivalent organizational documents;
(b) issueIssue, deliver, sell, pledge pledge, dispose of or transfer encumber, or authorize or propose commit to the issuance, delivery, sale, pledge pledge, disposition or transfer of encumbrance of, any shares of its capital stock of any class or any securities convertible into or exercisable forclass, or any rightsoptions, warrants, options convertible securities or other rights of any kind to acquireacquire any shares of capital stock, or any such shares other ownership interest (including but not limited to stock appreciation rights or enter into phantom stock), of Company or any agreement with respect to the foregoing other than of its Subsidiaries, except for (i) the issuance of Company Common Stock upon exercise of stock securities issuable pursuant to options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms, (ii) as required by Contracts in effect as of the date hereof under the Option Agreement or any Benefit Plans of this Agreement that are listed Company (including the Company Employee Stock Purchase Plan ("Company ESPP")) and (ii) grants of equity or equity-based awards in accordance with Section 4.05 4.1(b) of the Company Disclosure Schedule and Schedule.
(iiic) the issuance Declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock stock, other than dividends payable by a directly or indirectly wholly-owned Subsidiary of the Company as a dividend in respect to Company or another directly or indirectly wholly-owned Subsidiary of Preferred Stock outstanding on the date hereof in accordance with its present termsCompany;
(id) acquire Reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, stock options or debt securities;
(e) Acquire (by merger, consolidation or acquisition of stock or assets) any corporation, partnership or other business organization or division thereofor line of business;
(f) Modify its current investment policies or investment practices in any material respect except to accommodate changes in applicable law;
(g) Transfer, (ii) selllease, lease mortgage, or otherwise dispose of a Subsidiary or (iii) sell, lease or otherwise dispose subject to any Lien any of an amount of assets or securitiesits assets, including IRUscapital stock of Subsidiaries, for an amount with a fair market value in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, 10 million individually or $1,000,000), except for transactions 25 million in the ordinary course consistent with past practice;
aggregate (dexcept (i) merge or consolidate with any other Person;
by incurring Permitted Liens; (eii) make any investment, whether by purchase of stock or securities, contributions to capital or any property transfer (other than investments in cash or cash equivalents with a maturity of less than 90 days or investments in wholly-owned Subsidiaries made, in each case, in the ordinary course of business consistent with past practice; and (iii) equipment and property no longer used in the operation of Company's or any Subsidiaries' business);
(I) Repay or retire any indebtedness for borrowed money or repurchase or redeem any debt securities, except (x) upon the maturity date of such indebtedness or as otherwise required by the terms of such indebtedness or securities or (y) as permitted by Section 5.16, (II) incur any indebtedness for borrowed money or issue any debt securities or (III) assume, guarantee or endorse, or purchase for otherwise as an amount accommodation become responsible for, the obligations of any person, or make any loans, advances or capital contributions to, or investments in, any other person in excess of $100,000 5 million individually or $10 million in the aggregate (it being understood that trade payables, ordinary course business funding mechanisms between Company and its customers and providers and guarantees of indebtedness by the Company and its Subsidiaries to the Company and its Subsidiaries shall not be considered indebtedness for purposes of this provision);
(i) Enter into or amend any Material Contract, any other contract or agreement (with "other contract or agreement" being defined for purposes of this subsection as a contract or agreement which involves Company incurring a liability in excess of $10 million individually or $25 million in the aggregate and which is not terminable by Company without penalty upon one year or less notice (other than (x) contracts or amendments issued or entered into in the ordinary course of business with customers or providers of Company or its Subsidiaries, (y) customer agreements that are not terminable within one year solely as a result of HIPAA or other statutory or regulatory requirements or (z) as required by law)) or, except for any agreement in the ordinary course of business and that is not inconsistent with Section 5.16, agreement with an affiliate of Company;
(j) Except (A) to the extent required under this Agreement or as set forth on Section 4.1(j) of the Company Disclosure Schedule, (B) pursuant to applicable law or (C) pursuant to existing obligations under the Company Plans or collective bargaining agreements, increase the compensation or fringe benefits of any of its directors, officers or employees, except for increases in salary or wages of officers and employees of Company or its Subsidiaries in the ordinary course of business in accordance with past practice, or grant any severance or termination pay not currently required to be paid under existing severance plans or enter into, or amend, any employment, change-in-control or similar arrangement, consulting or severance agreement or arrangement (except, other than with respect to switch software upgrades for purposes of compliance the sixteen Company executives with the Communication Assistance for Law Enforcement Actexecutive continuity agreements, $1,000,000), any property or assets of any other individual or entity, except for inventory purchased for resale pursuant to separation agreements and severance agreements entered into in the ordinary course of business consistent with past practice;
(f) enter into with any agreement present or arrangement that limits former director, officer or otherwise restricts the other employee of Company or any of the Subsidiaries or any of their respective Affiliates or successors thereto or that by its terms could, after the Effective Time, limit or restrict Parent or the Company or any of their respective Affiliates or any successor thereto, from engaging or competing in any line of business or in any geographic area;
(g) other than in the ordinary course of business consistent with past practice, waive, release or relinquish any material right;
(h) other than in the ordinary course of business consistent with past practice, modify or change in any material respect any existing material license, lease, contractSubsidiaries, or other agreement;
(i) establish, adopt, enter into or amend or terminate any agreements involving aggregate expenditures collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, welfare, severance or receipts other plan, agreement, trust, fund, policy or arrangement for the benefit of more than $100,000 individually any directors, officers or $500,000 in the aggregate (or, with respect to (i) any Cost of Services Contract, $1,000,000 and (ii) switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any agreements in the ordinary course of business consistent with past practice, including but not limited to installation fees and customer premise equipment, in each case, associated with new customers and in the ordinary course of business consistent with past practice;
(j) create, incur or assume, or execute any new guarantee of, any Indebtedness in excess of $100,000 in the aggregate (other than indebtedness for borrowed money owing to W or any of its Affiliates) or prepay any Indebtednessemployees;
(k) other than pursuant Except as may be required as a result of a change in law or in generally accepted accounting or actuarial principles, make any material change to arrangements existing on the date hereof, assume, guarantee, endorse accounting practices or otherwise become liable principles or responsible (whether directly, contingently reserving or otherwise) for obligations of any other person (other than any Subsidiary) in an amount in excess of $100,000underwriting practices or principles used by it;
(l) make Knowingly take, or knowingly permit any loans of its Subsidiaries to take, any action that would prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(m) Settle or advances other than compromise any pending or threatened suit, action or claim involving a payment by Company or its Subsidiaries in excess of $1,000,0000 or agree to any settlement or compromise in respect thereof, if such settlement or compromise would be reasonably likely to be (i) loans a settlement or advances compromise which is the first settlement or compromise effected by the Company or its Subsidiaries with regards to wholly-owned Subsidiaries made in the ordinary course any particular type of business consistent with past practice and conduct or complaint or (ii) routine salary, travel and expense advances to a settlement or compromise which would be substantially different than prior settlements of the Company Employees in the ordinary course of business consistent or its Subsidiaries with past practice;
(i) engage in any transaction, or enter into any contract, agreement or arrangement (other than this Agreement, the Transactions and the incurrence of indebtedness for borrowed money owing to W or any of its Affiliates and transactions pursuant regards to any such contractparticular type of conduct or complaint, agreement or arrangement entered into on or prior to which in either the date hereof), with any Affiliate, (ii) engage in any transaction, or enter into any contract, agreement or arrangement, with any portfolio company case of W that is not on arm's length terms and in the ordinary course of business, or (iii) amend, waive or relinquish any rights relating to any such transaction, contract, agreement or arrangement referred to in clause (i) or (ii) would create an adverse precedent for claims, actions or proceedings that will remain outstanding after the Closing in accordance with Section 8.05would be material to Company and its Subsidiaries, taken as whole;
(n) authorize any new capital expenditures whichAdopt a plan of complete or partial liquidation, individuallydissolution, are greater than $100,000 orrestructuring, in the aggregate, would cause total capital expenditures for year ending December 31, 2003 to exceed $500,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any capital expenditures in the ordinary course of business consistent with past practice;
(o) split, combine or reclassify any shares of its capital stock; declare, set aside or pay any dividend recapitalization or other distribution (whether in cash, stock or property or any combination thereof) in respect reorganization of its capital stock, other than (i) cash dividends and distributions by a wholly-owned Subsidiary to the Company or to a Subsidiary all of the capital stock which is owned directly or indirectly by the Company or (ii) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms; or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its securities or any securities of the Subsidiaries;
(p) (i) increase the compensation or fringe benefits of any Company Employee (except for (x) increases in salary or wages in the ordinary course of business consistent with past practice, (y) the payment of accrued or earned but unpaid bonuses and (z) stay bonuses or similar retention payments in an amount not to exceed $10,000 with respect to any individual payment and $100,000 in the aggregate with respect to all such payments), (ii) grant any severance or termination pay to any Company Employee, (iii) loan or advance any money or other property to any Company Employee (other than routine salary, travel and expense advances to Company Employees in the ordinary course of business and consistent with past practice), (iv) establish, adopt, enter into, amend or terminate any Company Plan, collective bargaining or labor agreement 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 of this Agreement (other than as may be required by the terms of an existing Company Plan or collective bargaining agreement, or as may be required by applicable law or in order to qualify under Sections 401 and 501 of the Code), or (v) grant any equity or equity-based awards, other than in the cases of clauses (i) through (v) pursuant to commitments of the Company or any Subsidiary existing on the date hereof required by contracts set forth in Section 4.08(k) or Section 4.12 of the Company Disclosure Schedule;
(q) pay, discharge or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business of liabilities reflected or reserved against in the consolidated financial statements of the Company referred to in Section 4.07 or liabilities incurred in the ordinary course of business;
(r) make or change any tax election or settle or compromise any income tax liability;
(s) other than in the ordinary course of business consistent with past practice, change any method of accounting, accounting policy or accounting practice, except for any such change required by reason of a concurrent change in GAAP as concurred with by the Company's independent auditors;
(t) fail to maintain insurance coverage at presently existing levels;
(u) make any repayments of principal to W or its Affiliates in respect of any Indebtedness owed to W or its Affiliates or any payment of interest accrued in respect of such Indebtedness;
(v) agree or commit to do any of the foregoing; or
(w) knowingly take or agree or commit to take any action that would make any representation and warranty of W or the Company hereunder inaccurate in any material respect at, or as of any time prior to, the Closing, except for any representations or warranties that are made as of a specified date.
Appears in 1 contract
Samples: Merger Agreement (Anthem Inc)
Covenants Relating to Conduct of Business. Section 7.01. 6.1 Conduct of Business by the CompanyCompany Pending the Merger. From ----------------------------------------------------- Except as otherwise expressly contemplated by this Agreement, during the period from the date hereof until of this Agreement through the ClosingEffective Time, the Company shall, and shall cause its Subsidiaries to, in all material respects carry on their respective businesses in, and not enter into any material transaction other than in accordance with, the Subsidiaries shall conduct their business in the regular and ordinary course and, to the extent consistent with past practice in compliance with all applicable laws and shall therewith, use their its reasonable best efforts to preserve intact their current business organizations and relationships with third parties and to organizations, keep available the services of their present current officers and employeesemployees and preserve their relationships with customers, suppliers and others having business dealings with them. Without limiting the generality of the foregoing, from the date hereof until the Closing and and, except as otherwise expressly contemplated by this Agreement Agreement, the Company shall not, and shall not permit any of its Subsidiaries to, without the prior written consent of Parent:
(a) (x) declare, set aside or the pay any dividends on, or make any other Transaction Agreementsactual, as may result from the consummation constructive or deemed distributions in respect of, any of its capital stock, or otherwise make any payments to stockholders of the TransactionsCompany in their capacity as such, other than dividends payable to the Company declared by any of the Company's Subsidiaries, (y) 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 (z) except as set forth in Section 7.01 4.2 of the Company Disclosure ScheduleLetter, purchase, redeem or as otherwise consented to in writing by Parent (except if such consent would be inconsistent with applicable law), such consent not to be unreasonably withheld with respect to the granting acquire any shares of IRUs in fiber and/or conduit by capital stock of the Company or the Subsidiariesany of its Subsidiaries or any other securities thereof or any rights, the Company shall not and shall cause the Subsidiaries not to:
(a) adopt warrants or propose options to acquire any change in its articles of incorporation, bylaws such shares or other organizational documentssecurities;
(b) issue, deliver, sell, pledge pledge, dispose of or transfer or authorize or propose the issuance, delivery, sale, pledge or transfer of otherwise encumber any shares of its capital stock of stock, any class other voting securities or equity equivalent or any securities convertible into or exercisable forinto, or any rights, warrants, warrants or options or other rights to acquire, any such shares shares, voting securities or enter into any agreement with respect to convertible securities or equity equivalent (other than, in the foregoing other than (i) case of the Company, the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on during the date hereof in accordance with their present terms, (ii) as required by Contracts in effect as of period from the date of this Agreement that are listed through the Effective Time upon the exercise of stock options issued pursuant to the Stock Plans and outstanding (as set forth in Section 4.05 of the Company Disclosure Schedule and ------- 4
(iiic) the issuance of capital stock of the Company as a dividend in respect of Preferred Stock outstanding on the date hereof in accordance with amend its present termscharter or bylaws;
(id) acquire (or agree to acquire by mergermerging or consolidating with, consolidation or acquisition by purchasing a substantial portion of stock the assets of or assets) equity in, or by any other manner, any business or any corporation, partnership partnership, limited liability Company, association or other business organization or division thereofthereof or otherwise acquire or agree to acquire any assets, in each case that are material, individually or in the aggregate, to the Company and its Subsidiaries, taken as a whole;
(iie) sell, lease or otherwise dispose of a Subsidiary or (iii) agree to sell, lease or otherwise dispose of, any of an amount of its assets that are material, individually or securitiesin the aggregate, including IRUsto the Company and its Subsidiaries, for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000)taken as a whole, except for transactions sales of inventory or other assets in the ordinary course consistent with past practiceof business;
(df) merge incur any indebtedness for borrowed money or consolidate with guarantee any other Person;
(e) make such indebtedness or issue or sell any investmentdebt securities or guarantee any debt securities of others, whether by purchase of stock except for borrowings or securities, contributions to capital or any property transfer (other than investments in cash or cash equivalents with a maturity of less than 90 days or investments in wholly-owned Subsidiaries made, in each case, guarantees incurred in the ordinary course of business consistent with past practice), or, except as set forth in Section 4.2 of the Company Disclosure Letter, make any loans, advances or capital contributions to, or purchase for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000)investments in, any property other person, other than to the Company or assets any wholly owned Subsidiary of any the Company and other individual or entity, except for inventory purchased for resale than in the ordinary course of business consistent with past practice;
(fg) alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any Subsidiary of the Company;
(h) enter into or adopt or amend any existing severance plan, severance agreement or severance arrangement that limits or otherwise restricts the Company or any of the Subsidiaries or any of their respective Affiliates or successors thereto or that by its terms couldor, after the Effective Time, limit or restrict Parent or the Company or any of their respective Affiliates or any successor thereto, from engaging or competing in any line of business or in any geographic area;
(g) other than in the ordinary course of business, enter into or amend any Company Benefit Plan (including without limitation, the Stock Plans) or employment or consulting agreement except, (i) with respect to employees that are not executive officers or directors, compensation increases associated with promotions and regular reviews in the ordinary course of business consistent with past practicepractices, waive, release or relinquish (ii) agreements with consultants of the Company providing for payments by the Company of less than $20,000 to any material right;
(h) other individual consultant and less than $75,000 in the ordinary course aggregate to all consultants, and (iii) after December 31, 1995, increases of business consistent with past practice, modify or change in any material respect any existing material license, lease, contract, or other agreementnot more than 10% to the base salary of executive officers of the Company;
(i) enter into waive, amend or allow to lapse any agreements involving aggregate expenditures term or receipts condition of any confidentiality or "standstill" agreement to which the Company is a party;
(j) settle or compromise any suit, proceeding or claim or threatened suit, proceeding or claim for an amount that is more than $100,000 individually 20,000 in the case of any individual suit, proceeding or claim or $500,000 100,000 for all suits, proceedings or claims;
(k) knowingly violate or fail to perform any obligation or duty imposed upon it by any applicable federal, state or local law, rule, regulation, guideline or ordinance;
(l) change its credit policies, procedures or practices, or commit or renew a prior commitment to lend money, purchase assets, issue a letter of credit, guarantee or similar instrument or otherwise extend credit to any person in the aggregate (or, with respect to (i) any Cost of Services Contract, $1,000,000 and (ii) switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any agreements a manner not in the ordinary course of business consistent with past practice, including but not limited to installation fees and customer premise equipment, or in each case, associated with new customers and in the ordinary course of business consistent a manner inconsistent with past practice;
(ji) createmodify, incur amend or assumeterminate any contract, (ii) waive, release, relinquish or execute assign any new guarantee ofcontract (including any insurance policy) or other right or claim, (iii) prepay any Indebtedness in excess of $100,000 in the aggregate indebtedness or (iv) cancel or forgive any indebtedness owed to it, other than indebtedness for borrowed money owing to W or any of its Affiliates) or prepay any Indebtedness;
(k) other than pursuant to arrangements existing on the date hereof, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for obligations of any other person (other than any Subsidiary) in an amount each case in excess of $100,000;
(l) make any loans or advances other than (i) loans or advances to wholly-owned Subsidiaries made a manner in the ordinary course of business consistent with past practice and (ii) routine salary, travel and expense advances to Company Employees in the ordinary course of business consistent with past practice;
(i) engage in any transaction, or enter into any contract, agreement or arrangement (other than this Agreement, the Transactions and the incurrence of indebtedness for borrowed money owing to W or any of its Affiliates and transactions pursuant to any such contract, agreement or arrangement entered into on or prior which is not material to the date hereof), with any Affiliate, (ii) engage in any transaction, or enter into any contract, agreement or arrangement, with any portfolio company business of W that is not on arm's length terms the Company and in the ordinary course of business, or (iii) amend, waive or relinquish any rights relating to any such transaction, contract, agreement or arrangement referred to in clause (i) or (ii) that will remain outstanding after the Closing in accordance with Section 8.05its Subsidiaries;
(n) authorize make any new capital expenditures which, individually, are greater than $100,000 orTax election or change any method of accounting for Tax purposes, in each case except to the aggregateextent required by law, would cause total capital expenditures for year ending December 31, 2003 to exceed $500,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than or settle or compromise any capital expenditures in the ordinary course of business consistent with past practiceTax liability;
(o) split, combine or reclassify change any shares of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, other than (i) cash dividends and distributions by a wholly-owned Subsidiary to the Company or to a Subsidiary all of the capital stock which is owned directly accounting principles or indirectly practices used by it except as required by the Company SEC or (ii) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms; or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its securities or any securities of the SubsidiariesFinancial Accounting Standards Board;
(p) (i) increase the compensation or fringe benefits of enter into any Company Employee (except for (x) increases in salary or wages in the ordinary course of business consistent with past practice, (y) the payment of accrued or earned but unpaid bonuses research and (z) stay bonuses or similar retention payments in an amount not to exceed $10,000 with respect to any individual payment and $100,000 in the aggregate with respect to all such payments)development contract, (ii) grant enter into any severance production contract or termination pay to any Company Employee, "tolling agreement," or (iii) loan grant any license relating to its Intellectual Property, except as required by existing agreements of the Company, copies of which have been provided to Parent; or
(q) authorize, recommend, announce, propose or advance agree to take any money or other property to any Company Employee (other than routine salary, travel and expense advances to Company Employees in of the ordinary course of business and consistent with past practice), (iv) establish, adopt, enter into, amend or terminate any Company Plan, collective bargaining or labor agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Plan if it were in existence as of foregoing actions. During the period from the date of this Agreement through the Effective Time, (other than i) as reasonably requested by Parent, the Company shall confer on a regular basis with one or more representatives of Parent with respect to material operational matters; (ii) the Company shall, within 25 days following each fiscal month, deliver to Parent financial statements, including an income statement and balance sheet for such month; and (iii) upon the knowledge of the Company of any Material Adverse Change (as hereinafter defined) in the Company, any material litigation or material governmental complaints, investigations or hearings (or communications indicating that the same may be required by the terms of an existing Company Plan or collective bargaining agreement, or as may be required by applicable law or in order to qualify under Sections 401 and 501 of the Codecontemplated), or (v) grant any equity or equity-based awards, other than in the cases of clauses (i) through (v) pursuant to commitments of the Company or any Subsidiary existing on the date hereof required by contracts set forth in Section 4.08(k) or Section 4.12 of the Company Disclosure Schedule;
(q) pay, discharge or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business of liabilities reflected or reserved against in the consolidated financial statements of the Company referred to in Section 4.07 or liabilities incurred in the ordinary course of business;
(r) make or change any tax election or settle or compromise any income tax liability;
(s) other than in the ordinary course of business consistent with past practice, change any method of accounting, accounting policy or accounting practice, except for any such change required by reason of a concurrent change in GAAP as concurred with by the Company's independent auditors;
(t) fail to maintain insurance coverage at presently existing levels;
(u) make any repayments of principal to W or its Affiliates in respect of any Indebtedness owed to W or its Affiliates or any payment of interest accrued in respect of such Indebtedness;
(v) agree or commit to do any of the foregoing; or
(w) knowingly take or agree or commit to take any action that would make any representation and warranty of W or the Company hereunder inaccurate breach in any material respect at, or as of any time prior torepresentation or warranty contained herein, the Closing, except for any representations or warranties that are made as of a specified dateCompany shall promptly notify Parent thereof.
Appears in 1 contract
Samples: Merger Agreement (Syntro Corp /De/)
Covenants Relating to Conduct of Business. Section 7.01. 5.1 Conduct of Business by the Company. From Except for matters set forth in Section 5.1 of the Company Disclosure Schedule or otherwise expressly contemplated by this Agreement or as required by applicable Law, from the date hereof until of this Agreement to the ClosingEffective Time, the Company will, and the will cause each of its Subsidiaries shall to, conduct their its business in the ordinary course consistent with past practice in compliance with all applicable laws and shall and, to the extent consistent therewith, use their commercially reasonable best efforts to preserve intact their its current business organizations and relationships with third parties and to organization, keep available the services of their present its current officers and employeesemployees and maintain its relationships with customers, suppliers, licensors and others having business dealings with them. Without In addition, and without limiting the generality of the foregoing, from except for matters set forth in Section 5.1 of the date hereof until the Closing and except as Company Disclosure Schedule or otherwise expressly contemplated by this Agreement or the other Transaction Agreementsas required by applicable Law, as may result from the consummation date of the Transactions, as set forth in Section 7.01 of the Company Disclosure Schedule, or as otherwise consented to in writing by Parent (except if such consent would be inconsistent with applicable law), such consent not to be unreasonably withheld with respect this Agreement to the granting of IRUs in fiber and/or conduit by the Company or the SubsidiariesEffective Time, the Company shall will not, and will not and shall cause permit any of its Subsidiaries to, do any of the Subsidiaries not tofollowing without the prior written consent of Parent:
(a) adopt (i) declare, set aside or propose pay any change dividends on, or make any other distributions in respect of, any of its articles capital stock, other than dividends and distributions by a direct or indirect wholly owned Subsidiary of incorporationthe Company to its parent company, bylaws (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 organizational documentssecurities;
(b) issue, deliver, sell, pledge sell or transfer or authorize or propose the issuance, delivery, sale, pledge or transfer of grant (i) any shares of its capital stock of any class or other voting securities, (ii) any securities convertible into or exercisable exchangeable for, or any rightsoptions, warrants, options warrants or other rights to acquire, any such shares shares, voting securities or enter into convertible or exchangeable securities, or (iii) any agreement with respect to the foregoing “phantom” stock, “phantom” stock rights, stock appreciation rights or stock-based performance units, other than (iA) the issuance of Company Common Stock upon Shares pursuant to the exercise or settlement of stock options or warrants, or conversion of Preferred Stock, outstanding on any equity award granted prior to the date hereof in accordance with their present termshereof, (ii) as required by Contracts in effect as of the date of this Agreement that are listed in Section 4.05 of the Company Disclosure Schedule and (iiiB) the issuance of capital stock of the Company as a dividend in respect of Preferred Stock outstanding on the date hereof in accordance with its present terms;
(i) acquire (by merger, consolidation or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof, (ii) sell, lease or otherwise dispose of a Subsidiary or (iii) sell, lease or otherwise dispose of an amount of assets or securities, including IRUs, for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), except for transactions in the ordinary course consistent with past practice;
(d) merge or consolidate with any other Person;
(e) make any investment, whether by purchase of stock or securities, contributions to capital or any property transfer (other than investments in cash or cash equivalents with a maturity of less than 90 days or investments in wholly-owned Subsidiaries made, in each case, annual equity awards in the ordinary course of business consistent with past practice), and (C) the issuance of equity awards to employees of the Company or its Subsidiaries in amounts and on terms set forth in the Company Disclosure Schedule;
(c) amend the Company Charter Documents or other comparable charter or organizational documents of any Subsidiary of the Company;
(d) acquire or agree to acquire (i) any Person or business, whether by merging or consolidating with, or purchase for by purchasing a substantial equity interest in or portion of the assets of, such Person or business, or otherwise or (ii) any assets that are material, individually or in the aggregate, to the Company and its Subsidiaries, taken as a whole, other than in connection with capital expenditures permitted by Section 5.1(i);
(e) (i) grant or announce any incentive awards or any increase in compensation, severance or termination pay to any employee, officer, director or other service provider of the Company or its Subsidiaries, other than (A) to employees or other service providers with an amount in excess of annual base salary less than $100,000 in the ordinary course of business consistent with past practice, excluding any employees or other service providers (orwho are not also officers or directors of the Company or family members thereof) whose employment or other engagement is terminated prior to Closing or (B) to the extent required under existing Company Employee Plans or existing Company Employment Agreements or by applicable Law, (ii) hire any new employees or officers, except in the ordinary course of business consistent with past practice with respect to switch software upgrades for purposes employees or officers with an annual base salary and incentive compensation opportunity not to exceed $100,000 per employee or officer, (iii) establish, adopt, enter into, amend, modify or terminate in any material respect any collective bargaining agreement or Company Employee Plan, or (iv) take any action to accelerate any rights or benefits, pay or agree to pay any pension, retirement allowance, termination or severance pay, bonus or other employee benefit, or make any material determinations not in the ordinary course of compliance business consistent with prior practice under any collective bargaining agreement or Company Employee Plan;
(f) make any change in accounting methods, principles or practices materially affecting the Communication Assistance for Law Enforcement Actreported consolidated assets, $1,000,000liabilities or results of operations of the Company, except insofar as may have been required by a change in GAAP;
(g) sell, lease (as lessor), license or otherwise dispose of or subject to any property Lien (other than any Permitted Lien) any properties or assets of any other individual or entityassets, except for inventory purchased for resale (i) licenses of or other grants of rights to use Intellectual Property in the ordinary course of business consistent with past practice (ii) pursuant to Company Material Contracts in force on the date of this Agreement and listed on Section 5.1(g) of the Company Disclosure Schedule, and (iii) sales of excess or obsolete assets in the ordinary course of business consistent with past practice;
(fh) enter into except for (i) intercompany loans between the Company and any agreement of its Subsidiaries or arrangement that limits between any Company Subsidiaries and (ii) extensions or otherwise restricts renewals of the Company’s existing credit facility with Citizens Bank, National Association (as agent), 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 Subsidiaries or economic effect of any of their respective Affiliates the foregoing;
(i) make or successors thereto agree to make any new capital expenditure or that by its terms could, after expenditures in excess of $200,000 (other than in the Effective Time, limit or restrict Parent or the Company or any of their respective Affiliates or any successor thereto, from engaging or competing in any line ordinary course of business or in any geographic areacapital expenditures that are contemplated by the Company’s annual budget for fiscal year 2018 and capital expenditure plan for fiscal year 2018 which have been made available to Parent or as listed on Section 5.1(i) of the Company Disclosure Schedule);
(gj) other than with respect to any Company Intellectual Property, except in the ordinary course of business consistent with past practice, waiveand except for agreements between or among the Company and its Subsidiaries, release (A) encumber, impair, abandon, fail to maintain, transfer, license to any Person (including through an agreement with a reseller, distributor, franchisee or relinquish any material right;
(h) other than in the ordinary course of business consistent with past practice, modify or change in any material respect any existing material license, lease, contractsimilar channel partner), or other agreement;
(i) enter into otherwise dispose of any agreements involving aggregate expenditures right, title or receipts interest of more than $100,000 individually or $500,000 in the aggregate (or, with respect to (i) any Cost of Services Contract, $1,000,000 and (ii) switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any agreements in the ordinary course of business consistent with past practice, including but not limited to installation fees and customer premise equipment, in each case, associated with new customers and in the ordinary course of business consistent with past practice;
(j) create, incur or assume, or execute any new guarantee of, any Indebtedness in excess of $100,000 in the aggregate (other than indebtedness for borrowed money owing to W Company or any of its AffiliatesSubsidiaries in any Company Intellectual Property or Company Software Products or (B) divulge, furnish to or prepay make accessible any Indebtednessmaterial confidential or other non-public information in which the Company or any of its Subsidiaries has trade secret or equivalent rights within the Company Intellectual Property to any Person who is not subject to an enforceable written agreement to maintain the confidentiality of such confidential or other non-public information;
(k) other than pursuant to arrangements existing on the date hereof, assume, guarantee, endorse make or otherwise become liable change any material Tax election or responsible (whether directly, contingently settle or otherwise) for obligations of compromise any other person (other than any Subsidiary) in an amount in excess of $100,000Tax liability or claim;
(l) make waive, release, assign, settle or compromise any loans claim, action or advances proceeding, other than (i) loans waivers, releases, assignments, settlements or advances to wholly-owned Subsidiaries made in the ordinary course of business consistent with past practice and (ii) routine salary, travel and expense advances to Company Employees in the ordinary course of business consistent with past practice;compromises that
(i) engage involve the payment of monetary damages equal to or lesser than the amounts specifically reserved with respect thereto on the balance sheet as of December 31, 2017 included in any transaction, the Company SEC Documents or enter into any contract, agreement that do not exceed $350,000 individually or arrangement (other than this Agreement, in the Transactions and the incurrence of indebtedness for borrowed money owing to W or any of its Affiliates and transactions pursuant to any such contract, agreement or arrangement entered into on or prior to the date hereof), with any Affiliateaggregate, (ii) engage in involve any transactionnon-monetary outcome, or and (iii) are with respect to ordinary course customer disputes;
(m) enter into any contract, agreement or arrangement, with any portfolio company new line of W that is not on arm's length terms and in business outside of the ordinary course of Company’s existing business, or (iii) amend, waive or relinquish any rights relating to any such transaction, contract, agreement or arrangement referred to in clause (i) or (ii) that will remain outstanding after the Closing in accordance with Section 8.05;; or
(n) authorize any new capital expenditures whichof, individuallyor commit or agree to take any of, are greater than $100,000 orthe foregoing actions. Nothing contained in this Agreement is intended to give Parent, in the aggregate, would cause total capital expenditures for year ending December 31, 2003 to exceed $500,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any capital expenditures in the ordinary course of business consistent with past practice;
(o) split, combine or reclassify any shares of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, other than (i) cash dividends and distributions by a wholly-owned Subsidiary to the Company or to a Subsidiary all of the capital stock which is owned directly or indirectly by indirectly, the Company right to control or (ii) direct the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms; or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its securities or any securities of the Subsidiaries;
(p) (i) increase the compensation or fringe benefits of any Company Employee (except for (x) increases in salary or wages in the ordinary course of business consistent with past practice, (y) the payment of accrued or earned but unpaid bonuses and (z) stay bonuses or similar retention payments in an amount not to exceed $10,000 with respect to any individual payment and $100,000 in the aggregate with respect to all such payments), (ii) grant any severance or termination pay to any Company Employee, (iii) loan or advance any money or other property to any Company Employee (other than routine salary, travel and expense advances to Company Employees in the ordinary course of business and consistent with past practice), (iv) establish, adopt, enter into, amend or terminate any Company Plan, collective bargaining or labor agreement 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 of this Agreement (other than as may be required by the terms of an existing Company Plan or collective bargaining agreement, or as may be required by applicable law or in order to qualify under Sections 401 and 501 of the Code), or (v) grant any equity or equity-based awards, other than in the cases of clauses (i) through (v) pursuant to commitments operations of the Company or any Subsidiary existing on of its Subsidiaries prior to the date hereof required by contracts set forth in Section 4.08(k) or Section 4.12 of Effective Time. Prior to the Effective Time, the Company Disclosure Schedule;
(q) paywill exercise, discharge or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business of liabilities reflected or reserved against in the consolidated financial statements of the Company referred to in Section 4.07 or liabilities incurred in the ordinary course of business;
(r) make or change any tax election or settle or compromise any income tax liability;
(s) other than in the ordinary course of business consistent with past practicethe terms and conditions of this Agreement, change any method of accounting, accounting policy or accounting practice, except for any such change required by reason of a concurrent change in GAAP as concurred with by the Company's independent auditors;
(t) fail to maintain insurance coverage at presently existing levels;
(u) make any repayments of principal to W or complete control and supervision over its Affiliates in respect of any Indebtedness owed to W or and its Affiliates or any payment of interest accrued in respect of such Indebtedness;
(v) agree or commit to do any of the foregoing; or
(w) knowingly take or agree or commit to take any action that would make any representation and warranty of W or the Company hereunder inaccurate in any material respect at, or as of any time prior to, the Closing, except for any representations or warranties that are made as of a specified dateSubsidiaries’ respective operations.
Appears in 1 contract
Samples: Transaction Agreement (Dover Downs Gaming & Entertainment Inc)
Covenants Relating to Conduct of Business. Section 7.01. Conduct (a) Except for matters (i) set forth in Schedule 6.01, (ii) expressly agreed to by Purchaser or (iii) or otherwise expressly permitted by the terms of the Company. From the date hereof until the Closing, the Company and the Subsidiaries shall conduct their business in the ordinary course consistent with past practice in compliance with all applicable laws and shall use their reasonable best efforts to preserve intact their business organizations and relationships with third parties and to keep available the services of their present officers and employees. Without limiting the generality of the foregoingthis Agreement, from the date hereof until of this Agreement to the Closing, Seller, PB Energy and the Company shall conduct the Business in the usual, regular and ordinary course in substantially the same manner as previously conducted and, to the extent consistent therewith, use commercially reasonable efforts to keep intact the Business. Notwithstanding the foregoing, Purchaser acknowledges and agrees that, except as otherwise agreed in the Ancillary Agreements, relationships with Seller and certain of its Affiliates providing services to the Business and the Company will terminate as of the Closing and except as expressly contemplated by in Section 6.15and that such termination shall not constitute a breach of this Agreement or the other Transaction Agreements, as may result from the consummation of the Transactions, Agreement.
(b) Except as set forth in Section 7.01 Schedule 6.01 or otherwise expressly permitted or required by the terms of this Agreement, the Company Disclosure Scheduleshall not, or as otherwise consented to in writing by Parent (except if such consent would be inconsistent with applicable law), such consent and Seller and PB Energy shall not to be unreasonably withheld with respect to the granting of IRUs in fiber and/or conduit by the Company Business or the SubsidiariesCompany, do any of the Company shall not and shall cause following without the Subsidiaries not toprior written consent of Purchaser:
(ai) adopt or propose any change in its amend the articles of incorporation, bylaws incorporation or other organizational documentsby-laws of the Company;
(bii) issue, deliver, sell, pledge redeem or transfer or authorize or propose the issuance, delivery, sale, pledge or transfer of otherwise acquire any shares of its the Company’s capital stock of or issue any class capital stock or any option, warrant or right relating thereto or any securities convertible into or exercisable forexchangeable for any shares of capital stock;
(iii) (A) grant to any executive officer or employee any increase in compensation or benefits, except in the Ordinary Course of Business or as may be required under existing agreements and except for any increases for which Seller or PB Energy shall be solely obligated; (B) enter into any employment agreements (or amend, change or supplement in any material respect any existing employment agreement or arrangement) with respect to any employees; (C) pay or agree to pay any pension, retirement allowance or other employee benefit not required by any existing plan, agreement or arrangement to any employee, whether past or present; or (D) commit itself to any pension, profit-sharing, bonus, incentive, deferred compensation, group insurance, severance pay, retirement, or other employee benefit plan, agreement or arrangement, or to any rightsemployment or consulting agreement with or for the benefit of any employee or to terminate or amend any of such plans or any of such agreements in existence on the date of this Agreement;
(iv) incur or assume any liabilities, warrants, options obligations or other rights to acquire, indebtedness for borrowed money or guarantee any such shares liabilities, obligations or indebtedness, other than in the Ordinary Course of Business; provided, however, that in no event shall the Business or the Company incur or assume any long-term indebtedness for borrowed money;
(v) permit, allow or suffer any Purchased Asset or any asset of the Company to become subjected to any Lien of any nature whatsoever that would have been required to be set forth in Schedule 4.10 if existing on the date of this Agreement;
(vi) cancel any material indebtedness (individually or in the aggregate) or waive any claims or rights of in excess of U.S. $10,000 individually or U.S. $50,000 in the aggregate;
(vii) pay, loan or advance any amount to, or sell, transfer or lease any of its assets to, or enter into any agreement with respect to or arrangement with, Seller or any of its Affiliates, except for (A) dividends and distributions from the foregoing other than (i) the issuance of Company Common Stock upon exercise of stock options Farradyne Division or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms, (ii) as required by Contracts in effect as of the date of this Agreement that are listed in Section 4.05 of the Company Disclosure Schedule to Seller and (iiiB) intercompany transactions, in both cases in the issuance Ordinary Course of capital stock of the Company as a dividend in respect of Preferred Stock outstanding on the date hereof in accordance with its present termsBusiness;
(iviii) make any change in the Accounting Principles;
(ix) acquire (by mergermerging or consolidating with, consolidation or acquisition by purchasing a substantial portion of stock the assets of, or assets) by any other manner, any business or any corporation, partnership partnership, association or other business organization or division thereof, (ii) sell, lease thereof or otherwise dispose of a Subsidiary acquire any assets (other than inventory) that are material;
(x) make or (iii) sellincur any capital expenditure that is not currently approved in writing or budgeted and that, lease or otherwise dispose of an amount of assets or securitiesindividually, including IRUs, for an amount is in excess of U.S. $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), except for transactions in the ordinary course consistent with past practice;
(d) merge 50,000 or consolidate with make or incur any other Person;
(e) make any investment, whether by purchase of stock or securities, contributions to capital or any property transfer (other than investments in cash or cash equivalents with a maturity of less than 90 days or investments in wholly-owned Subsidiaries made, in each casesuch expenditures which, in the ordinary course of business consistent with past practice)aggregate, or purchase for an amount are in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), any property or assets of any other individual or entity, except for inventory purchased for resale in the ordinary course of business consistent with past practice;
(f) enter into any agreement or arrangement that limits or otherwise restricts the Company or any of the Subsidiaries or any of their respective Affiliates or successors thereto or that by its terms could, after the Effective Time, limit or restrict Parent or the Company or any of their respective Affiliates or any successor thereto, from engaging or competing in any line of business or in any geographic area;
(g) other than in the ordinary course of business consistent with past practice, waive, release or relinquish any material right;
(h) other than in the ordinary course of business consistent with past practice, modify or change in any material respect any existing material license, lease, contract, or other agreement;
(i) enter into any agreements involving aggregate expenditures or receipts of more than $100,000 individually or $500,000 in the aggregate (or, with respect to (i) any Cost of Services Contract, $1,000,000 and (ii) switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any agreements in the ordinary course of business consistent with past practice, including but not limited to installation fees and customer premise equipment, in each case, associated with new customers and in the ordinary course of business consistent with past practice;
(j) create, incur or assume, or execute any new guarantee of, any Indebtedness in excess of $100,000 in the aggregate (other than indebtedness for borrowed money owing to W or any of its Affiliates) or prepay any Indebtedness;
(k) other than pursuant to arrangements existing on the date hereof, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for obligations of any other person (other than any Subsidiary) in an amount in excess of U.S. $100,000;
(lxi) make any loans sell, lease, license or advances other than (i) loans or advances to wholly-owned Subsidiaries made in the ordinary course otherwise dispose of business consistent with past practice and (ii) routine salary, travel and expense advances to Company Employees in the ordinary course of business consistent with past practice;
(i) engage in any transaction, or enter into any contract, agreement or arrangement (other than this Agreement, the Transactions and the incurrence of indebtedness for borrowed money owing to W or any of its Affiliates and transactions pursuant to any such contractassets that are material, agreement individually or arrangement entered into on or prior to the date hereof), with any Affiliate, (ii) engage in any transaction, or enter into any contract, agreement or arrangement, with any portfolio company of W that is not on arm's length terms and in the ordinary course of business, or (iii) amend, waive or relinquish any rights relating to any such transaction, contract, agreement or arrangement referred to in clause (i) or (ii) that will remain outstanding after the Closing in accordance with Section 8.05;
(n) authorize any new capital expenditures which, individually, are greater than $100,000 or, in the aggregate, would cause total capital expenditures for year ending December 31to the Business, 2003 to exceed $500,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any capital expenditures except inventory and obsolete or excess equipment sold in the ordinary course Ordinary Course of business consistent with past practiceBusiness;
(oxii) splitenter into any lease of real property, combine or reclassify except any shares of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, other than (i) cash dividends and distributions by a wholly-owned Subsidiary to the Company or to a Subsidiary all renewals of the capital stock which is owned directly or indirectly by Real Property Leases in the Company or (ii) the issuance Ordinary Course of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms; or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its securities or any securities of the SubsidiariesBusiness;
(pxiii) enter into any Contract outside the Ordinary Course of Business;
(ixiv) increase modify or change any Business Contract in any material respect; or
(xv) authorize any of, or commit or agree to take, whether in writing or otherwise, to do any of, the compensation or fringe benefits foregoing actions.
(c) Consistent with Seller’s, PB Energy’s and the Company’s past practices, Seller, PB Energy, and the Company shall each maintain and keep their respective properties and assets in at least as good condition and repair, reasonable wear and tear excepted, as the condition and repair of any Company Employee (except for (x) increases such properties and assets are in salary or wages in the ordinary course of business consistent with past practice, (y) the payment of accrued or earned but unpaid bonuses and (z) stay bonuses or similar retention payments in an amount not to exceed $10,000 with respect to any individual payment and $100,000 in the aggregate with respect to all such payments), (ii) grant any severance or termination pay to any Company Employee, (iii) loan or advance any money or other property to any Company Employee (other than routine salary, travel and expense advances to Company Employees in the ordinary course of business and consistent with past practice), (iv) establish, adopt, enter into, amend or terminate any Company Plan, collective bargaining or labor agreement 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.
(d) None of this Agreement (other than as may be required by the terms of an existing Company Plan or collective bargaining agreementSeller, PB Energy, or as may be required by applicable law or in order to qualify under Sections 401 and 501 of the Code), or (v) grant any equity or equity-based awards, other than in the cases of clauses (i) through (v) pursuant to commitments of the Company shall take any action or any Subsidiary existing on the date hereof required by contracts set forth in Section 4.08(k) or Section 4.12 of the Company Disclosure Schedule;
(q) pay, discharge or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business of liabilities reflected or reserved against in the consolidated financial statements of the Company referred to in Section 4.07 or liabilities incurred in the ordinary course of business;
(r) make or change any tax election or settle or compromise any income tax liability;
(s) other than in the ordinary course of business consistent with past practice, change any method of accounting, accounting policy or accounting practice, except for any such change required by reason of a concurrent change in GAAP as concurred with by the Company's independent auditors;
(t) fail to maintain insurance coverage at presently existing levels;
(u) make any repayments of principal to W or its Affiliates in respect of any Indebtedness owed to W or its Affiliates or any payment of interest accrued in respect of such Indebtedness;
(v) agree or commit to do any of the foregoing; or
(w) knowingly take or agree or commit to take any action that would constitute a default (with or without notice or lapse of time, or both) under any Business Contract or any agreement relating to or affecting the Business.
(e) Each of Seller, PB Energy and the Company shall use reasonable commercial efforts to maintain reasonable commercial working relationships with all of the existing customers and suppliers of the Business and shall not make any representation grant of credit to any customer or supplier.
(f) Each of Seller, PB Energy, and warranty of W or the Company hereunder inaccurate shall maintain its insurance policies and programs with respect to the Business in any material respect attheir current amounts and a basis consistent with past practice.
(g) Seller, or as of any time prior toPB Energy, and the ClosingCompany shall file, except for any representations or warranties that are made as of a specified dateprosecute, and maintain all Business Intellectual Property rights.
Appears in 1 contract
Samples: Stock and Asset Purchase Agreement (Telvent Git S A)
Covenants Relating to Conduct of Business. Section 7.01. 6.1 Conduct of Business by the CompanyCompany Pending the Merger. From Except as otherwise expressly contemplated by this Agreement or as described in the Company Disclosure Letter, during the period from the date hereof until of this Agreement through the ClosingEffective Time, the Company shall, and shall cause its Subsidiaries to, in all material respects carry on their respective businesses in, and not enter into any material transaction other than in accordance with, the Subsidiaries shall conduct their business in the regular and ordinary course and, to the extent consistent with past practice in compliance with all applicable laws and shall therewith, use their its reasonable best efforts to preserve intact their current business organizations and relationships with third parties and to organizations, keep available the services of their present current officers and employeesemployees and preserve their relationships with customers, suppliers and others having business dealings with them. Without limiting the generality of the foregoing, from the date hereof until the Closing and and, except as otherwise expressly contemplated by this Agreement or the other Transaction Agreements, as may result from the consummation of the Transactions, as set forth described in Section 7.01 of the Company Disclosure Schedule, or as otherwise consented to in writing by Parent (except if such consent would be inconsistent with applicable law), such consent not to be unreasonably withheld with respect to the granting of IRUs in fiber and/or conduit by the Company or the SubsidiariesLetter, the Company shall not not, and shall cause not permit any of its Subsidiaries to, without the Subsidiaries not toprior written consent of Parent:
(a) adopt (x) declare, set aside or propose pay any change dividends on, or make any other actual, constructive or deemed distributions in respect of, any of its articles capital stock, or otherwise make any payments to stockholders of incorporationthe Company in their capacity as such, bylaws other than (1) dividends declared prior to the date of this Agreement, and (2) dividends payable to the Company declared by any of the Company's Subsidiaries, (y) 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 (z) 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 organizational documentssecurities;
(b) issue, deliver, sell, pledge pledge, dispose of or transfer or authorize or propose the issuance, delivery, sale, pledge or transfer of otherwise encumber any shares of its capital stock of stock, any class other voting securities or equity equivalent or any securities convertible into or exercisable forinto, or any rights, warrants, warrants or options or other rights to acquire, any such shares shares, voting securities or enter into any agreement with respect to convertible securities or equity equivalent (other than, in the foregoing other than (i) case of the Company, the issuance of Company Common Stock upon exercise of stock options during
(c) amend its charter or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms, (ii) as required by Contracts in effect as of the date of this Agreement that are listed in Section 4.05 of the Company Disclosure Schedule and (iii) the issuance of capital stock of the Company as a dividend in respect of Preferred Stock outstanding on the date hereof in accordance with its present termsbylaws;
(id) acquire (or agree to acquire by mergermerging or consolidating with, consolidation or acquisition by purchasing a substantial portion of stock the assets of or assets) equity in, or by any other manner, any business or any corporation, partnership partnership, association or other business organization or division thereofthereof or otherwise acquire or agree to acquire any assets, in each case that are material, individually or in the aggregate, to the Company and its Subsidiaries taken as a whole;
(iie) sell, lease or otherwise dispose of a Subsidiary or (iii) agree to sell, lease or otherwise dispose of, any of an amount its assets that are material, individually or in the aggregate, to the Company and its Subsidiaries taken as a whole;
(f) incur any indebtedness for borrowed money or guarantee any such indebtedness or issue or sell any debt securities or guarantee any debt securities of assets or securities, including IRUs, for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000)others, except for transactions in the ordinary course consistent with past practice;
(d) merge borrowings or consolidate with any other Person;
(e) make any investment, whether by purchase of stock or securities, contributions to capital or any property transfer (other than investments in cash or cash equivalents with a maturity of less than 90 days or investments in wholly-owned Subsidiaries made, in each case, guarantees incurred in the ordinary course of business consistent with past practice), or purchase for an amount in excess of $100,000 (ormake any loans, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Actadvances or capital contributions to, $1,000,000)or investments in, any property other person, other than to the Company or assets any wholly owned Subsidiary of any the Company and other individual or entity, except for inventory purchased for resale than in the ordinary course of business consistent with past practice;
(fg) alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any Subsidiary of the Company;
(h) enter into or adopt or amend any existing severance plan, agreement or arrangement that limits or otherwise restricts the Company or any of the Subsidiaries or any of their respective Affiliates or successors thereto or that by its terms couldor, after the Effective Time, limit or restrict Parent or the Company or any of their respective Affiliates or any successor thereto, from engaging or competing in any line of business or in any geographic area;
(g) other than in the ordinary course of business, enter into or amend any employee benefit plan (including without limitation, the Stock Plan) or employment or consulting agreement except (x) as permitted by Section 7.11 or (y) with respect to employees that are not executive officers or directors, compensation increases associated with promotions and regular reviews in the ordinary course of business consistent with past practice, waive, release or relinquish any material right;
(h) other than in the ordinary course of business consistent with past practice, modify or change in any material respect any existing material license, lease, contract, or other agreement;practices; or
(i) enter into any agreements involving aggregate expenditures or receipts of more than $100,000 individually or $500,000 in the aggregate (or, with respect to (i) any Cost of Services Contract, $1,000,000 and (ii) switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any agreements in the ordinary course of business consistent with past practice, including but not limited to installation fees and customer premise equipment, in each case, associated with new customers and in the ordinary course of business consistent with past practice;
(j) create, incur or assume, or execute any new guarantee of, any Indebtedness in excess of $100,000 in the aggregate (other than indebtedness for borrowed money owing to W or any of its Affiliates) or prepay any Indebtedness;
(k) other than pursuant to arrangements existing on the date hereof, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for obligations of any other person (other than any Subsidiary) in an amount in excess of $100,000;
(l) make any loans or advances other than (i) loans or advances to wholly-owned Subsidiaries made in the ordinary course of business consistent with past practice and (ii) routine salary, travel and expense advances to Company Employees in the ordinary course of business consistent with past practice;
(i) engage in any transaction, or enter into any contract, agreement or arrangement (other than this Agreement, the Transactions and the incurrence of indebtedness for borrowed money owing to W or any of its Affiliates and transactions pursuant to any such contract, agreement or arrangement entered into on or prior to the date hereof), with any Affiliate, (ii) engage in any transaction, or enter into any contract, agreement or arrangement, with any portfolio company of W that is not on arm's length terms and in the ordinary course of business, or (iii) amend, waive or relinquish any rights relating to any such transaction, contract, agreement or arrangement referred to in clause (i) or (ii) that will remain outstanding after the Closing in accordance with Section 8.05;
(n) authorize any new capital expenditures which, individually, are greater than $100,000 or, in the aggregate, would cause total capital expenditures for year ending December 31, 2003 to exceed $500,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any capital expenditures in the ordinary course of business consistent with past practice;
(o) split, combine or reclassify any shares of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, other than (i) cash dividends and distributions by a wholly-owned Subsidiary to the Company or to a Subsidiary all of the capital stock which is owned directly or indirectly by the Company or (ii) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms; or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its securities or any securities of the Subsidiaries;
(p) (i) increase the compensation or fringe benefits of any Company Employee (except for (x) increases in salary or wages in the ordinary course of business consistent with past practice, (y) the payment of accrued or earned but unpaid bonuses and (z) stay bonuses or similar retention payments in an amount not to exceed $10,000 with respect to any individual payment and $100,000 in the aggregate with respect to all such payments), (ii) grant any severance or termination pay to any Company Employee, (iii) loan or advance any money or other property to any Company Employee (other than routine salary, travel and expense advances to Company Employees in the ordinary course of business and consistent with past practice), (iv) establish, adopt, enter intowaive, amend or terminate allow to lapse any term or condition of any confidentiality or "standstill" agreement to which the Company Plan, collective bargaining or labor agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be is a Company Plan if it were in existence as of party. During the period from the date of this Agreement (other than as may be required by through the terms of an existing Company Plan or collective bargaining agreementEffective Time, or as may be required by applicable law or in order to qualify under Sections 401 and 501 of the Code), or (v) grant any equity or equity-based awards, other than in the cases of clauses (i) through (v) pursuant to commitments of as requested by Parent, the Company or any Subsidiary existing on the date hereof required by contracts set forth in Section 4.08(k) or Section 4.12 of the Company Disclosure Schedule;
(q) pay, discharge or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business of liabilities reflected or reserved against in the consolidated financial statements of the Company referred to in Section 4.07 or liabilities incurred in the ordinary course of business;
(r) make or change any tax election or settle or compromise any income tax liability;
(s) other than in the ordinary course of business consistent with past practice, change any method of accounting, accounting policy or accounting practice, except for any such change required by reason of a concurrent change in GAAP as concurred with by the Company's independent auditors;
(t) fail to maintain insurance coverage at presently existing levels;
(u) make any repayments of principal to W or its Affiliates in respect of any Indebtedness owed to W or its Affiliates or any payment of interest accrued in respect of such Indebtedness;
(v) agree or commit to do any of the foregoing; or
(w) knowingly take or agree or commit to take any action that would make any representation and warranty of W or the Company hereunder inaccurate in any material respect at, or as of any time prior to, the Closing, except for any representations or warranties that are made as of a specified date.shall
Appears in 1 contract
Samples: Merger Agreement (Humana Inc)
Covenants Relating to Conduct of Business. Section 7.01. 4.1 Conduct of Business by the CompanyCompany Pending the Merger. From Except as expressly permitted by clauses (i) through (xvii) of this Section 4.1, during the period from the date hereof until of this Agreement through the ClosingEffective Time, the Company shall, and the shall cause each of its Subsidiaries shall conduct their to, in all material respects carry on its business in the ordinary course of its business as currently conducted and, to the extent consistent with past practice in compliance with all applicable laws and shall therewith, use their reasonable best efforts to preserve intact their its current business organizations and relationships with third parties and to organizations, keep available the services of their present its current officers and employeeskey employees and preserve its relationships with customers, suppliers and others having business dealings with it. Without limiting the generality of the foregoing, from the date hereof until the Closing and except as otherwise expressly contemplated by this Agreement or the other Transaction Agreements, as may result from the consummation of the Transactions, as set forth in Section 7.01 of the Company Disclosure Schedule, or as otherwise consented to in writing by Parent Letter (except if such consent would be inconsistent with applicable law), such consent not to be unreasonably withheld with respect specific reference to the granting of IRUs in fiber and/or conduit by the Company or the Subsidiariesapplicable subsection below), the Company shall not not, and shall cause not permit any of its Subsidiaries to, without the Subsidiaries not toprior written consent of Parent:
(ai) adopt (A) other than dividends paid by wholly-owned Subsidiaries, declare, set aside or propose pay any change dividends on, or make any other actual, constructive or deemed distributions in respect of, any of its articles capital stock, or otherwise make any payments to its stockholders in their capacity as such, (B) other than in the case of incorporationany Subsidiary, bylaws split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or (C) purchase, redeem or otherwise acquire any shares of capital stock of the Company or any other securities thereof or any rights, warrants or options to acquire any such shares or other organizational documentssecurities;
(bii) issue, deliver, sell, pledge pledge, dispose of or transfer or authorize or propose the issuance, delivery, sale, pledge or transfer of otherwise encumber any shares of its capital stock of stock, any class other voting securities or equity equivalent or any securities convertible into or exercisable forinto, or any rights, warrants, warrants or options or other rights (including options under the Company Stock Option Plans) to acquire, acquire any such shares shares, voting securities, equity equivalent or enter into any agreement with respect to the foregoing convertible securities, other than (iA) the issuance of shares of Company Common Stock upon the exercise of stock options or warrants, or conversion of Preferred Stock, Company Stock Options outstanding on the date hereof in accordance with their present terms, (ii) as required by Contracts in effect as of the date of this Agreement that are listed in Section 4.05 of the Company Disclosure Schedule accordance with their current terms and (iiiB) the issuance of capital stock shares of Company Common Stock pursuant to the Company as a dividend in respect of Preferred Stock outstanding on the date hereof in accordance with its present termsOption Agreement;
(iiii) amend the Company Charter or by-laws;
(iv) acquire (or agree to acquire by mergermerging or consolidating with, consolidation or acquisition by purchasing a substantial portion of stock the assets of or assets) equity in, or by any other manner, any business or any corporation, partnership limited liability company, partnership, association or other business organization or division thereof, thereof or otherwise acquire or agree to acquire any material assets outside of the ordinary course of business;
(iiv) sell, lease or otherwise dispose of a Subsidiary of, or (iii) agree to sell, lease or otherwise dispose of, any of an amount of assets or securitiesits material assets, including IRUs, for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), except for transactions in the ordinary course consistent with past practice;
(d) merge or consolidate with any other Person;
(e) make any investment, whether by purchase of stock or securities, contributions to capital or any property transfer (other than investments in cash or cash equivalents with a maturity sales of less than 90 days or investments in wholly-owned Subsidiaries made, in each case, in the ordinary course of business consistent with past practice), or purchase for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), any property or assets of any other individual or entity, except for inventory purchased for resale that are in the ordinary course of business consistent with past practice;
(fvi) enter into incur any agreement indebtedness for borrowed money, guarantee any such indebtedness or arrangement that limits make any loans, advances or otherwise restricts the Company capital contributions to, or other investments in, any of the Subsidiaries or any of their respective Affiliates or successors thereto or that by its terms couldother person, after the Effective Time, limit or restrict Parent or the Company or any of their respective Affiliates or any successor thereto, from engaging or competing in any line of business or in any geographic area;
(g) other than (A) in the ordinary course of business consistent with past practicepractices and (B) indebtedness, waiveloans, release advances, capital contributions and investments between the Company and any of its wholly-owned Subsidiaries or relinquish between any material right;
(h) other than of such wholly-owned Subsidiaries, in each case in the ordinary course of business consistent with past practice, modify or change in any material respect any existing material license, lease, contract, or other agreementpractices;
(ivii) enter into alter (through merger, liquidation, reorganization, restructuring or in any agreements involving aggregate expenditures other fashion) the corporate structure or receipts ownership of more than $100,000 individually the Company or $500,000 in the aggregate (or, with respect to (i) any Cost of Services Contract, $1,000,000 and (ii) switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any agreements in the ordinary course of business consistent with past practice, including but not limited to installation fees and customer premise equipment, in each case, associated with new customers and in the ordinary course of business consistent with past practiceSubsidiary;
(jviii) createexcept as provided in Section 4.1(viii) of the Company Letter, incur enter into or assumeadopt any, or execute amend any new guarantee ofexisting, severance plan, agreement or arrangement or enter into or amend any Indebtedness in excess of $100,000 in the aggregate Company Plan, employment agreement (other than indebtedness for borrowed money owing to W with an employee at or above management level), or any consulting agreement out of its Affiliates) or prepay any Indebtednessthe ordinary course;
(kix) other than pursuant except as provided in Section 4.1(ix) of the Company Letter, increase the compensation payable or to arrangements existing on the date hereofbecome payable to its directors, assume, guarantee, endorse officers or otherwise become liable or responsible employees (whether directly, contingently or otherwise) except for obligations of any other person (other than any Subsidiary) in an amount in excess of $100,000;
(l) make any loans or advances other than (i) loans or advances to wholly-owned Subsidiaries made increases in the ordinary course of business consistent with past practice and (ii) routine salary, travel and expense advances to in salaries or wages of employees of the Company Employees in the ordinary course of business consistent with past practice;
(i) engage in any transaction, or enter into any contract, agreement or arrangement (other than this Agreement, the Transactions and the incurrence of indebtedness for borrowed money owing to W or any of its Affiliates and transactions pursuant to any such contract, agreement or arrangement entered into on or prior to the date hereof), with any Affiliate, (ii) engage in any transaction, or enter into any contract, agreement or arrangement, with any portfolio company Subsidiaries who are not officers of W that is not on arm's length terms and in the ordinary course of business, or (iii) amend, waive or relinquish any rights relating to any such transaction, contract, agreement or arrangement referred to in clause (i) or (ii) that will remain outstanding after the Closing in accordance with Section 8.05;
(n) authorize any new capital expenditures which, individually, are greater than $100,000 or, in the aggregate, would cause total capital expenditures for year ending December 31, 2003 to exceed $500,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any capital expenditures in the ordinary course of business consistent with past practice;
(o) split, combine or reclassify any shares of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, other than (i) cash dividends and distributions by a wholly-owned Subsidiary to the Company or to a Subsidiary all of the capital stock which is owned directly or indirectly by the Company or (ii) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms; or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its securities Subsidiaries) or any securities of the Subsidiaries;
(p) (i) increase the compensation or fringe benefits of any Company Employee (except for (x) increases in salary or wages in the ordinary course of business consistent with past practice, (y) the payment of accrued or earned but unpaid bonuses and (z) stay bonuses or similar retention payments in an amount not to exceed $10,000 with respect to any individual payment and $100,000 in the aggregate with respect to all such payments), (ii) grant any severance or termination pay to to, or enter into any employment or severance agreement with, any director or officer of the Company Employeeor any of its Subsidiaries, (iii) loan or advance any money or other property to any Company Employee (other than routine salary, travel and expense advances to Company Employees in the ordinary course of business and consistent with past practice), (iv) establish, adopt, enter into, or, except as may be required to comply with applicable law, amend in any material respect or terminate take action to enhance in any Company Planmaterial respect or accelerate any rights or benefits under, any labor, collective bargaining bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or labor agreement or any other plan, agreement, program, policy, trust, fund fund, policy or other arrangement that would be a Company Plan if for the benefit of any director, officer or employee;
(x) knowingly violate or knowingly fail to perform any material obligation or duty imposed upon it were in existence as of the date of this Agreement or any Subsidiary by any applicable federal, state or local law, rule, regulation, guideline or ordinance;
(xi) make any change to accounting policies or procedures (other than as may actions required to be required taken by the terms of an existing Company Plan or collective bargaining agreement, or as may be required by applicable law or in order to qualify under Sections 401 and 501 of the Codegenerally accepted accounting principles), or (v) grant any equity or equity-based awards, other than in the cases of clauses (i) through (v) pursuant to commitments of the Company or any Subsidiary existing on the date hereof required by contracts set forth in Section 4.08(k) or Section 4.12 of the Company Disclosure Schedule;
(qxii) prepare or file any material Tax Return inconsistent with its past practice in preparing or filing similar Tax Returns in prior periods or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(xiii) make or rescind any express or deemed material election relating to Taxes or change any of its methods of reporting income or deductions for Tax purposes;
(xiv) commence any litigation or proceeding with respect to any material Tax liability or settle or compromise any material Tax liability without Parent's consent (which consent should not be unreasonably withheld) or commence any other litigation or proceedings or settle or compromise any other material claims or litigation;
(xv) enter into, renew, terminate or amend any agreement or contract material to the Company and its Subsidiaries, taken as a whole, including any Significant Contract; or purchase any real property or make or agree to make any new capital expenditure or expenditures which in the aggregate are in excess of $5 million;
(xvi) pay, discharge or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction satisfaction, in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reflected or reserved against in in, or contemplated by, the consolidated most recent financial statements (or the notes thereto) of the Company referred to in Section 4.07 or liabilities incurred included in the ordinary course of business;
(r) make Company SEC Documents or change any tax election or settle or compromise any income tax liability;
(s) other than incurred in the ordinary course of business consistent with past practice, change any method of accounting, accounting policy or accounting practice, except for any such change required by reason of a concurrent change in GAAP as concurred with by the Company's independent auditors;; or
(txvii) fail to maintain insurance coverage at presently existing levels;
(u) make any repayments of principal to W authorize, recommend, propose or its Affiliates in respect of any Indebtedness owed to W or its Affiliates or any payment of interest accrued in respect of such Indebtedness;
(v) agree or commit announce an intention to do any of the foregoing; or
(w) knowingly take or agree or commit to take any action that would make any representation and warranty of W or the Company hereunder inaccurate in any material respect at, or as enter into any contract, agreement, commitment or arrangement to do any of any time prior to, the Closing, except for any representations or warranties that are made as of a specified dateforegoing.
Appears in 1 contract
Covenants Relating to Conduct of Business. TC Section 7.016.1. Conduct of Business by the Company Pending the Merger TC . During the period from the date of this Agreement until the earlier of the Effective Time or such time as Parent's and Sub's designees shall constitute a majority of the Board of Directors of the Company. From the date hereof until the Closing, the Company shall, and the shall cause each of its Subsidiaries shall conduct their to, in all material respects, except as contemplated by this Agreement, carry on its business in the ordinary course as currently conducted and, to the extent consistent therewith, with past practice no less diligence and effort than would be applied in compliance with all applicable laws and shall use their reasonable best efforts the absence of this Agreement, seek to preserve intact their current business organizations and relationships with third parties and to organizations, keep available the services of their present current officers and employeesemployees and preserve their relationships with customers, suppliers and others having business dealings with them to the end that goodwill and ongoing businesses shall be unimpaired at the Effective Time. Without limiting the generality of the foregoing, from the date hereof until the Closing and except as expressly otherwise contemplated by this Agreement or the other Transaction AgreementsAgreement, as may result from the consummation of the Transactions, as set forth in Section 7.01 of the Company Disclosure Schedule, or as otherwise consented to in writing by Parent (except if during such consent would be inconsistent with applicable law), such consent not to be unreasonably withheld with respect to the granting of IRUs in fiber and/or conduit by the Company or the Subsidiariesperiod, the Company shall not not, and shall cause not permit any of its Subsidiaries to, without the Subsidiaries prior written consent of Parent (which consent shall not to:
be unreasonably withheld or delayed): (a) adopt amend or propose to amend its Articles of Incorporation or By-laws (or comparable governing instruments) or change the number of directors constituting the entire Board of Directors of the Company or any change in of its articles of incorporation, bylaws or other organizational documents;
Subsidiaries; (b) authorize for issuance, issue, deliver, grant, sell, pledge, or otherwise dispose of or propose to issue, deliver, grant, sell, pledge or transfer or authorize or propose the issuance, delivery, sale, pledge or transfer otherwise dispose of any shares of, or any options, warrants, commitments, subscriptions or rights of any kind to acquire or sell any shares of, the capital stock or other securities of the Company or any of its capital Subsidiaries including, but not limited to, stock of any class or appreciation rights, phantom stock, any securities convertible into or exercisable for, or any rights, warrants, options or other rights to acquire, any such exchangeable for shares or enter into any agreement with respect to the foregoing other than (i) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms, (ii) as required by Contracts in effect as of the date of this Agreement that are listed in Section 4.05 of the Company Disclosure Schedule and (iii) the issuance of capital stock of the Company as a dividend in respect of Preferred Stock outstanding on the date hereof in accordance with its present terms;
(i) acquire (by merger, consolidation or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof, (ii) sell, lease or otherwise dispose of a Subsidiary or (iii) sell, lease or otherwise dispose of an amount of assets or securities, including IRUs, for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), except for transactions in the ordinary course consistent with past practice;
(d) merge or consolidate with any other Person;
(e) make any investment, whether by purchase of stock or securities, contributions to capital or any property transfer (other than investments in cash or cash equivalents with a maturity of less than 90 days or investments in wholly-owned Subsidiaries made, in each case, in the ordinary course of business consistent with past practice), or purchase for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), any property or assets of any other individual or entity, except for inventory purchased for resale in the ordinary course class of business consistent with past practice;
(f) enter into any agreement or arrangement that limits or otherwise restricts the Company or any of its Subsidiaries; provided, however, that the Subsidiaries or any foregoing shall not prohibit the issuance of their respective Affiliates or successors thereto or that by its terms could, after Shares upon the Effective Time, limit or restrict Parent or the exercise of Company or any of their respective Affiliates or any successor thereto, from engaging or competing in any line of business or in any geographic area;
(g) other than in the ordinary course of business consistent with past practice, waive, release or relinquish any material right;
(h) other than in the ordinary course of business consistent with past practice, modify or change in any material respect any existing material license, lease, contract, or other agreement;
(i) enter into any agreements involving aggregate expenditures or receipts of more than $100,000 individually or $500,000 in the aggregate (or, with respect to (i) any Cost of Services Contract, $1,000,000 and (ii) switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any agreements in the ordinary course of business consistent with past practice, including but not limited to installation fees and customer premise equipment, in each case, associated with new customers and in the ordinary course of business consistent with past practice;
(j) create, incur or assume, or execute any new guarantee of, any Indebtedness in excess of $100,000 in the aggregate (other than indebtedness for borrowed money owing to W or any of its Affiliates) or prepay any Indebtedness;
(k) other than pursuant to arrangements existing on the date hereof, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for obligations of any other person (other than any Subsidiary) in an amount in excess of $100,000;
(l) make any loans or advances other than (i) loans or advances to wholly-owned Subsidiaries made in the ordinary course of business consistent with past practice and (ii) routine salary, travel and expense advances to Company Employees in the ordinary course of business consistent with past practice;
(i) engage in any transaction, or enter into any contract, agreement or arrangement (other than this Agreement, the Transactions and the incurrence of indebtedness for borrowed money owing to W or any of its Affiliates and transactions pursuant to any such contract, agreement or arrangement entered into on or Options granted prior to the date hereof), with any Affiliate, of this Agreement; (ii) engage in any transaction, or enter into any contract, agreement or arrangement, with any portfolio company of W that is not on arm's length terms and in the ordinary course of business, or (iii) amend, waive or relinquish any rights relating to any such transaction, contract, agreement or arrangement referred to in clause (i) or (ii) that will remain outstanding after the Closing in accordance with Section 8.05;
(n) authorize any new capital expenditures which, individually, are greater than $100,000 or, in the aggregate, would cause total capital expenditures for year ending December 31, 2003 to exceed $500,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any capital expenditures in the ordinary course of business consistent with past practice;
(oc) split, combine or reclassify any shares of its capital stock; stock or declare, pay or set aside or pay any dividend or other distribution (whether in cash, stock stock, securities or other property or any combination thereof) in respect of its capital stock, other than (i) cash dividends and distributions by a wholly-owned Subsidiary to the Company or to a Subsidiary all of the capital stock which is owned directly or indirectly by the Company or (ii) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms; or redeem, repurchase purchase or otherwise acquire or offer to redeemacquire, repurchasedirectly or indirectly, or otherwise acquire any shares of its securities or any securities of the Subsidiaries;
(p) (i) increase the compensation or fringe benefits of any Company Employee (except for (x) increases in salary or wages in the ordinary course of business consistent with past practice, (y) the payment of accrued or earned but unpaid bonuses and (z) stay bonuses or similar retention payments in an amount not to exceed $10,000 with respect to any individual payment and $100,000 in the aggregate with respect to all such payments), (ii) grant any severance or termination pay to any Company Employee, (iii) loan or advance any money capital stock or other property to any Company Employee securities; (other than routine salary, travel and expense advances to Company Employees in the ordinary course of business and consistent with past practiced), (iv) establish, adopt, enter into, amend or terminate any Company Plan, collective bargaining or labor agreement 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 of this Agreement (other than as may be required by the terms of an existing Company Plan or collective bargaining agreement, or as may be required by applicable law or in order to qualify under Sections 401 and 501 of the Code), or (v) grant any equity or equity-based awards, other than in the cases of clauses (i) through (v) pursuant to commitments of the Company or any Subsidiary existing on the date hereof required by contracts set forth in Section 4.08(k) or Section 4.12 of the Company Disclosure Schedule;
(q) pay, discharge or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business of liabilities reflected or reserved against in the consolidated financial statements of the Company referred to in Section 4.07 or liabilities incurred in the ordinary course of business;
(r) make or change any tax election or settle or compromise any income tax liability;
(s) other than in the ordinary course of business consistent with past practice, change any method of accounting, accounting policy or accounting practice, except for any such change required by reason of a concurrent change in GAAP as concurred with by the Company's independent auditors;
(t) fail to maintain insurance coverage at presently existing levels;
(u) make any repayments of principal to W or its Affiliates in respect of any Indebtedness owed to W or its Affiliates or any payment of interest accrued in respect of such Indebtedness;
(v) agree or commit to do any of the foregoing; or
(w) knowingly take or agree or commit to take any action that would make any representation and warranty of W or the Company hereunder inaccurate in any material respect at, or as of any time prior to, the Closing, except for any representations or warranties that are made as of a specified date.
Appears in 1 contract
Covenants Relating to Conduct of Business. Section 7.01. 4.1 Conduct of Business by the CompanyCompany Pending the Merger. From ----------------------------------------------------- Except as expressly permitted by clauses (i) through (xviii) of this Section 4.1, during the period from the date hereof until of this Agreement through the ClosingEffective Time, the Company shall, and the shall cause each of its Subsidiaries shall conduct their to, in all material respects carry on its business in the ordinary course of its business as currently conducted and, to the extent consistent with past practice in compliance with all applicable laws and shall therewith, use their reasonable best efforts to preserve intact their its current business organizations and relationships with third parties and to organizations, keep available the services of their present its current officers and employeesemployees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time. Without limiting the generality of the foregoing, from the date hereof until the Closing and except as otherwise expressly contemplated by this Agreement or the other Transaction Agreements, as may result from the consummation of the Transactions, as set forth in Section 7.01 of the Company Disclosure Schedule, or as otherwise consented to in writing by Parent Letter (except if such consent would be inconsistent with applicable law), such consent not to be unreasonably withheld with respect specific reference to the granting of IRUs in fiber and/or conduit by the Company or the Subsidiariesapplicable subsection below), the Company shall not not, and shall cause not permit any of its Subsidiaries to, without the Subsidiaries not toprior written consent of Parent:
(ai) adopt (A) other than dividends paid by wholly-owned Subsidiaries, declare, set aside or propose pay any change dividends on, or make any other actual, constructive or deemed distributions in respect of, any of its articles capital stock, or otherwise make any payments to its shareholders in their capacity as such, (B) other than in the case of incorporationany Subsidiary, bylaws split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or (C) purchase, redeem or otherwise acquire any shares of capital stock of the Company or any other securities thereof or any rights, warrants or options to acquire any such shares or other organizational documentssecurities;
(bii) issue, deliver, sell, pledge pledge, dispose of or transfer or authorize or propose the issuance, delivery, sale, pledge or transfer of otherwise encumber any shares of its capital stock of stock, any class other voting securities or equity equivalent or any securities convertible into or exercisable forinto, or any rights, warrants, warrants or options or other rights (including options under the Company Stock Option Plans) to acquire, acquire any such shares shares, voting securities, equity equivalent or enter into any agreement with respect to the foregoing convertible securities, other than (iA) the issuance of shares of Company Common Stock upon the exercise of stock options or warrants, or conversion of Preferred Stock, Company Stock Options outstanding on the date hereof in accordance with their present terms, (ii) as required by Contracts in effect as of the date of this Agreement that are listed in Section 4.05 of the Company Disclosure Schedule accordance with their current terms and (iiiB) the issuance of capital stock shares of Company Common Stock pursuant to the Company as a dividend in respect of Preferred Stock outstanding on the date hereof in accordance with its present termsOption Agreement;
(iiii) amend the Company Charter or by-laws;
(iv) acquire (or agree to acquire by mergermerging or consolidating with, consolidation or acquisition by purchasing a substantial portion of stock the assets of or assets) equity in, or by any other manner, any business or any corporation, partnership limited liability company, partnership, association or other business organization or division thereof, thereof or otherwise acquire or agree to acquire any assets;
(iiv) sell, lease or otherwise dispose of a Subsidiary of, or (iii) agree to sell, lease or otherwise dispose of, any of an amount of assets or securitiesits assets, including IRUs, for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), except for transactions in the ordinary course consistent with past practice;
(d) merge or consolidate with any other Person;
(e) make any investment, whether by purchase of stock or securities, contributions to capital or any property transfer (other than investments in cash or cash equivalents with a maturity sales of less than 90 days or investments in wholly-owned Subsidiaries made, in each case, in the ordinary course of business consistent with past practice), or purchase for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), any property or assets of any other individual or entity, except for inventory purchased for resale that are in the ordinary course of business consistent with past practice;
(fvi) enter into incur any agreement indebtedness for borrowed money, guarantee any such indebtedness or arrangement that limits make any loans, advances or otherwise restricts the Company capital contributions to, or other investments in, any of the Subsidiaries or any of their respective Affiliates or successors thereto or that by its terms couldother person, after the Effective Time, limit or restrict Parent or the Company or any of their respective Affiliates or any successor thereto, from engaging or competing in any line of business or in any geographic area;
(g) other than (A) in the ordinary course of business consistent with past practicepractices and (B) indebtedness, waiveloans, release advances, capital contributions and investments between the Company and any of its wholly-owned Subsidiaries or relinquish between any material right;
(h) other than of such wholly- owned Subsidiaries, in each case in the ordinary course of business consistent with past practice, modify or change in any material respect any existing material license, lease, contract, or other agreementpractices;
(ivii) enter into alter (through merger, liquidation, reorganization, restructuring or in any agreements involving aggregate expenditures other fashion) the corporate structure or receipts ownership of more than $100,000 individually the Company or $500,000 in the aggregate (or, with respect to (i) any Cost of Services Contract, $1,000,000 and (ii) switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any agreements in the ordinary course of business consistent with past practice, including but not limited to installation fees and customer premise equipment, in each case, associated with new customers and in the ordinary course of business consistent with past practiceSubsidiary;
(jviii) createexcept as provided in Section 4.1(viii) of the Company Letter, incur enter into or assumeadopt any, or execute amend any new guarantee ofexisting, severance plan, agreement or arrangement or enter into or amend any Indebtedness in excess of $100,000 in the aggregate Company Plan, employment agreement (other than indebtedness for borrowed money owing to W with an employee at or above management level), or any consulting agreement out of its Affiliates) or prepay any Indebtednessthe ordinary course;
(kix) other than pursuant except as provided in Section 4.1(ix) of the Company Letter, increase the compensation payable or to arrangements existing on the date hereofbecome payable to its directors, assume, guarantee, endorse officers or otherwise become liable or responsible employees (whether directly, contingently or otherwise) except for obligations of any other person (other than any Subsidiary) in an amount in excess of $100,000;
(l) make any loans or advances other than (i) loans or advances to wholly-owned Subsidiaries made increases in the ordinary course of business consistent with past practice and (ii) routine salary, travel and expense advances to in salaries or wages of employees of the Company Employees in the ordinary course of business consistent with past practice;
(i) engage in any transaction, or enter into any contract, agreement or arrangement (other than this Agreement, the Transactions and the incurrence of indebtedness for borrowed money owing to W or any of its Affiliates and transactions pursuant to any such contract, agreement or arrangement entered into on or prior to the date hereof), with any Affiliate, (ii) engage in any transaction, or enter into any contract, agreement or arrangement, with any portfolio company Subsidiaries who are not officers of W that is not on arm's length terms and in the ordinary course of business, or (iii) amend, waive or relinquish any rights relating to any such transaction, contract, agreement or arrangement referred to in clause (i) or (ii) that will remain outstanding after the Closing in accordance with Section 8.05;
(n) authorize any new capital expenditures which, individually, are greater than $100,000 or, in the aggregate, would cause total capital expenditures for year ending December 31, 2003 to exceed $500,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any capital expenditures in the ordinary course of business consistent with past practice;
(o) split, combine or reclassify any shares of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, other than (i) cash dividends and distributions by a wholly-owned Subsidiary to the Company or to a Subsidiary all of the capital stock which is owned directly or indirectly by the Company or (ii) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms; or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its securities Subsidiaries) or any securities of the Subsidiaries;
(p) (i) increase the compensation or fringe benefits of any Company Employee (except for (x) increases in salary or wages in the ordinary course of business consistent with past practice, (y) the payment of accrued or earned but unpaid bonuses and (z) stay bonuses or similar retention payments in an amount not to exceed $10,000 with respect to any individual payment and $100,000 in the aggregate with respect to all such payments), (ii) grant any severance or termination pay to to, or enter into any employment or severance agreement with, any director or officer of the Company Employeeor any of its Subsidiaries, (iii) loan or advance any money or other property to any Company Employee (other than routine salary, travel and expense advances to Company Employees in the ordinary course of business and consistent with past practice), (iv) establish, adopt, enter into, or, except as may be required to comply with applicable law, amend in any material respect or terminate take action to enhance in any Company Planmaterial respect or accelerate any rights or benefits under, any labor, collective bargaining bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or labor agreement or any other plan, agreement, program, policy, trust, fund fund, policy or other arrangement that would be a Company Plan if for the benefit of any director, officer or employee;
(x) knowingly violate or knowingly fail to perform any obligation or duty imposed upon it were in existence as of the date of this Agreement or any Subsidiary by any applicable material federal, state or local law, rule, regulation, guideline or ordinance;
(xi) make any change to accounting policies or procedures (other than as may actions required to be required taken by the terms of an existing Company Plan or collective bargaining agreement, or as may be required by applicable law or in order to qualify under Sections 401 and 501 of the Codegenerally accepted accounting principles), or (v) grant any equity or equity-based awards, other than in the cases of clauses (i) through (v) pursuant to commitments of the Company or any Subsidiary existing on the date hereof required by contracts set forth in Section 4.08(k) or Section 4.12 of the Company Disclosure Schedule;
(qxii) prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(xiii) make or rescind any express or deemed election relating to Taxes, change any of its methods of reporting income or deductions for Tax purposes, or settle or compromise any material federal, state, local or foreign income tax liability;
(xiv) commence any litigation or proceedings or settle or compromise any material claims or litigation;
(xv) enter into, renew, terminate or amend any agreement or contract material to the Company and its Subsidiaries, taken as a whole, including any Significant Contract; or purchase any real property or make or agree to make any new capital expenditure or expenditures which in the aggregate are in excess of $5 million;
(xvi) pay, discharge or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction satisfaction, in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reflected or reserved against in in, or contemplated by, the consolidated most recent financial statements (or the notes thereto) of the Company referred to in Section 4.07 or liabilities incurred included in the ordinary course of business;
(r) make Company SEC Documents or change any tax election or settle or compromise any income tax liability;
(s) other than incurred in the ordinary course of business consistent with past practice, change any method of accounting, accounting policy or accounting practice, except for any such change required by reason of a concurrent change in GAAP as concurred with by the Company's independent auditors;; or
(txvii) fail to maintain insurance coverage at presently existing levels;
(u) make any repayments of principal to W authorize, recommend, propose or its Affiliates in respect of any Indebtedness owed to W or its Affiliates or any payment of interest accrued in respect of such Indebtedness;
(v) agree or commit announce an intention to do any of the foregoing; or
(w) knowingly take or agree or commit to take any action that would make any representation and warranty of W or the Company hereunder inaccurate in any material respect at, or as enter into any contract, agreement, commitment or arrangement to do any of any time prior to, the Closing, except for any representations or warranties that are made as of a specified dateforegoing.
Appears in 1 contract
Covenants Relating to Conduct of Business. Section 7.01. Conduct (a) Except for matters (x) set forth in Schedule 5.01(a), (y) expressly agreed to by Purchaser or (z) otherwise contemplated by the terms of the Company. From this Agreement, from the date hereof until of this Agreement to the ClosingClosing Date, Seller shall cause the Company Acquired Companies and the Subsidiaries shall their respective subsidiaries to conduct their business respective businesses in the ordinary course in a manner consistent with past practice in compliance with all applicable laws and shall and, to the extent consistent therewith, use their commercially reasonable best efforts to preserve intact their material business organizations and relationships with third parties customers, suppliers, distributors and to keep available others with whom they deal in the services ordinary course of their present officers and employeesbusiness. Without limiting the generality of the foregoingIn addition, from the date hereof until the Closing and except as expressly contemplated by this Agreement or the other Transaction Agreements, as may result from the consummation of the Transactions, as set forth in Section 7.01 Schedule 5.01(a) or otherwise contemplated by the terms of this Agreement, Seller shall not cause any of the Company Disclosure Schedule, Acquired Companies or as otherwise consented any of their respective subsidiaries to in writing by Parent do any of the following without the prior written consent of Purchaser (except if such which consent would be inconsistent with applicable law), such consent shall not to be unreasonably withheld with respect to the granting of IRUs in fiber and/or conduit by the Company or the Subsidiaries, the Company shall not and shall cause the Subsidiaries not to:delayed):
(ai) adopt or propose any change in amend its articles of incorporation, bylaws association or other organizational documentscomparable Organizational Documents;
(bii) issue, deliver, sell, pledge declare or transfer pay any dividend or authorize make any other distribution to its shareholders whether or propose the issuance, delivery, sale, pledge not upon or transfer in respect of any shares of its capital stock; PROVIDED, HOWEVER, that (A) at any time prior to the close of business on the Closing Date, Seller will be allowed to withdraw or cause to be withdrawn any cash balances of the Acquired Companies and their respective subsidiaries, (B) dividends and distributions may continue to be made by the subsidiaries of each Acquired Company to such Acquired Company or to other wholly owned subsidiaries of such Acquired Company and (C) dividends and distributions of cash and cash equivalents may continue to be made by (x) the Acquired Companies to Seller and (y) Widia India to its shareholders;
(iii) redeem or otherwise acquire any shares of its capital stock or issue any capital stock (except upon the exercise of outstanding options) or any class option, warrant or right relating thereto or any securities convertible into or exercisable forexchangeable for any shares of capital stock;
(iv) adopt or amend in any material respect any Acquired Companies Benefit Plan maintained or contributed to, or required to be maintained or contributed to, by an Acquired Company or a subsidiary of an Acquired Company in respect of any rightsAffected Employee (as defined in Section 5.06(a)) or Former Employee (as defined in Section 5.06(d)), warrants, options or other rights to acquire, any such shares or enter into any agreement with respect to the foregoing other than (i) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms, (ii) except as required by Contracts in effect as of the date of this Agreement that are listed in Section 4.05 of the Company Disclosure Schedule and (iii) the issuance of capital stock of the Company as a dividend in respect of Preferred Stock outstanding on the date hereof in accordance with its present termsApplicable Law;
(iv) acquire (by merger, consolidation or acquisition of stock or assets) grant to any corporation, partnership executive officer or other business organization or division thereof, (ii) sell, lease or otherwise dispose of a Subsidiary or (iii) sell, lease or otherwise dispose key employee of an amount Acquired Company or a subsidiary of assets an Acquired Company any increase in compensation or securities, including IRUs, for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000)benefits, except for transactions in the ordinary course consistent with past practice;
(d) merge or consolidate with any other Person;
(e) make any investment, whether by purchase of stock or securities, contributions to capital or any property transfer (other than investments in cash or cash equivalents with a maturity of less than 90 days or investments in wholly-owned Subsidiaries made, in each case, in the ordinary course of business consistent with past practice), practice or purchase for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), any property or assets of any other individual or entity, as may be required under existing agreements and except for inventory purchased any increases or bonuses for resale which Seller shall be solely obligated;
(vi) incur or assume any liabilities, obligations or indebtedness for borrowed money or guarantee any such liabilities, obligations or indebtedness, other than in the ordinary course of business consistent with past practice;
(fvii) enter into any agreement or arrangement that limits or otherwise restricts the Company or subject any of the Subsidiaries or any of their respective Affiliates or successors thereto or that assets owned by its terms could, after the Effective Time, limit or restrict Parent or the an Acquired Company or a subsidiary of an Acquired Company as of the date of this Agreement to any Lien of their respective Affiliates any nature whatsoever that would have been required to be set forth in Schedule 2.06 or any successor thereto, from engaging or competing in any line of business or in any geographic area;
(g) other than in the ordinary course of business consistent with past practice, waive, release or relinquish any material right;
(h) other than in the ordinary course of business consistent with past practice, modify or change in any material respect any existing material license, lease, contract, or other agreement;
(i) enter into any agreements involving aggregate expenditures or receipts of more than $100,000 individually or $500,000 in the aggregate (or, with respect to (i) any Cost of Services Contract, $1,000,000 and (ii) switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any agreements in the ordinary course of business consistent with past practice, including but not limited to installation fees and customer premise equipment, in each case, associated with new customers and in the ordinary course of business consistent with past practice;
(j) create, incur or assume, or execute any new guarantee of, any Indebtedness in excess of $100,000 in the aggregate (other than indebtedness for borrowed money owing to W or any of its Affiliates) or prepay any Indebtedness;
(k) other than pursuant to arrangements 2.07 if existing on the date hereofof this Agreement;
(viii) waive any claims or rights of material value;
(ix) make any change in any method of accounting or accounting practice or policy other than those required or permitted by GAAP or required by Applicable Law;
(x) acquire by merging or consolidating with, assumeor by purchasing all or a substantial portion of the assets of, guaranteeor by any other manner, endorse any business or any corporation, partnership, association or other business organization or division thereof or otherwise become liable or responsible (whether directly, contingently or otherwise) for obligations of acquire any other person assets (other than inventory) that are material to the Acquired Companies and their respective subsidiaries, taken as a whole;
(xi) make or incur any Subsidiarycapital expenditure, other than capital expenditures (A) set forth in an amount Schedule 5.01(a)(xi) or (B) which, individually, is not in excess of $100,000(euro)50,000;
(lxii) make sell, lease, license or otherwise dispose of any loans or advances other than (i) loans or advances to wholly-owned Subsidiaries made in the ordinary course of business consistent with past practice and (ii) routine salary, travel and expense advances to Company Employees in the ordinary course of business consistent with past practice;
(i) engage in any transaction, or enter into any contract, agreement or arrangement (other than this Agreement, the Transactions and the incurrence of indebtedness for borrowed money owing to W or any of its Affiliates and transactions pursuant to any such contract, agreement or arrangement entered into on or prior asset that is material to the date hereof)Acquired Companies and their respective subsidiaries, with any Affiliatetaken as a whole, except (iiA) engage in any transaction, inventory and obsolete or enter into any contract, agreement excess equipment or arrangement, with any portfolio company machinery sold or disposed of W that is not on arm's length terms and in the ordinary course of business, (B) leases set forth in Schedule 5.01(a)(xii) and (C) sales, leases, licenses or (iii) amend, waive other disposals of assets to an Acquired Company or relinquish any rights relating to any such transaction, contract, agreement or arrangement referred to in clause (i) or (ii) that will remain outstanding after the Closing in accordance with Section 8.05a subsidiary of an Acquired Company;
(nxiii) authorize enter into any new capital expenditures lease, or renew any existing lease, of real property, except (A) any lease or renewal of lease set forth in Schedule 5.01(a)(xiii) and (B) any lease, or renewal of lease, which, individually, are greater than $100,000 or, provides for rental payments not in excess of (euro)50,000 for the aggregate, would cause total capital expenditures for year ending December 31, 2003 to exceed $500,000 (or, with respect to switch software upgrades for purposes term of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any capital expenditures in the ordinary course of business consistent with past practicesuch lease or renewal;
(oxiv) split(A) terminate the Receivables Agreement dated as of December 27, combine or reclassify any shares 2001 (the "RECEIVABLES AGREEMENT") among Widia India, ICICI Bank of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, other than (i) cash dividends India and distributions by a wholly-owned Subsidiary to the Company or to a Subsidiary all of the capital stock which is owned directly or indirectly by the Company HDFC Bank or (iiB) amend or otherwise modify the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding Receivables Agreement in a way that would reasonably be expected to have a material adverse effect on the date hereof in accordance with their present terms; or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any financial condition of its securities or any securities of the SubsidiariesWidia India;
(pxv) (i) increase the compensation settle or fringe benefits of compromise any Company Employee (except for (x) increases in salary or wages in the ordinary course of business consistent with past practice, (y) the payment of accrued or earned but unpaid bonuses and (z) stay bonuses or similar retention payments in an amount not to exceed $10,000 with respect to any individual payment and $100,000 in the aggregate with respect to all such payments), (ii) grant any severance or termination pay to any Company Employee, (iii) loan or advance any money or other property to any Company Employee (other than routine salary, travel and expense advances to Company Employees in the ordinary course of business and consistent with past practice), (iv) establish, adopt, enter into, amend or terminate any Company Plan, collective bargaining or labor agreement 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 of this Agreement (other than as may be required by the terms of an existing Company Plan or collective bargaining agreement, or as may be required by applicable law or in order to qualify under Sections 401 and 501 of the Code), or (v) grant any equity or equity-based awards, other than in the cases of clauses (i) through (v) pursuant to commitments of the Company or any Subsidiary existing on the date hereof required by contracts set forth in Section 4.08(k) or Section 4.12 of the Company Disclosure Schedule;
(q) pay, discharge or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise)suit, other than the paymentWIS Litigation (as defined in Schedule 2.12) in accordance with the Settlement Agreement (as defined below), discharge or satisfaction in other litigation matter or matter constituting the ordinary course subject matter of business of liabilities reflected an arbitration proceeding on terms which would require Purchaser to take any action, assume any liability or reserved against in the consolidated financial statements of the Company referred to in Section 4.07 or liabilities incurred in the ordinary course of businessforego any right;
(rxvi) make terminate, amend or change otherwise modify any tax election or settle or compromise any income tax liabilityof the Separation Agreements;
(sxvii) other than terminate, amend or otherwise modify the Settlement Agreement or the Share Purchase Agreement (as defined below), in the ordinary course of business consistent with past practiceeach case, change on terms which would require Purchaser to take any method of accountingaction, accounting policy assume any liability or accounting practice, except for forego any such change required by reason of a concurrent change in GAAP as concurred with by the Company's independent auditors;right; or
(txviii) fail to maintain insurance coverage at presently existing levels;
(u) make any repayments of principal to W agree, whether in writing or its Affiliates in respect of any Indebtedness owed to W or its Affiliates or any payment of interest accrued in respect of such Indebtedness;
(v) agree or commit otherwise, to do any of the foregoing; or.
(wb) knowingly take Parent and Seller shall keep all insurance policies currently maintained by Seller or agree or commit Parent, as applicable, with respect to take any action that would make any representation the Acquired Companies and warranty of W or their respective subsidiaries and their respective assets and properties (the Company hereunder inaccurate in any material respect at"GROUP INSURANCE POLICIES"), or as suitable replacements therefor, in full force and effect through the close of business on the Closing Date; it being understood that any time prior toand all Group Insurance Policies are owned and maintained by Parent, Seller and their respective affiliates (other than the Acquired Companies and their respective subsidiaries) and none of Purchaser, the Acquired Companies or their respective subsidiaries will have any rights under such insurance policies from and after the Closing Date. Seller shall cause to be kept all insurance policies currently maintained by the Acquired Companies and their respective subsidiaries with respect to themselves and their respective assets and properties (the "ACQUIRED COMPANIES INSURANCE POLICIES" and, together with the Group Insurance Policies, the "INSURANCE POLICIES"), or suitable replacements therefor, in full force and effect through the close of business on the Closing Date. Purchaser acknowledges that, subsequent to the Closing, except for neither Seller nor Parent shall have any representations responsibility to maintain, or warranties that are made as cause to be maintained, in full force and effect any of a specified datethe Insurance Policies or obtain any suitable replacement therefor covering any loss, liability, claim, damage or expense of the Acquired Companies or any of their respective subsidiaries.
Appears in 1 contract
Covenants Relating to Conduct of Business. Section (a) Except for the Argyll Road Carve-Out, those matters set forth in Schedule 7.01. Conduct , the Retained Asset and Liability Transfer or otherwise expressly permitted by the terms of the Company. From this Agreement from the date hereof until of this Agreement to the ClosingClosing (the “Interim Period”), Seller shall use commercially reasonable efforts to keep intact the Assets in a manner consistent with industry practices as applied by the Company and the Subsidiaries shall conduct their business in the ordinary course consistent with past practice in compliance with all applicable laws and shall use their reasonable best efforts to preserve intact their business organizations and relationships with third parties and to keep available the services of their present officers and employeesits business. Without limiting the generality of the foregoingIn addition, from the date hereof until the Closing and except as expressly contemplated by this Agreement or the other Transaction Agreements, as may result from the consummation of the Transactions, as set forth in Section Schedule 7.01 or otherwise expressly permitted or required by the terms of this Agreement, during the Interim Period Seller shall not permit the Company to, and the Company shall not, do any of the Company Disclosure Schedulefollowing without the prior written consent of Purchaser, or as otherwise consented to in writing by Parent (except if such consent would be inconsistent with applicable law), such consent which shall not to be unreasonably withheld with respect to the granting of IRUs in fiber and/or conduit by the Company or the Subsidiaries, the Company shall not and shall cause the Subsidiaries not todelayed:
(ai) adopt or propose any change in amend its articles of incorporation, bylaws amalgamation or other organizational documentsby-laws;
(bii) issue, deliver, sell, pledge redeem or transfer or authorize or propose the issuance, delivery, sale, pledge or transfer of otherwise acquire any shares of its capital stock of (including the Shares) or issue any class capital stock or any option, warrant or right relating thereto or any securities convertible into or exercisable forexchangeable for any shares of capital stock (including the Shares);
(iii) adopt, establish, replace or terminate, or amend or modify in any rights, warrants, options or other rights to acquirematerial respect, any such shares or enter into any agreement with respect to the foregoing other than (i) the issuance of Company Common Stock upon exercise of stock options or warrantsBenefit Plan, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms, (ii) except as required by Contracts in effect as of the date of this Agreement that are listed in Section 4.05 of the Company Disclosure Schedule and (iii) the issuance of capital stock of the Company as a dividend in respect of Preferred Stock outstanding on the date hereof in accordance with its present termsApplicable Law;
(iiv) acquire (by merger, consolidation grant to any executive officer or acquisition of stock key employee any increase in compensation or assets) any corporation, partnership or other business organization or division thereof, (ii) sell, lease or otherwise dispose of a Subsidiary or (iii) sell, lease or otherwise dispose of an amount of assets or securities, including IRUs, for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000)benefits, except for transactions in the ordinary course consistent with past practice;
(d) merge or consolidate with any other Person;
(e) make any investment, whether by purchase of stock or securities, contributions to capital or any property transfer (other than investments in cash or cash equivalents with a maturity of less than 90 days or investments in wholly-owned Subsidiaries made, in each case, in the ordinary course of business and consistent with past practicepractice or as may be required under an existing agreement set forth on Schedule 5.09(a), or purchase for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), any property or assets of any other individual or entity, except for inventory purchased for resale in the ordinary course of business consistent with past practice;
(fv) enter into incur or assume any agreement (A) short-term liabilities, obligations or arrangement that limits indebtedness for borrowed money or otherwise restricts the Company guarantee any such short-term liabilities, obligations or any of the Subsidiaries or any of their respective Affiliates or successors thereto or that by its terms couldindebtedness, after the Effective Time, limit or restrict Parent or the Company or any of their respective Affiliates or any successor thereto, from engaging or competing in any line of business or in any geographic area;
(g) other than in the ordinary course of business and consistent with past practice, waiveor (B) long-term liabilities, release obligations or relinquish indebtedness for borrowed money or guarantee any material rightsuch long-term liabilities, obligations or indebtedness;
(hvi) make any change in any method of accounting or accounting practice or policy other than those required by IFRS or as recommended by the Company’s accountants;
(vii) acquire by merging or consolidating with, or by purchasing a substantial portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or otherwise acquire any assets (other than inventory) that are material;
(viii) sell, lease, license or otherwise dispose of any of its assets that are material, in the aggregate, to the Company, except inventory and obsolete or excess equipment [ ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED sold in the ordinary course of business and consistent with past practice, modify except for the Argyll Road Carve-Out and except relating to the Retained Asset and Liability Transfer;
(ix) amend, modify, terminate, assign or change in extend the term of any material respect Company Contract;
(x) enter into any existing material license, lease, contractlease of real property;
(xi) compromise or settle any Proceeding or other investigation relating to the future operations of the Company; or
(xii) authorize any of, or other agreement;commit or agree to take, whether in writing or otherwise, to do any of, the foregoing actions.
(b) Without limiting the generality of Section 7.01(a), during the Interim Period Seller shall cause the Company to:
(i) enter into any agreements involving aggregate make capital expenditures or receipts of more than $100,000 individually or $500,000 in the aggregate (or, with respect to (i) any Cost of Services Contract, $1,000,000 and (ii) switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any agreements in the ordinary course of business consistent with past practice, including but not limited making planned capital expenditures relating to installation fees the boiler and customer premise equipment, in each case, associated with new customers and in the ordinary course of business consistent with past practicefire water emergency tank relating to the Company Business;
(j) create, incur or assume, or execute any new guarantee of, any Indebtedness in excess of $100,000 in the aggregate (other than indebtedness for borrowed money owing to W or any of its Affiliates) or prepay any Indebtedness;
(k) other than pursuant to arrangements existing on the date hereof, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for obligations of any other person (other than any Subsidiary) in an amount in excess of $100,000;
(l) make any loans or advances other than (i) loans or advances to wholly-owned Subsidiaries made in the ordinary course of business consistent with past practice and (ii) routine salary, travel use commercially reasonable efforts to preserve intact the current business organization of the Company and expense advances to Company Employees in keep available the ordinary course services of business consistent with past practice;the employees set forth on Schedule 7.01(b)(ii) (the “Key Employees”); and
(i) engage in any transaction, or enter into any contract, agreement or arrangement (other than this Agreement, the Transactions and the incurrence of indebtedness for borrowed money owing to W or any of its Affiliates and transactions pursuant to any such contract, agreement or arrangement entered into on or prior to the date hereof), with any Affiliate, (ii) engage in any transaction, or enter into any contract, agreement or arrangement, with any portfolio company of W that is not on arm's length terms and in the ordinary course of business, or (iii) amend, waive or relinquish provide notice to Purchaser as promptly as reasonably practical of any rights relating to any such transaction, contract, agreement or arrangement referred to in clause (i) or (ii) that will remain outstanding after the Closing in accordance with Section 8.05;
(n) authorize any new capital expenditures which, individually, are greater than $100,000 or, in the aggregate, would cause total capital expenditures for year ending December 31, 2003 to exceed $500,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any capital expenditures in the ordinary course of business consistent with past practice;
(o) split, combine or reclassify any shares of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, other than (i) cash dividends and distributions by a wholly-owned Subsidiary to Proceedings affecting the Company or to a Subsidiary all the Assets.
(c) In connection with the continuing operation of the capital stock which is owned directly or indirectly by the Company or (ii) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms; or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its securities or any securities of the Subsidiaries;
(p) (i) increase the compensation or fringe benefits of any Company Employee (except for (x) increases in salary or wages in the ordinary course of business consistent with past practice, (y) the payment of accrued or earned but unpaid bonuses and (z) stay bonuses or similar retention payments in an amount not to exceed $10,000 with respect to any individual payment and $100,000 in the aggregate with respect to all such payments), (ii) grant any severance or termination pay to any Company Employee, (iii) loan or advance any money or other property to any Company Employee (other than routine salary, travel and expense advances to Company Employees in the ordinary course of business and consistent with past practice), (iv) establish, adopt, enter into, amend or terminate any Company Plan, collective bargaining or labor agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Plan if it were in existence as of Business between the date of this Agreement and the Closing, Seller shall consult in good faith from time to time with the representatives for Purchaser in respect of material operational developments with respect to the Assets or the Company Business and the general status of the Argyll Road Carve-Out and the Retained Asset and Liability Transfer.
(other than as may be required by the terms of an existing Company Plan or collective bargaining agreementd) Seller shall keep, or as may cause to be required by applicable law or kept, all insurance policies set forth in order Schedule 5.11or suitable replacements therefor, in full force and effect through the close of business on the Closing Date.
(e) Nothing in this Section 7.01 shall be deemed to qualify under Sections 401 and 501 restrict in any event the ability of the Code), or (v) grant any equity or equity-based awards, other than in the cases of clauses Company to (i) through carry out its obligations under Section 7.13 or (vii) pursuant to commitments of withdraw cash from the Company by dividend, distribution, loan repayment or any Subsidiary existing on the date hereof required by contracts set forth in Section 4.08(k) or Section 4.12 of the Company Disclosure Schedule;
(q) pay, discharge or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business of liabilities reflected or reserved against in the consolidated financial statements of the Company referred to in Section 4.07 or liabilities incurred in the ordinary course of business;
(r) make or change any tax election or settle or compromise any income tax liability;
(s) other than in the ordinary course of business consistent with past practice, change any method of accounting, accounting policy or accounting practice, except for any such change required by reason of a concurrent change in GAAP as concurred with by the Company's independent auditors;
(t) fail to maintain insurance coverage at presently existing levels;
(u) make any repayments of principal to W or its Affiliates in respect of any Indebtedness owed to W or its Affiliates or any payment of interest accrued in respect of such Indebtedness;
(v) agree or commit to do any of the foregoing; or
(w) knowingly take or agree or commit to take any action that would make any representation and warranty of W or the Company hereunder inaccurate in any material respect at, or as of any time prior to, the Closing, except for any representations or warranties that are made as of a specified datemeans.
Appears in 1 contract
Covenants Relating to Conduct of Business. Section 7.01. 5.1 Conduct of Business by the CompanyCompany Pending the Merger. From Except as expressly permitted by clauses (i) through (xvii) of this Section 5.1, during the period from the date hereof until of this Agreement through the ClosingEffective Time, the Company shall, and the shall cause each of its Subsidiaries shall conduct their to, in all material respects carry on its business in the ordinary course of its business as currently conducted and, to the extent consistent with past practice in compliance with all applicable laws and shall therewith, use their reasonable best efforts to preserve intact their its current business organizations and relationships with third parties and to organizations, keep available the services of their present its current officers and employeesemployees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time. Without limiting the generality of the foregoing, from the date hereof until the Closing and except as otherwise expressly contemplated by this Agreement or the other Transaction Agreements, as may result from the consummation of the Transactions, as set forth in Section 7.01 of the Company Disclosure Schedule, or as otherwise consented to in writing by Parent Letter (except if such consent would be inconsistent with applicable law), such consent not to be unreasonably withheld with respect specific reference to the granting of IRUs in fiber and/or conduit by the Company or the Subsidiariesapplicable subsection below), the Company shall not not, and shall cause not permit any of its Subsidiaries to, without the Subsidiaries not toprior written consent of Parent:
(ai) adopt (A) other than dividends paid by wholly-owned Subsidiaries, declare, set aside or propose pay any change dividends on, or make any other actual, constructive or deemed distributions in respect of, any of its articles capital stock, or otherwise make any payments to its stockholders in their capacity as such, (B) other than in the case of incorporationany Subsidiary, bylaws split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or (C) purchase, redeem or otherwise acquire any shares of capital stock of the Company or any other securities thereof or any rights, warrants or options to acquire any such shares or other organizational documentssecurities;
(bii) issue, deliver, sell, pledge pledge, dispose of or transfer or authorize or propose the issuance, delivery, sale, pledge or transfer of otherwise encumber any shares of its capital stock of stock, any class other voting securities or equity equivalent or any securities convertible into or exercisable forinto, or any rights, warrants, warrants or options or other rights (including options under the Company Option Plans) to acquire, acquire any such shares shares, voting securities, equity equivalent or enter into any agreement with respect to the foregoing convertible securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of stock options or warrants, or conversion of Preferred Stock, Company Stock Options outstanding on the date hereof in accordance with their present terms, (ii) as required by Contracts in effect as of the date of this Agreement that are listed in Section 4.05 of the Company Disclosure Schedule and (iii) the issuance of capital stock of the Company as a dividend in respect of Preferred Stock outstanding on the date hereof in accordance with its present their current terms;
(iiii) amend its charter or by-laws;
(iv) acquire (or agree to acquire by mergermerging or consolidating with, consolidation or acquisition by purchasing a substantial portion of stock the assets of or assets) equity in, or by any other manner, any business or any corporation, partnership limited liability company, partnership, association or other business organization or division thereof, (ii) sell, lease or otherwise dispose of a Subsidiary or (iii) sell, lease or otherwise dispose of an amount of assets or securities, including IRUs, for an amount in excess of $100,000 (thereof or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), except for transactions in the ordinary course consistent with past practice;
(d) merge or consolidate with any other Person;
(e) make any investment, whether by purchase of stock or securities, contributions to capital or any property transfer (other than investments in cash or cash equivalents with a maturity of less than 90 days or investments in wholly-owned Subsidiaries made, in each case, in the ordinary course of business consistent with past practice), otherwise acquire or agree to acquire any assets;
(v) sell, lease or otherwise dispose of, or purchase for an amount in excess of $100,000 (oragree to sell, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000)lease or otherwise dispose of, any property or assets of any its assets, other individual or entity, except for inventory purchased for resale than in the ordinary course of business consistent with past practice;
(fvi) enter into incur any agreement indebtedness for borrowed money, guarantee any such indebtedness or arrangement that limits make any loans, advances or otherwise restricts the Company capital contributions to, or other investments in, any of the Subsidiaries or any of their respective Affiliates or successors thereto or that by its terms couldother person, after the Effective Time, limit or restrict Parent or the Company or any of their respective Affiliates or any successor thereto, from engaging or competing in any line of business or in any geographic area;
(g) other than (A) in the ordinary course of business consistent with past practicepractices and (B) indebtedness, waiveloans, release advances, capital contributions and investments between the Company and any of its wholly-owned Subsidiaries or relinquish between any material right;
(h) other than of such wholly- owned Subsidiaries, in each case in the ordinary course of business consistent with past practicepractices;
(vii) alter (through merger, modify liquidation, reorganization, restructuring or change in any material respect other fashion) the corporate structure or ownership of the Company or any existing material licenseSubsidiary;
(viii) except as provided in Section 6.5 or as required by applicable law, lease, contractenter into or adopt any, or other amend any existing, severance plan, agreement or arrangement or enter into or amend any Company Plan or employment or consulting agreement;
(iix) enter into any agreements involving aggregate expenditures increase the compensation payable or receipts of more than $100,000 individually to become payable to its directors, officers or $500,000 in the aggregate employees (or, with respect to (i) any Cost of Services Contract, $1,000,000 and (ii) switch software upgrades except for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any agreements in the ordinary course of business consistent with past practice, including but not limited to installation fees and customer premise equipment, in each case, associated with new customers and in the ordinary course of business consistent with past practice;
(j) create, incur or assume, or execute any new guarantee of, any Indebtedness in excess of $100,000 in the aggregate (other than indebtedness for borrowed money owing to W or any of its Affiliates) or prepay any Indebtedness;
(k) other than pursuant to arrangements existing on the date hereof, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for obligations of any other person (other than any Subsidiary) in an amount in excess of $100,000;
(l) make any loans or advances other than (i) loans or advances to wholly-owned Subsidiaries made increases in the ordinary course of business consistent with past practice and (ii) routine salary, travel and expense advances to in salaries or wages of employees of the Company Employees in the ordinary course of business consistent with past practice;
(i) engage in any transaction, or enter into any contract, agreement or arrangement (other than this Agreement, the Transactions and the incurrence of indebtedness for borrowed money owing to W or any of its Affiliates and transactions pursuant to any such contract, agreement or arrangement entered into on or prior to the date hereof), with any Affiliate, (ii) engage in any transaction, or enter into any contract, agreement or arrangement, with any portfolio company Subsidiaries who are not officers of W that is not on arm's length terms and in the ordinary course of business, or (iii) amend, waive or relinquish any rights relating to any such transaction, contract, agreement or arrangement referred to in clause (i) or (ii) that will remain outstanding after the Closing in accordance with Section 8.05;
(n) authorize any new capital expenditures which, individually, are greater than $100,000 or, in the aggregate, would cause total capital expenditures for year ending December 31, 2003 to exceed $500,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any capital expenditures in the ordinary course of business consistent with past practice;
(o) split, combine or reclassify any shares of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, other than (i) cash dividends and distributions by a wholly-owned Subsidiary to the Company or to a Subsidiary all of the capital stock which is owned directly or indirectly by the Company or (ii) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms; or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its securities Subsidiaries) or any securities of the Subsidiaries;
(p) (i) increase the compensation or fringe benefits of any Company Employee (except for (x) increases in salary or wages in the ordinary course of business consistent with past practice, (y) the payment of accrued or earned but unpaid bonuses and (z) stay bonuses or similar retention payments in an amount not to exceed $10,000 with respect to any individual payment and $100,000 in the aggregate with respect to all such payments), (ii) grant any severance or termination pay to to, or enter into any employment or severance agreement with, any director or officer of the Company Employeeor any of its Subsidiaries, (iii) loan or advance any money or other property to any Company Employee (other than routine salary, travel and expense advances to Company Employees in the ordinary course of business and consistent with past practice), (iv) establish, adopt, enter into, or, except as may be required to comply with applicable law, amend in any material respect or terminate take action to enhance in any Company Planmaterial respect or accelerate any rights or benefits under, any labor, collective bargaining bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or labor agreement or any other plan, agreement, program, policy, trust, fund fund, policy or other arrangement that would be a Company Plan if for the benefit of any director, officer or employee;
(x) knowingly violate or knowingly fail to perform any obligation or duty imposed upon it were in existence as of the date of this Agreement or any Subsidiary by any applicable material federal, state or local law, rule, regulation, guideline or ordinance;
(xi) make any change to accounting policies or procedures (other than as may actions required to be required taken by the terms of an existing Company Plan GAAP);
(xii) prepare or collective bargaining agreementfile any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or as may be required by applicable law adopt any method that is inconsistent with positions taken, elections made or methods used in order to qualify under Sections 401 and 501 preparing or filing similar Tax Returns in prior periods;
(xiii) settle or compromise any Tax liability in excess of the Code), $10,000;
(xiv) settle or compromise any claims or litigation in excess of $10,000 or commence any litigation or proceedings;
(vxv) grant enter into or amend any equity agreement or equity-based awards, other than in the cases of clauses contract (i) through (v) pursuant to commitments having a term in excess of 12 months and which is not terminable by the Company or a Subsidiary without penalty or premium by notice of 60 days or less or (ii) which involves or is expected to involve payments of $50,000 or more during the term thereof; enter into or amend any Subsidiary existing on the date hereof required by contracts set forth in Section 4.08(k) other agreement or Section 4.12 of contract material to the Company Disclosure Scheduleand its Subsidiaries, taken as a whole; or purchase any real property, or make or agree to make any new capital expenditure or expenditures (other than the purchase of real property) which in the aggregate are in excess of $50,000;
(qxvi) pay, discharge or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business of any such claims, liabilities reflected or reserved against in the consolidated financial statements of the Company referred to in Section 4.07 or liabilities incurred in the ordinary course of business;
(r) make or change any tax election or settle or compromise any income tax liability;
(s) other than obligations in the ordinary course of business consistent with past practice, change any method of accounting, accounting policy practice or accounting practice, except for any such change required by reason of a concurrent change in GAAP as concurred accordance with by the Company's independent auditorstheir terms;
(txvii) fail to maintain insurance coverage at presently existing levelsadopt a shareholders' rights plan or enter into a shareholders' rights agreement or adopt or enter into any other plan or agreement implementing a "poison pill" or any similar device;
(uxviii) make reprice, either directly or indirectly, any repayments Company Stock Option or other right to purchase shares of principal to W or its Affiliates in respect of any Indebtedness owed to W or its Affiliates or any payment of interest accrued in respect of such Indebtedness;Company Common Stock; or
(vxix) agree authorize, recommend, propose or commit announce an intention to do any of the foregoing; or
(w) knowingly take or agree or commit to take any action that would make any representation and warranty of W or the Company hereunder inaccurate in any material respect at, or as enter into any contract, agreement, commitment or arrangement to do any of any time prior to, the Closing, except for any representations or warranties that are made as of a specified dateforegoing.
Appears in 1 contract
Covenants Relating to Conduct of Business. Section 7.01. 4.1 Conduct of Business of Agouron Pending the CompanyMerger. From Agouron covenants and agrees that, during the period from the date hereof until to the ClosingEffective Time, unless Warner-Lambert shall otherwise agree in writing in advance, the Company businessxx xx Xxxxxxx and the its Subsidiaries shall conduct their business in be conducted only in, and Agouron and its Subsidiaries shall not take any action except in, the ordinary course of business and in a manner consistent with past practice and in compliance with all applicable laws laws; and Agouron and its Subsidiaries shall each use their its commercially reasonable best efforts to preserve substantially intact their the business organizations organization of Agouron and relationships with third parties and its Subsidiaries, to keep available the services of their the present officers officers, significant employees and employees. Without limiting consultants of Agouron and its Subsidiaries and to preserve the generality present relationships of Agouron and its subsidiaries with such of the foregoingcustomers, from suppliers, licensors, licensees, or distributors with which Agouron or any of its Subsidiaries has significant business relations. By way of amplification and not limitation, neither Agouron nor any of its Subsidiaries shall, between the date hereof until the Closing and except as expressly contemplated by of this Agreement or and the other Transaction AgreementsEffective Time, as may result from the consummation of the Transactions, except as set forth in Section 7.01 4.1 of the Company Agouron Disclosure Schedule, directly or as otherwise consented indirectly do, or propose or commit to in writing by Parent (except if such do, any of the following without the prior written consent would be inconsistent with applicable law)of Warner-Lambert, such which consent shall not to be unreasonably withheld with respect to the granting of IRUs in fiber and/or conduit by the Company or the Subsidiaries, the Company shall not and shall cause the Subsidiaries not to:delayed (but may xx xxxxxxxx):
(a) adopt Amend its Certificate of Incorporation or propose any change in its articles of incorporation, bylaws By-Laws or other equivalent organizational documents;
(b) issueIssue, deliver, sell, pledge pledge, dispose of or transfer encumber, or authorize or propose commit to the issuance, delivery, sale, pledge pledge, disposition or transfer of encumbrance of, (A) any shares of its capital stock of any class or any securities convertible into or exercisable forclass, or any rightsoptions, warrants, options convertible securities or other rights of any kind to acquireacquire any shares of capital stock, or any such other ownership interest (including but not limited to stock appreciation rights or phantom stock), of Agouron or any of its Subsidiaries (except for the issuance of up to 6,108,552 shares of Agouron Common Stock issuable upon exercise of outstanding options granted under the Agouron Stock Option Plans) or enter into (B) any agreement assets of Agouron or any of its Subsidiaries, except for sales of products and payments made pursuant to existing contracts in the ordinary course of business and in a manner consistent with past practice;
(c) Declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to the foregoing other than any of its capital stock;
(id) the issuance Reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms, (ii) as required by Contracts in effect as of the date of this Agreement that are listed in Section 4.05 of the Company Disclosure Schedule and (iii) the issuance of its capital stock of the Company as a dividend in respect of Preferred Stock outstanding on the date hereof in accordance with its present termsstock;
(i) acquire Acquire (by merger, consolidation or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof, (ii) sell, lease or otherwise dispose of a Subsidiary thereof or (iii) sell, lease or otherwise dispose of an amount of assets or securities, including IRUs, for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), except for transactions in the ordinary course consistent with past practice;
(d) merge or consolidate with any other Person;
(e) make any investment, whether by purchase of stock or securities, contributions to capital or any property transfer (other than investments in cash or cash equivalents with a maturity of less than 90 days or investments in wholly-owned Subsidiaries made, in each case, inventory in the ordinary course of business consistent with past practicebusiness) any assets; (ii) transfer, lease, mortgage, or otherwise dispose of or subject to any lien any of its assets (including capital stock of Subsidiaries), (iii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee (other than guarantees for purchase for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), any property or assets of any other individual or entity, except for inventory purchased for resale orders made in the ordinary course of business consistent with past practice;
(fbusiness) enter into any agreement or arrangement that limits endorse, or otherwise restricts as an accommodation become responsible for, the Company or obligations of any of the Subsidiaries or any of their respective Affiliates or successors thereto or that by its terms could, after the Effective Time, limit or restrict Parent or the Company or any of their respective Affiliates or any successor thereto, from engaging or competing in any line of business or in any geographic area;
(g) other than in the ordinary course of business consistent with past practice, waive, release or relinquish any material right;
(h) other than in the ordinary course of business consistent with past practice, modify or change in any material respect any existing material license, lease, contractperson, or other agreement;
(i) enter into make any agreements involving aggregate expenditures loans, advances or receipts of more than $100,000 individually or $500,000 in the aggregate (or, with respect to (i) any Cost of Services Contract, $1,000,000 and (ii) switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any agreements in the ordinary course of business consistent with past practice, including but not limited to installation fees and customer premise equipment, in each case, associated with new customers and in the ordinary course of business consistent with past practice;
(j) create, incur or assumecapital contributions to, or execute any new guarantee ofinvestments in, any Indebtedness in excess of $100,000 in the aggregate (other than indebtedness for borrowed money owing to W or any of its Affiliates) or prepay any Indebtedness;
(k) other than pursuant to arrangements existing on the date hereof, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for obligations of any other person (other than any Subsidiary) borrowings incurred with the prior written consent of Warner-Lambert (which consent shall not be unreasonably withhelx xx xxxxxxx), in an aggregate amount not to exceed $5,000,000); (iv) enter into any material contract or agreement or enter into, or amend or terminate any joint venture arrangements; (v) enter into any agreement as licensee or licensor, (vi) enter into any commitments or transactions material, individually or in the aggregate, to Agouron and its Subsidiaries taken as a whole; (vii) authorize any single capital expenditure which is in excess of $100,000;
(l) make any loans 300,000 or advances other than (i) loans or advances to wholly-owned Subsidiaries made in the ordinary course of business consistent with past practice and (ii) routine salary, travel and expense advances to Company Employees in the ordinary course of business consistent with past practice;
(i) engage in any transaction, or enter into any contract, agreement or arrangement (other than this Agreement, the Transactions and the incurrence of indebtedness for borrowed money owing to W or any of its Affiliates and transactions pursuant to any such contract, agreement or arrangement entered into on or prior to the date hereof), with any Affiliate, (ii) engage in any transaction, or enter into any contract, agreement or arrangement, with any portfolio company of W that is not on arm's length terms and in the ordinary course of business, or (iii) amend, waive or relinquish any rights relating to any such transaction, contract, agreement or arrangement referred to in clause (i) or (ii) that will remain outstanding after the Closing in accordance with Section 8.05;
(n) authorize any new capital expenditures which, individually, are greater than $100,000 orwhich are, in the aggregate, would cause total in excess of $750,000 for Agouron and its Subsidiaries taken as a whole other than capital expenditures for year ending December 31reflected in Agouron's fiscal 1998 budget, 2003 a copy of which has been delivered to exceed $500,000 Warner-Lambert; or (orviii) enter into or amend (other than a non-xxxxxxxx xxxxdment) any contract, agreement, commitment or arrangement with respect to switch software upgrades for purposes any of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000matters set forth in this Section 4.1(e), other than any capital expenditures in the ordinary course of business consistent with past practice;
(of) split, combine or reclassify any shares of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, other than (i) cash dividends and distributions by a wholly-owned Subsidiary Except to the Company extent required under this Agreement or to a Subsidiary all of the capital stock which is owned directly under any existing employee and director benefit plans, agreements or indirectly by the Company or (ii) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding arrangements as in effect on the date hereof in accordance with their present terms; or redeemof this Agreement and previously delivered to Warner-Lambert, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its securities or any securities of the Subsidiaries;
(p) (i) increase the compensation or fringe benefits of any Company Employee (xxx xx xxx xxrectors, officers or employees, except for (x) increases in salary or wages of employees of Agouron or its Subsidiaries in the ordinary course of business consistent in accordance with past practicepractice and bonuses paid for fiscal year 1998 in accordance with Section 5.6(a) hereof, (y) the payment of accrued or earned but unpaid bonuses and (z) stay bonuses or similar retention payments in an amount not to exceed $10,000 with respect to any individual payment and $100,000 in the aggregate with respect to all such payments), (ii) grant any severance or termination pay not currently required to be paid under existing severance plans or enter into, or amend, any Company Employeeemployment, (iii) loan consulting or advance severance agreement or arrangement with any money present or former director, officer or other property to employee of Agouron or any Company Employee (other than routine salaryof its Subsidiaries, travel and expense advances to Company Employees in the ordinary course of business and consistent with past practice), (iv) or establish, adopt, enter into, into or amend or terminate any Company Plancollective bargaining, collective bargaining bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, welfare, severance or labor agreement or any other plan, agreement, program, policy, trust, fund fund, policy or other arrangement that would be a Company Plan if it were in existence as for the benefit of the date of this Agreement any directors, officers or employees;
(other than g) Except as may be required by the terms as a result of an existing Company Plan or collective bargaining agreement, or as may be required by applicable a change in law or in order generally accepted accounting principles, change any of the accounting practices or principles used by it;
(h) Take, or permit any of its Subsidiaries to qualify under Sections 401 and 501 take, any action that (without regard to any action taken or agreed to be taken by Warner-Lambert or any of its affiliates) would prevent (x) Warner- Xxxxxxx xxom accounting for the business combination to xx xxxxxxxx xx the Merger as a pooling of interests or (y) the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code), or (v) grant any equity or equity-based awards, other than in the cases of clauses ;
(i) through (v) pursuant Make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, change any annual tax accounting period, change any method of Tax accounting, enter into any closing agreement relating to commitments any Tax, surrender any right to claim a Tax refund, or consent to any extension or waiver of the Company limitations period applicable to any Tax claim or any Subsidiary existing on the date hereof required by contracts set forth in Section 4.08(k) or Section 4.12 of the Company Disclosure Scheduleassessment;
(qj) paySettle or compromise any pending or threatened suit, action or claim which is material or which relates to the transactions contemplated hereby;
(k) Adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of Agouron or any of its Subsidiaries (other than the Merger);
(l) Pay, discharge or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction satisfaction, in the ordinary course of business and consistent with past practice, of liabilities reflected or reserved against in the consolidated financial statements of the Company referred to in Section 4.07 Agouron or liabilities incurred in the ordinary course of business;
(r) make or change any tax election or settle or compromise any income tax liability;
(s) other than in the ordinary course of business and consistent with past practice, change any method of accounting, accounting policy or accounting practice, except for any such change required by reason of a concurrent change in GAAP as concurred with by the Company's independent auditors;
(t) fail to maintain insurance coverage at presently existing levels;
(u) make any repayments of principal to W or its Affiliates in respect of any Indebtedness owed to W or its Affiliates or any payment of interest accrued in respect of such Indebtedness;
(v) agree or commit to do any of the foregoing; or
(w) knowingly take or agree or commit to take any action that would make any representation and warranty of W or the Company hereunder inaccurate in any material respect at, or as of any time prior to, the Closing, except for any representations or warranties that are made as of a specified date.
Appears in 1 contract
Samples: Merger Agreement (Warner Lambert Co)
Covenants Relating to Conduct of Business. Section 7.01. 4.1 Conduct of Business by the CompanyCompany Pending the Merger. From ----------------------------------------------------- Except as expressly permitted by clauses (i) through (xvi) of this Section 4.1, during the period from the date hereof until of this Agreement through the ClosingEffective Time, the Company shall, and the shall cause each of its Subsidiaries shall conduct their to, in all material respects carry on its business in the ordinary course of its business as currently conducted and, to the extent consistent with past practice in compliance with all applicable laws and shall therewith, use their reasonable best efforts to preserve intact their its current business organizations and relationships with third parties and to organizations, keep available the services of their present its current officers and employeesemployees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time. Without limiting the generality of the foregoing, from the date hereof until the Closing and except as otherwise expressly contemplated by this Agreement or the other Transaction Agreements, as may result from the consummation of the Transactions, as set forth in Section 7.01 of the Company Disclosure Schedule, or as otherwise consented to in writing by Parent Letter (except if such consent would be inconsistent with applicable law), such consent not to be unreasonably withheld with respect specific reference to the granting of IRUs in fiber and/or conduit by the Company or the Subsidiariesapplicable subsection below), the Company shall not not, and shall cause not permit any of its Subsidiaries to, without the Subsidiaries not toprior written consent of Parent:
(ai) adopt (A) other than dividends paid by wholly-owned Subsidiaries, declare, set aside or propose pay any change dividends on, or make any other actual, constructive or deemed distributions in respect of, any of its articles capital stock, or otherwise make any payments to its Stockholders in their capacity as such, (B) split, combine or reclassify any of incorporationits capital stock or issue or authorize the issuance of any other securities in respect of, bylaws in lieu of or in substitution for shares of its capital stock or (C) purchase, redeem or otherwise acquire any shares of capital stock of the Company or any other securities thereof or any rights, warrants or options to acquire any such shares or other organizational documentssecurities;
(bii) issue, deliver, sell, pledge pledge, dispose of or transfer or authorize or propose the issuance, delivery, sale, pledge or transfer of otherwise encumber any shares of its capital stock of stock, any class other voting securities or equity equivalent or any securities convertible into or exercisable forinto, or any rights, warrants, warrants or options or other rights (including options under the Company Option Plans) to acquire, acquire any such shares shares, voting securities, equity equivalent or enter into any agreement with respect to the foregoing convertible securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of stock options or warrants, or conversion of Preferred Stock, Company Stock Options outstanding on the date hereof in accordance with their present terms, (ii) as required by Contracts in effect as of the date of this Agreement that are listed in Section 4.05 accordance with their current terms and the issuance of Company Preferred Stock and related Company Common Stock or Company Rights pursuant to the Company Disclosure Schedule and Rights Agreement in accordance with the terms thereof;
(iii) the issuance of capital stock of the Company as a dividend in respect of Preferred Stock outstanding on the date hereof in accordance with amend its present termscharter or by-laws;
(iiv) acquire (or agree to acquire by mergermerging or consolidating with, consolidation or acquisition by purchasing a substantial portion of stock the assets of or assets) equity in, or by any other manner, any business or any corporation, partnership limited liability company, partnership, association or other business organization or division thereof, (ii) sell, lease or otherwise dispose of a Subsidiary or (iii) sell, lease or otherwise dispose of an amount of assets or securities, including IRUs, for an amount in excess of $100,000 (thereof or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), except for transactions in the ordinary course consistent with past practice;
(d) merge or consolidate with any other Person;
(e) make any investment, whether by purchase of stock or securities, contributions to capital or any property transfer (other than investments in cash or cash equivalents with a maturity of less than 90 days or investments in wholly-owned Subsidiaries made, in each case, in the ordinary course of business consistent with past practice), otherwise acquire or purchase for an amount in excess of $100,000 (or, with respect agree to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), acquire any property or assets of any other individual or entity, except for inventory purchased for resale in the ordinary course of business consistent with past practiceassets;
(fv) enter into any agreement or arrangement that limits sell, lease or otherwise restricts the Company dispose of, or agree to sell, lease or otherwise dispose of, any of the Subsidiaries or any of their respective Affiliates or successors thereto or that by its terms couldsignificant assets, after the Effective Time, limit or restrict Parent or the Company or any of their respective Affiliates or any successor thereto, from engaging or competing in any line of business or in any geographic area;
(g) other than in the ordinary course of business consistent with past practice, waiveprovided, release or relinquish any material righthowever, Parent and Sub acknowledge that the lease in respect -------- ------- of the Company's Abilene, Texas location will expire on April 30, 2001, and will not be renewed;
(hvi) except in regard to draws on the Company's current line of credit, incur any indebtedness for borrowed money, guarantee any such indebtedness or make any loans, advances or capital contributions to, or other investments in, any other person, other than (A) in the ordinary course of business consistent with past practice, modify or change in any material respect any existing material license, lease, contract, or other agreement;
(i) enter into any agreements involving aggregate expenditures or receipts of more than $100,000 individually or $500,000 in the aggregate (or, with respect to (i) any Cost of Services Contract, $1,000,000 practices and (iiB) switch software upgrades for purposes indebtedness, loans, advances, capital contributions and investments between the Company and any of compliance with the Communication Assistance for Law Enforcement Actits wholly-owned Subsidiaries or between any of such wholly-owned Subsidiaries, $1,000,000), other than any agreements in each case in the ordinary course of business consistent with past practice, including but not limited to installation fees and customer premise equipment, in each case, associated with new customers and in the ordinary course of business consistent with past practicepractices;
(jvii) createalter (through merger, incur liquidation, reorganization, restructuring or assume, in any other fashion) the corporate structure or execute any new guarantee of, any Indebtedness in excess ownership of $100,000 in the aggregate (other than indebtedness for borrowed money owing to W Company or any of its Affiliates) or prepay any IndebtednessSubsidiary;
(kviii) other than pursuant to arrangements existing on the date hereofexcept as provided in Section 5.4 or as required by applicable law, assumeenter into or adopt any, guaranteeor amend any existing, endorse severance plan, agreement or otherwise become liable arrangement or responsible (whether directly, contingently enter into or otherwise) for obligations of amend any other person (other than any Subsidiary) in an amount in excess of $100,000Company Plan or employment or consulting agreement;
(lix) make any loans increase the compensation payable or advances other than to become payable to its directors, officers or employees (i) loans or advances to wholly-owned Subsidiaries made except for increases in the ordinary course of business consistent with past practice and (ii) routine salary, travel and expense advances to in salaries or wages of employees of the Company Employees in the ordinary course of business consistent with past practice;
(i) engage in any transaction, or enter into any contract, agreement or arrangement (other than this Agreement, the Transactions and the incurrence of indebtedness for borrowed money owing to W or any of its Affiliates and transactions pursuant to any such contract, agreement Subsidiaries who are not executive officers or arrangement entered into on or prior to the date hereof), with any Affiliate, (ii) engage in any transaction, or enter into any contract, agreement or arrangement, with any portfolio company of W that is not on arm's length terms and in the ordinary course of business, or (iii) amend, waive or relinquish any rights relating to any such transaction, contract, agreement or arrangement referred to in clause (i) or (ii) that will remain outstanding after the Closing in accordance with Section 8.05;
(n) authorize any new capital expenditures which, individually, are greater than $100,000 or, in the aggregate, would cause total capital expenditures for year ending December 31, 2003 to exceed $500,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any capital expenditures in the ordinary course of business consistent with past practice;
(o) split, combine or reclassify any shares of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, other than (i) cash dividends and distributions by a wholly-owned Subsidiary to the Company or to a Subsidiary all directors of the capital stock which is owned directly or indirectly by the Company or (ii) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms; or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its securities or any securities of the Subsidiaries;
(p) (i) increase the compensation or fringe benefits of any Company Employee (except for (x) increases in salary or wages in the ordinary course of business consistent with past practice, (y) the payment of accrued or earned but unpaid bonuses and (z) stay bonuses or similar retention payments in an amount not to exceed $10,000 with respect to any individual payment and $100,000 in the aggregate with respect to all such payments), (ii) Company),or grant any severance or termination pay to to, or enter into any employment or severance agreement with, any director or officer of the Company Employeeor any of its Subsidiaries, (iii) loan or advance any money or other property to any Company Employee (other than routine salary, travel and expense advances to Company Employees in the ordinary course of business and consistent with past practice), (iv) establish, adopt, enter into, or, except as may be required to comply with applicable law, amend in any material respect or terminate take action to enhance in any Company Planmaterial respect or accelerate any rights or benefits under, any labor, collective bargaining bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or labor agreement or any other plan, agreement, program, policy, trust, fund fund, policy or other arrangement for the benefit of any director, officer or employee; it being further agreed that would no bonus of any kind or nature will be a paid by the Company Plan if it were in existence as to any employee, officer, or director of the Company prior to the Effective Time and no such bonus has been paid to any such person on or after December 31, 2000, to the date of this Agreement Agreement; provided further, however, this prohibition against bonus shall not prohibit the Company from paying monetary bonuses to its restaurant managers and supervisors in the ordinary course of business in accordance with its Bonus Program described in Section 3.12(a) of the Company Letter.
(x) knowingly violate or knowingly fail to perform any obligation or duty imposed upon it or any Subsidiary by any applicable material federal, state or local law, rule, regulation, guideline or ordinance ;
(xi) make any change to accounting policies or procedures (other than as may actions required to be required taken by the terms of an existing Company Plan GAAP);
(xii) prepare or collective bargaining agreementfile any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or as may be required by applicable law adopt any method that is inconsistent with positions taken, elections made or methods used in order preparing or filing similar Tax Returns in prior periods;
(xiii) settle or compromise any Tax liability claim in excess of $10,000;
(xiv) settle or compromise any claims or litigation in excess of $10,000, or commence any litigation or proceedings;
(xv) except in regard to qualify under Sections 401 and 501 the renewal of the Code)Company's indemnification and insurance policy for its directors and officers, which is on a claims made basis, enter into or (v) grant amend any equity agreement or equity-based awards, other than in the cases of clauses contract (i) through (v) pursuant to commitments having a term in excess of 12 months and which is not terminable by the Company or a Subsidiary without penalty or premium by notice of 60 days or less or (ii) which involves or is expected to involve payments of $50,000 or more during the term thereof; enter into or amend any Subsidiary existing on the date hereof required by contracts set forth in Section 4.08(k) other agreement or Section 4.12 of contract material to the Company Disclosure Scheduleand its Subsidiaries, taken as a whole; or purchase any real property, or make or agree to make any new capital expenditure or expenditures (other than the purchase of real property) which in the aggregate are in excess of $50,000 per month;
(qxvi) pay, discharge or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business of any such claims, liabilities reflected or reserved against in the consolidated financial statements of the Company referred to in Section 4.07 or liabilities incurred in the ordinary course of business;
(r) make or change any tax election or settle or compromise any income tax liability;
(s) other than obligations in the ordinary course of business consistent with past practice, change any method of accounting, accounting policy practice or accounting practice, except for any such change required by reason of a concurrent change in GAAP as concurred accordance with by the Company's independent auditorstheir terms;
(txvii) fail reprice, either directly or indirectly, any Company Stock Option or other right to maintain insurance coverage at presently existing levels;
(u) make any repayments purchase shares of principal to W or its Affiliates in respect of any Indebtedness owed to W or its Affiliates or any payment of interest accrued in respect of such Indebtedness;
(v) agree or commit to do any of the foregoingCompany Common Stock; or
(w) knowingly take or agree or commit to take any action that would make any representation and warranty of W or the Company hereunder inaccurate in any material respect at, or as of any time prior to, the Closing, except for any representations or warranties that are made as of a specified date.
Appears in 1 contract
Covenants Relating to Conduct of Business. Section 7.01. 5.1 Conduct of Business by the CompanyCompany Pending the Reorganization. From During the period from the date hereof of this Agreement until the ClosingEffective Time, the Company shall, and the shall cause each of its Subsidiaries shall conduct their to, in all material respects, except as contemplated by this Agreement, carry on its business in the ordinary course consistent with past practice in compliance with all applicable laws and shall use their reasonable best efforts to preserve intact their business organizations and relationships with third parties and to keep available the services of their present officers and employeesas currently conducted. Without limiting the generality of the foregoing, from the date hereof until the Closing and except as expressly otherwise contemplated by this Agreement (including the Annexes hereto) or the other Transaction Agreements, as may result from the consummation of the Transactions, as set forth disclosed in Section 7.01 of the Company Disclosure ScheduleLetter, or as otherwise consented to in writing by Parent (except if during such consent would be inconsistent with applicable law), such consent not to be unreasonably withheld with respect to the granting of IRUs in fiber and/or conduit by the Company or the Subsidiariesperiod, the Company shall not not, and shall cause not permit any of its Subsidiaries to, without the Subsidiaries not toprior written consent of Parent:
(a) adopt (i) declare, set aside or propose pay any change dividends on, or make any other distributions in respect of, or redeem or repurchase, any of its articles of incorporation, bylaws capital stock or other organizational documentsequity interest, except for dividends by a Subsidiary of the Company to its parent or (ii) split, combine or reclassify any of its capital stock or other equity interest 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;
(b) issue, deliver, sell, pledge or transfer or authorize or propose the issuance, delivery, sale, pledge or transfer of otherwise encumber any shares of its capital stock of or other equity interest, any class other voting securities or any securities convertible into or exercisable forinto, or any rights, warrants, warrants or options or other rights to acquire, any such shares, voting securities or convertible securities, other than the issuance of shares of Company Common Stock under the Company Long-Term Incentive Plan, Company Restricted Stock Plan or enter into any agreement with respect Tax Deferred Savings Plan in the ordinary course or pursuant to the foregoing Investment Agreement;
(c) amend its Restated Certificate of Incorporation or By-laws or other similar organizational documents;
(d) acquire, or agree to acquire, in a single transaction or in a series of related transactions, any business or assets, other than (i) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms, (ii) as required by Contracts in effect as of the date of this Agreement transactions that are listed in Section 4.05 the ordinary course of business, and which involve individually or in the Company Disclosure Schedule and (iii) the issuance of capital stock of the Company as aggregate a dividend in respect of Preferred Stock outstanding on the date hereof in accordance with its present terms;
(i) acquire (by merger, consolidation or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof, (ii) sell, lease or otherwise dispose of a Subsidiary or (iii) sell, lease or otherwise dispose of an amount of assets or securities, including IRUs, for an amount purchase price not in excess of $100,000 5,000,000 and (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), except for transactions ii) capital expenditures described in the ordinary course consistent with past practice;
paragraph (de) merge or consolidate with any other Personbelow;
(e) make or agree to make any investment, whether by purchase of stock or securities, contributions to new capital or any property transfer (expenditure other than investments expenditures contemplated by the Company's capital budget for fiscal 1999 and expenditures not in cash excess of the dollar amount included in the Company's business plan for fiscal 2000;
(f) sell, lease, license, encumber or cash equivalents otherwise dispose of, or agree to sell, lease, license, encumber or otherwise dispose of, any of its assets, other than transactions that are in the ordinary course of business and which involve assets having a current value not in excess of $5,000,000 individually or in the aggregate;
(g) increase the salary or wages payable or to become payable to its directors, officers or employees, except for increases required under employment agreements existing on the date hereof, and except for increases for officers and employees in the ordinary course of business consistent with a maturity of less than 90 days past practices; or investments in wholly-owned Subsidiaries madeenter into any employment or severance agreement with, or establish, adopt, enter into or amend, or make any grants or awards under, any bonus, profit sharing, thrift, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination or severance plan, agreement, policy or arrangement for the benefit of, any director, officer or employee, except, in each case, in the ordinary course of business consistent with past practicepractices (including those with respect to the timing and amount of, and persons entitled to, grants and awards), or purchase for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with as may be required by the Communication Assistance for Law Enforcement Act, $1,000,000), any property or assets terms of any such plan, agreement, policy or arrangement or to comply with applicable law;
(h) except as may be required as a result of a change in law or in generally accepted accounting principles, make any change in its method of accounting or its fiscal year;
(i) enter into, modify in any material respect, amend in any material respect or terminate any material contract or agreement to which the Company or any of its Subsidiaries is a party, or waive, release or assign any material rights or claims, in each case, in any manner adverse to the Company or any of its Subsidiaries;
(j) amend any term of any of its outstanding securities in any material respect;
(k) adopt a plan or agreement of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other individual material reorganization;
(l) incur, assume or entityguarantee any material Indebtedness other than pursuant to agreements in effect on the date hereof and listed in the Company Letter;
(m) create, except for inventory purchased for resale incur, assume or suffer to exist any Lien upon any of its property, assets or revenues, whether now owned or hereafter acquired, other than Liens incurred in the ordinary course of business consistent with past practiceor to secure Indebtedness or other obligations permitted by this Agreement;
(fn) create, incur, assume or suffer to exist any obligation whereby the Company or its Subsidiaries guarantees any Indebtedness, leases, dividends or other obligations of any third party;
(o) make any loan, advance or capital contributions to or investment in any Person, other than loans, advances or capital contributions to or investments in its wholly owned Subsidiaries;
(p) enter into any agreement or arrangement that materially limits or otherwise materially restricts the Company or Company, any of the its Subsidiaries or any of their respective Affiliates or successors any successor thereto or that by its terms could, after the Effective Time, limit or restrict Parent or Parent, any of its Subsidiaries, the Company Surviving Corporation or any of their respective Affiliates or any successor theretoAffiliates, from engaging in the business of providing wireless communications services or competing developing wireless communications technology anywhere in the world or otherwise from engaging in any line of business or in any geographic area;
(g) other than in the ordinary course of business consistent with past practice, waive, release or relinquish any material right;
(h) other than in the ordinary course of business consistent with past practice, modify or change in any material respect any existing material license, lease, contract, or other agreement;
(i) enter into any agreements involving aggregate expenditures or receipts of more than $100,000 individually or $500,000 in the aggregate (or, with respect to (i) any Cost of Services Contract, $1,000,000 and (ii) switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any agreements in the ordinary course of business consistent with past practice, including but not limited to installation fees and customer premise equipment, in each case, associated with new customers and in the ordinary course of business consistent with past practice;
(j) create, incur or assume, or execute any new guarantee of, any Indebtedness in excess of $100,000 in the aggregate (other than indebtedness for borrowed money owing to W or any of its Affiliates) or prepay any Indebtedness;
(k) other than pursuant to arrangements existing on the date hereof, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for obligations of any other person (other than any Subsidiary) in an amount in excess of $100,000;
(l) make any loans or advances other than (i) loans or advances to wholly-owned Subsidiaries made in the ordinary course of business consistent with past practice and (ii) routine salary, travel and expense advances to Company Employees in the ordinary course of business consistent with past practice;
(i) engage in any transaction, or enter into any contract, agreement or arrangement (other than this Agreement, the Transactions and the incurrence of indebtedness for borrowed money owing to W or any of its Affiliates and transactions pursuant to any such contract, agreement or arrangement entered into on or prior to the date hereof), with any Affiliate, (ii) engage in any transaction, or enter into any contract, agreement or arrangement, with any portfolio company of W that is not on arm's length terms and in the ordinary course of business, or (iii) amend, waive or relinquish any rights relating to any such transaction, contract, agreement or arrangement referred to in clause (i) or (ii) that will remain outstanding after the Closing in accordance with Section 8.05;
(n) authorize any new capital expenditures which, individually, are greater than $100,000 or, in the aggregate, would cause total capital expenditures for year ending December 31, 2003 to exceed $500,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any capital expenditures in the ordinary course of business consistent with past practice;
(o) split, combine or reclassify any shares of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, other than (i) cash dividends and distributions by a wholly-owned Subsidiary to the Company or to a Subsidiary all of the capital stock which is owned directly or indirectly by the Company or (ii) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms; or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its securities or any securities of the Subsidiaries;
(p) (i) increase the compensation or fringe benefits of any Company Employee (except for (x) increases in salary or wages in the ordinary course of business consistent with past practice, (y) the payment of accrued or earned but unpaid bonuses and (z) stay bonuses or similar retention payments in an amount not to exceed $10,000 with respect to any individual payment and $100,000 in the aggregate with respect to all such payments), (ii) grant any severance or termination pay to any Company Employee, (iii) loan or advance any money or other property to any Company Employee (other than routine salary, travel and expense advances to Company Employees in the ordinary course of business and consistent with past practice), (iv) establish, adopt, enter into, amend or terminate any Company Plan, collective bargaining or labor agreement 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 of this Agreement (other than as may be required by the terms of an existing Company Plan or collective bargaining agreement, or as may be required by applicable law or in order to qualify under Sections 401 and 501 of the Code), or (v) grant any equity or equity-based awards, other than in the cases of clauses (i) through (v) pursuant to commitments of the Company or any Subsidiary existing on the date hereof required by contracts set forth in Section 4.08(k) or Section 4.12 of the Company Disclosure Schedule;
(q) paysettle, discharge or satisfy propose to settle, any claimsmaterial litigation, liabilities investigation, arbitration, proceeding or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business of liabilities reflected or reserved against in the consolidated financial statements of the Company referred to in Section 4.07 or liabilities incurred in the ordinary course of businessclaim;
(r) make or change any material tax election or settle enter into any settlement or compromise of any income material tax liability;
(s) take any action, other than in the ordinary course of business consistent with past practiceas expressly permitted by this Agreement, change any method of accounting, accounting policy or accounting practice, except for any such change required by reason of a concurrent change in GAAP as concurred with by the Company's independent auditors;
(t) fail to maintain insurance coverage at presently existing levels;
(u) make any repayments of principal to W or its Affiliates in respect of any Indebtedness owed to W or its Affiliates or any payment of interest accrued in respect of such Indebtedness;
(v) agree or commit to do any of the foregoing; or
(w) knowingly take or agree or commit to take any action that would make any representation and or warranty of W or the Company hereunder inaccurate in any material respect atat the Effective Time; or
(t) enter into any contract, agreement, commitment or as arrangement to do any of any time prior to, the Closing, except for any representations or warranties that are made as of a specified dateforegoing.
Appears in 1 contract
Samples: Agreement and Plan of Reorganization (Telephone & Data Systems Inc /De/)
Covenants Relating to Conduct of Business. Section 7.016.1. Conduct Covenants of the Company, Highland Bank and First Community Bank. From During the period from the date hereof of this Agreement and continuing until the ClosingEffective Time, except as expressly contemplated or permitted by this Agreement and the Stock Option Agreement or with the prior written consent of BancorpSouth, the Company Company, Highland Bank, First Community Bank and the their Subsidiaries shall conduct carry on their business respective businesses in the ordinary course consistent with past practice in compliance with all applicable laws and shall use their reasonable best efforts to preserve intact their business organizations and relationships with third parties and to keep available the services of their present officers and employeespractice. Without limiting the generality of the foregoing, from the date hereof until the Closing and except as expressly contemplated by this Agreement or the other Transaction Agreements, as may result from the consummation of the Transactions, as set forth in Section 7.01 6.1 of the Company Disclosure Schedule, Schedule or as otherwise contemplated by this Agreement and the Stock Option Agreement or as consented to in writing by Parent (except if such consent would be inconsistent with applicable law), such consent not to be unreasonably withheld with respect to the granting of IRUs in fiber and/or conduit by the Company or the SubsidiariesBancorpSouth, the Company Company, Highland Bank or First Community Bank shall not, and shall not and shall cause the permit any of their Subsidiaries not to:
(a) adopt declare or propose pay any change dividends on, or make other distributions in respect of any of its articles capital stock during any period, at a rate that is inconsistent with its past practice or in excess of incorporation, bylaws the rate of its most recent dividend or other organizational documentsdistribution prior to the date hereof;
(bi) repurchase, redeem or otherwise acquire (except for the acquisition of Trust Account Shares and DPC Shares, as such terms are defined in Section 1.4(b) hereof) any shares of the capital stock of the Company, Highland Bank, First Community Bank or any of their Subsidiaries, or any securities convertible into or exercisable for any shares of the capital stock of the Company, Highland Bank, First Community Bank or any of their Subsidiaries, (ii) split, combine or reclassify any shares of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, or (iii) issue, deliver, deliver or sell, pledge or transfer or authorize or propose the issuance, deliverydelivery or sale of, sale, pledge or transfer of any shares of its capital stock of any class or any securities convertible into or exercisable for, or any rights, warrants, warrants or options or other rights to acquire, any such shares shares, or enter into any agreement with respect to any of the foregoing other than foregoing, except, in the case of clauses (iii) and (iii), for the issuance of Company Common Stock, Highland Common Stock or First Community Common Stock upon the exercise or fulfillment of stock rights or options issued or warrantsexisting pursuant to (A) employee benefit plans, programs or conversion of Preferred Stockarrangements, all to the extent outstanding and in existence on the date hereof of this Agreement and in accordance with their present terms, terms or (ii) as required by Contracts in effect as of the date of this Agreement that are listed in Section 4.05 of the Company Disclosure Schedule and (iiiB) the issuance of capital stock of the Company as a dividend in respect of Preferred Stock outstanding on the date hereof in accordance with its present termsOption Agreement;
(ic) acquire (by mergeramend its Articles of Incorporation, consolidation or acquisition of stock or assets) any corporation, partnership Bylaws or other business organization or division thereof, (ii) sell, lease or otherwise dispose of a Subsidiary or (iii) sell, lease or otherwise dispose of an amount of assets or securities, including IRUs, for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), except for transactions in the ordinary course consistent with past practicesimilar governing documents;
(d) merge authorize or consolidate permit any of its officers, directors, employees or agents to directly or indirectly solicit, initiate, facilitate or encourage any inquiries relating to, or the making of any proposal which constitutes, a "takeover proposal" (as defined below), or participate in any discussions or negotiations, or provide third parties with any other Person;
(e) nonpublic information, relating to any such inquiry or proposal or otherwise facilitate any effort or attempt to make a takeover proposal; provided, however, that the Company, Highland Bank and First Community Bank may communicate information about any investment, whether by purchase of stock or securities, contributions such takeover proposal to capital or any property transfer (other than investments in cash or cash equivalents with a maturity of less than 90 days or investments in wholly-owned Subsidiaries made, in each caseits respective shareholders if, in the ordinary course judgment of business consistent the Company's, Highland Bank's or First Community Bank's respective Boards of Directors, based upon the advice of outside counsel, such communication is required under applicable law, provided further, however, that the Company, Highland Bank and First Community Bank may, and may authorize and permit its officers, directors, employees or agents to, (i) provide or cause to be provided such information, and (ii) participate in such discussions or negotiations, if the respective Boards of Directors of the Company, Highland Bank or First Community Bank after having consulted with past practice)and considered the advice of outside counsel, has determined that the failure to do so could cause the members of such Board of Directors to breach their fiduciary duties under applicable laws. The Company, Highland Bank and First Community Bank will immediately cease and cause to be terminated any existing activities, discussions or purchase for an amount in excess of $100,000 (or, negotiations previously conducted with any parties other than BancorpSouth with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), any property or assets of any other individual or entity, except for inventory purchased for resale in the ordinary course of business consistent with past practice;
(f) enter into any agreement or arrangement that limits or otherwise restricts the Company or any of the Subsidiaries foregoing. The Company, Highland Bank and First Community Bank will take all actions necessary or advisable to inform the appropriate individuals or entities referred to in the first sentence hereof of the obligations undertaken in this Section 6.1(d). The Company, Highland Bank and First Community Bank will notify BancorpSouth immediately if any such inquiries or takeover proposals are received by, any such information is requested from, or any such negotiations or discussions are sought to be initiated or continued with, the Company, Highland Bank or First Community Bank, as applicable, and the Company, Highland Bank and First Community Bank will promptly (within 24 hours) inform BancorpSouth in writing of all of the relevant details with respect to the foregoing including the material terms and conditions of such request or takeover proposal and the identity of the person or group making such request or proposal. The Company, Highland Bank and First Community Bank will keep BancorpSouth fully informed of the status and details (including amendments or proposed amendments) of any such request or takeover proposal. As used in this Agreement, "takeover proposal" shall mean any tender or exchange offer, proposal for a merger, consolidation or other business combination involving the Company, Highland Bank, First Community Bank or any of their respective Affiliates Subsidiaries or successors thereto any proposal or that by its terms couldoffer to acquire in any manner a substantial equity interest in, after or a substantial portion of the Effective Timeassets of, limit or restrict Parent or the Company Company, Highland Bank, First Community Bank or any of their respective Affiliates or any successor thereto, from engaging or competing in any line of business or in any geographic area;
(g) other than in the ordinary course of business consistent with past practice, waive, release or relinquish any material right;
(h) other than in the ordinary course of business consistent with past practice, modify or change in any material respect any existing material license, lease, contract, or other agreement;
(i) enter into any agreements involving aggregate expenditures or receipts of more than $100,000 individually or $500,000 in the aggregate (or, with respect to (i) any Cost of Services Contract, $1,000,000 and (ii) switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any agreements in the ordinary course of business consistent with past practice, including but not limited to installation fees and customer premise equipment, in each case, associated with new customers and in the ordinary course of business consistent with past practice;
(j) create, incur or assume, or execute any new guarantee of, any Indebtedness in excess of $100,000 in the aggregate (other than indebtedness for borrowed money owing to W or any of its Affiliates) or prepay any Indebtedness;
(k) other than pursuant to arrangements existing on the date hereof, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for obligations of any other person (other than any Subsidiary) in an amount in excess of $100,000;
(l) make any loans or advances other than (i) loans or advances to wholly-owned Subsidiaries made in the ordinary course of business consistent with past practice and (ii) routine salary, travel and expense advances to Company Employees in the ordinary course of business consistent with past practice;
(i) engage in any transaction, or enter into any contract, agreement or arrangement (other than this Agreement, the Transactions and the incurrence of indebtedness for borrowed money owing to W or any of its Affiliates and transactions pursuant to any such contract, agreement or arrangement entered into on or prior to the date hereof), with any Affiliate, (ii) engage in any transaction, or enter into any contract, agreement or arrangement, with any portfolio company of W that is not on arm's length terms and in the ordinary course of business, or (iii) amend, waive or relinquish any rights relating to any such transaction, contract, agreement or arrangement referred to in clause (i) or (ii) that will remain outstanding after the Closing in accordance with Section 8.05;
(n) authorize any new capital expenditures which, individually, are greater than $100,000 or, in the aggregate, would cause total capital expenditures for year ending December 31, 2003 to exceed $500,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any capital expenditures in the ordinary course of business consistent with past practice;
(o) split, combine or reclassify any shares of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, other than (i) cash dividends and distributions by a wholly-owned Subsidiary to the Company or to a Subsidiary all of the capital stock which is owned directly or indirectly by the Company or (ii) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms; or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its securities or any securities of the Subsidiaries;
(p) (i) increase the compensation or fringe benefits of any Company Employee (except for (x) increases in salary or wages in the ordinary course of business consistent with past practice, (y) the payment of accrued or earned but unpaid bonuses and (z) stay bonuses or similar retention payments in an amount not to exceed $10,000 with respect to any individual payment and $100,000 in the aggregate with respect to all such payments), (ii) grant any severance or termination pay to any Company Employee, (iii) loan or advance any money or other property to any Company Employee (other than routine salary, travel and expense advances to Company Employees in the ordinary course of business and consistent with past practice), (iv) establish, adopt, enter into, amend or terminate any Company Plan, collective bargaining or labor agreement 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 of this Agreement (other than as may be required by the terms of an existing Company Plan or collective bargaining agreement, or as may be required by applicable law or in order to qualify under Sections 401 and 501 of the Code), or (v) grant any equity or equity-based awards, other than in the cases of clauses (i) through (v) pursuant to commitments of the Company or any Subsidiary existing on the date hereof required by contracts set forth in Section 4.08(k) or Section 4.12 of the Company Disclosure Schedule;
(q) pay, discharge or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge transactions contemplated or satisfaction in the ordinary course of business of liabilities reflected or reserved against in the consolidated financial statements of the Company referred to in Section 4.07 or liabilities incurred in the ordinary course of business;
(r) make or change any tax election or settle or compromise any income tax liability;
(s) other than in the ordinary course of business consistent with past practice, change any method of accounting, accounting policy or accounting practice, except for any such change required permitted by reason of a concurrent change in GAAP as concurred with by the Company's independent auditors;
(t) fail to maintain insurance coverage at presently existing levels;
(u) make any repayments of principal to W or its Affiliates in respect of any Indebtedness owed to W or its Affiliates or any payment of interest accrued in respect of such Indebtedness;
(v) agree or commit to do any of the foregoing; or
(w) knowingly take or agree or commit to take any action that would make any representation and warranty of W this Agreement or the Company hereunder inaccurate in any material respect at, or as of any time prior to, the Closing, except for any representations or warranties that are made as of a specified date.Stock Option Agreement;
Appears in 1 contract
Samples: Merger Agreement (Bancorpsouth Inc)
Covenants Relating to Conduct of Business. Section 7.01. Conduct of (a) Except for matters set forth in the Company. From Company Disclosure Letter or otherwise expressly permitted by this Agreement, from the date hereof until of this Agreement to the Closing, Seller shall, and shall cause the Company and Lane to, use its reasonable best efforts to conduct the Subsidiaries shall conduct their business of the Company and Lane in the usual, regular and ordinary course consistent with past practice in compliance with all applicable laws and shall and, to the extent consistent therewith, use their its reasonable best efforts to preserve intact their its current business organizations and relationships with third parties and to organization, keep available the services of their present its current officers and employeesemployees and keep its relationships with customers, suppliers, licensors, licensees, distributors and others having business dealings with them (provided that nothing in this Section 5.01 shall be construed to limit the ability of Lane and the Company to pay cash dividends on or prior to the Closing). Without In addition, and without limiting the generality of the foregoing, except for matters set forth in the Company Disclosure Letter or otherwise expressly permitted by this Agreement, from the date hereof until the Closing and except as expressly contemplated by of this Agreement or the other Transaction Agreements, as may result from the consummation of the Transactions, as set forth in Section 7.01 of the Company Disclosure Schedule, or as otherwise consented to in writing by Parent (except if such consent would be inconsistent with applicable law), such consent not to be unreasonably withheld with respect to the granting of IRUs in fiber and/or conduit by the Company or the SubsidiariesClosing, the Company shall not not, and shall cause not permit Lane to, do any of the Subsidiaries not tofollowing:
(a) adopt or propose any change in its articles of incorporation, bylaws or other organizational documents;
(bi) issue, deliver, sellsell or grant (or become obligated to issue, pledge deliver, sell or transfer or authorize or propose the issuance, delivery, sale, pledge or transfer of grant) (A) any shares of its capital stock of the Company or Lane, (B) any class equity, voting or other ownership interests in the Company or Lane, (C) any securities convertible into or exercisable exchangeable for, or any rightsoptions, warrants, options warrants or other rights to acquire, any such shares shares, equity, voting or enter into other ownership interests or convertible or exchangeable securities, (D) any agreement with respect "phantom stock", "phantom stock" rights, stock appreciation rights ("SARs") or stock-based performance units relating to the foregoing other than Company or Lane or (iE) the issuance of Company Common Stock upon exercise of stock options or any options, warrants, rights, securities, units, commitments, Contracts, arrangements or conversion undertakings of Preferred Stock, outstanding on any kind that give any person the date hereof in accordance with their present terms, (ii) as required by Contracts in effect as of right to receive any economic benefit or rights similar to or derived from the date of this Agreement that are listed in Section 4.05 of the Company Disclosure Schedule economic benefits and (iii) the issuance rights accruing to holders of capital stock of the Company as a dividend in respect of Preferred Stock outstanding on the date hereof in accordance with its present termsor Lane;
(iii) amend the certificate of incorporation, by-laws or other comparable charter or organizational documents of the Company or Lane;
(iii) acquire or agree to acquire (A) by mergermerging or consolidating with, consolidation or acquisition by purchasing a substantial equity interest in or portion of stock the assets of, or assets) by any other manner, any business or any corporation, partnership partnership, joint venture, association or other business organization or division thereof, (ii) sell, lease or otherwise dispose of a Subsidiary thereof or (iiiB) sellany assets that are material, lease individually or otherwise dispose of an amount of assets or securitiesin the aggregate, including IRUsto the Company and Lane, for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000)taken as a whole, except for transactions in the ordinary course consistent with past practice;
(d) merge or consolidate with any other Person;
(e) make any investment, whether by purchase purchases of stock or securities, contributions to capital or any property transfer (other than investments in cash or cash equivalents with a maturity of less than 90 days or investments in wholly-owned Subsidiaries made, in each case, in the ordinary course of business consistent with past practice), or purchase for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), any property or assets of any other individual or entity, except for inventory purchased for resale in the ordinary course of business consistent with past practice;
(fiv) enter into any agreement or arrangement that limits or otherwise restricts the Company except as required to comply with applicable Law or any Contract, Lane Benefit Plan or Lane Benefit Agreement in effect on the date of the Subsidiaries or any of their respective Affiliates or successors thereto or that by its terms couldthis Agreement, after the Effective Time, limit or restrict Parent or the Company or any of their respective Affiliates or any successor thereto, from engaging or competing (A) increase in any line of business manner the compensation or in benefits of, or pay any geographic area;
(g) other than bonus to, any Company Personnel, except for increases or bonuses in the ordinary course of business consistent with past practice, waive, release or relinquish (B) pay to any Company Personnel any material right;
(h) benefit not provided for under any Contract, Lane Benefit Plan or Lane Benefit Agreement in effect on the date of this Agreement other than the payment of base compensation (inclusive of overtime, commissions, incentive pay and the like) in the ordinary course of business consistent with past practice, modify (C) take any action to fund or change in any material respect other way secure the payment of compensation or benefits under any existing material license, lease, contract, or other agreement;
(i) enter into any agreements involving aggregate expenditures or receipts of more than $100,000 individually or $500,000 in the aggregate (or, with respect to (i) any Cost of Services Contract, $1,000,000 and (ii) switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement ActLane Benefit Plan or Lane Benefit Agreement, $1,000,000), other than any agreements except in the ordinary course of business consistent with past practice, including but not limited (D) take any action to installation fees accelerate the vesting or payment of any compensation or benefit under any Contract, Lane Benefit Plan or Lane Benefit Agreement, (E) adopt, enter into, amend or terminate any Lane Benefit Plan or Lane Benefit Agreement, except in the ordinary course of business consistent with past practice, or (F) make any material determination under any Lane Benefit Plan or Lane Benefit Agreement that is inconsistent with the ordinary course of business or past practice;
(v) make any change in accounting methods, principles or practices materially affecting the reported consolidated assets, liabilities or results of operations of the Company and customer premise equipmentLane, except insofar as may have been required by a change in each caseGAAP;
(vi) sell, associated with new customers lease (as lessor), license or otherwise dispose of any properties or assets, except sales of inventory and excess or obsolete assets in the ordinary course of business consistent with past practice;
(jvii) create, (A) incur or assume, or execute any new guarantee of, any Indebtedness in excess of $100,000 in the aggregate (other than indebtedness for borrowed money owing or assume or guarantee any such indebtedness of another person, issue or sell any debt securities or warrants or other rights to W acquire any debt securities of the Company or Lane, assume or 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 its Affiliatesthe foregoing, except for (1) short-term borrowings incurred in the ordinary course of business consistent with past practice or prepay any Indebtedness;
(k2) other than pursuant to arrangements existing on the date hereof, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for obligations of any other person (other than any Subsidiary) indebtedness in an aggregate principal amount in excess of $100,000;
not to exceed U.S.$2,000,000 or (lB) make any loans loans, advances or advances capital contributions to, or investments in, any other person, other than (i1) loans to or advances to wholly-owned Subsidiaries made in the Company or Lane, (2) extensions of trade credit in the ordinary course of business consistent with past practice and (ii3) routine salary, in respect of travel and expense advances to Company Employees in the ordinary course of business consistent with past practice;
(i) engage in any transaction, or enter into any contract, agreement or arrangement (other than this Agreement, the Transactions and the incurrence of indebtedness for borrowed money owing to W or any of its Affiliates and transactions pursuant to any such contract, agreement or arrangement entered into on or prior to the date hereof), with any Affiliate, (ii) engage in any transaction, or enter into any contract, agreement or arrangement, with any portfolio company of W that is not on arm's length terms and expenses in the ordinary course of business, or (iii) amend, waive or relinquish any rights relating to any such transaction, contract, agreement or arrangement referred to in clause (i) or (ii) that will remain outstanding after the Closing in accordance with Section 8.05;
(nviii) authorize make or agree to make any new capital expenditure or expenditures which, individually, are greater than $100,000 orthat, in the aggregate, would cause total capital expenditures for year ending December 31, 2003 to exceed $500,000 (or, with respect to switch software upgrades for purposes are in excess of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any capital expenditures in the ordinary course of business consistent with past practiceU.S.$2,000,000;
(oix) split, combine make any material Tax election or reclassify settle or compromise any shares of its capital stock; declare, set aside material Tax liability or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, other than (i) cash dividends and distributions by a wholly-owned Subsidiary to the Company or to a Subsidiary all of the capital stock which is owned directly or indirectly by the Company or (ii) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms; or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its securities or any securities of the Subsidiariesrefund;
(p) (i) increase the compensation or fringe benefits of any Company Employee (except for (x) increases in salary or wages in the ordinary course of business consistent with past practice, (y) the payment of accrued or earned but unpaid bonuses and (z) stay bonuses or similar retention payments in an amount not to exceed $10,000 with respect to any individual payment and $100,000 in the aggregate with respect to all such payments), (ii) grant any severance or termination pay to any Company Employee, (iii) loan or advance any money or other property to any Company Employee (other than routine salary, travel and expense advances to Company Employees in the ordinary course of business and consistent with past practice), (iv) establish, adopt, enter into, amend or terminate any Company Plan, collective bargaining or labor agreement 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 of this Agreement (other than as may be required by the terms of an existing Company Plan or collective bargaining agreement, or as may be required by applicable law or in order to qualify under Sections 401 and 501 of the Code), or (v) grant any equity or equity-based awards, other than in the cases of clauses (i) through (v) pursuant to commitments of the Company or any Subsidiary existing on the date hereof required by contracts set forth in Section 4.08(k) or Section 4.12 of the Company Disclosure Schedule;
(qA) pay, settle, discharge or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, settlement, discharge or satisfaction satisfaction, in the ordinary course of business consistent with past practice or in accordance with their terms as in effect on the date of liabilities reflected or reserved against in the consolidated financial statements this Agreement, of the Company referred to in Section 4.07 or liabilities incurred in the ordinary course of businessbusiness or reflected or reserved against in, or contemplated by, the Unaudited Historical Financial Statements (or the notes thereto) or incurred since the date of such statements in the ordinary course of business consistent with past practice, (B) cancel any material indebtedness (individually or in the aggregate) or waive any claims or rights of substantial value or (C) waive, fail to enforce the benefits of, or agree to modify in any manner, any confidentiality, standstill or similar agreement to which the Company or Lane is a party;
(r) make or change any tax election or settle or compromise any income tax liability;
(sxi) other than in the ordinary course of business consistent with past practice, change enter into or modify or otherwise amend in any method material respect any Contract that contains any provision that materially restricts the ability of accountingthe Company or Lane or which, accounting policy following the consummation of the Acquisition, could restrict the ability of Reynolds American or accounting practice, except for any such change required by reason of a concurrent change its subsidiaries or any of their xxxxxxxive affiliates to compete in GAAP as concurred any business or with by the Company's independent auditorsany person or in any geographic area;
(txii) fail to maintain insurance coverage at presently existing levelsenter into any material joint venture, partnership or other similar arrangement;
(uxiii) make any repayments material changes to its practices relating to the collection of principal to W accounts receivable, acquisition or its Affiliates in respect disposition of any Indebtedness owed to W inventory or its Affiliates or any payment of interest accrued accounts payable, other than in respect the ordinary course of such Indebtedness;
(v) agree or commit to do any of the foregoingbusiness consistent with past practice; or
(wxiv) knowingly take authorize any of, or commit or agree or commit to take any action that would make any representation and warranty of W or the Company hereunder inaccurate in any material respect at, or as of any time prior toof, the Closing, except for any representations or warranties that are made as of a specified dateforegoing actions.
Appears in 1 contract
Samples: Stock Purchase Agreement (Rj Reynolds Tobacco Holdings Inc)
Covenants Relating to Conduct of Business. Section 7.01. 6.1 Conduct of Business by the CompanyCompany Pending the Merger. From Except as otherwise expressly contemplated by this Agreement or as described in the Company Disclosure Letter, during the period from the date hereof until of this Agreement through the ClosingEffective Time, the Company shall, and shall cause its Subsidiaries to, in all material respects carry on their respective businesses in, and not enter into any material transaction other than in accordance with, the Subsidiaries shall conduct their business in the regular and ordinary course and, to the extent consistent with past practice in compliance with all applicable laws and shall therewith, use their its reasonable best efforts to preserve intact their current business organizations and relationships with third parties and to organizations, keep available the services of their present current officers and employeesemployees and preserve their relationships with customers, suppliers and others having business dealings with them. Without limiting the generality of the foregoing, from the date hereof until the Closing and and, except as otherwise expressly contemplated by this Agreement or the other Transaction Agreements, as may result from the consummation of the Transactions, as set forth described in Section 7.01 of the Company Disclosure Schedule, or as otherwise consented to in writing by Parent (except if such consent would be inconsistent with applicable law), such consent not to be unreasonably withheld with respect to the granting of IRUs in fiber and/or conduit by the Company or the SubsidiariesLetter, the Company shall not not, and shall cause not permit any of its Subsidiaries to, without the Subsidiaries not toprior written consent of Parent:
(a) adopt (x) declare, set aside or propose pay any change dividends on, or make any other actual, constructive or deemed distributions in respect of, any of its articles capital stock, or otherwise make any payments to stockholders of incorporationthe Company in their capacity as such, bylaws other than (1) dividends declared prior to the date of this Agreement, and (2) dividends payable to the Company declared by any of the Company's Subsidiaries, (y) 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 (z) 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 organizational documentssecurities;
(b) issue, deliver, sell, pledge pledge, dispose of or transfer or authorize or propose the issuance, delivery, sale, pledge or transfer of otherwise encumber any shares of its capital stock of stock, any class other voting securities or equity equivalent or any securities convertible into or exercisable forinto, or any rights, warrants, warrants or options or other rights to acquire, any such shares shares, voting securities or enter into any agreement with respect to convertible securities or equity equivalent (other than, in the foregoing other than (i) case of the Company, the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on during the date hereof in accordance with their present terms, (ii) as required by Contracts in effect as of period from the date of this Agreement that are listed through the Effective Time upon the exercise of Company Stock Options outstanding (as set forth in Section 4.05 of the Company Disclosure Schedule and (iii4.2) the issuance of capital stock of the Company as a dividend in respect of Preferred Stock outstanding on the date hereof of this Agreement in accordance with its present their current terms;
(ic) amend its charter or bylaws;
(d) acquire (or agree to acquire by mergermerging or consolidating with, consolidation or acquisition by purchasing a substantial portion of stock the assets of or assets) equity in, or by any other manner, any business or any corporation, partnership partnership, association or other business organization or division thereofthereof or otherwise acquire or agree to acquire any assets, in each case that are material, individually or in the aggregate, to the Company and its Subsidiaries taken as a whole;
(iie) sell, lease or otherwise dispose of a Subsidiary or (iii) agree to sell, lease or otherwise dispose of, any of an amount its assets that are material, individually or in the aggregate, to the Company and its Subsidiaries taken as a whole;
(f) incur any indebtedness for borrowed money or guarantee any such indebtedness or issue or sell any debt securities or guarantee any debt securities of assets or securities, including IRUs, for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000)others, except for transactions in the ordinary course consistent with past practice;
(d) merge borrowings or consolidate with any other Person;
(e) make any investment, whether by purchase of stock or securities, contributions to capital or any property transfer (other than investments in cash or cash equivalents with a maturity of less than 90 days or investments in wholly-owned Subsidiaries made, in each case, guarantees incurred in the ordinary course of business consistent with past practice), or purchase for an amount in excess of $100,000 (ormake any loans, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Actadvances or capital contributions to, $1,000,000)or investments in, any property other person, other than to the Company or assets any wholly owned Subsidiary of any the Company and other individual or entity, except for inventory purchased for resale than in the ordinary course of business consistent with past practice;
(fg) alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any Subsidiary of the Company;
(h) enter into or adopt or amend any existing severance plan, agreement or arrangement that limits or otherwise restricts the Company or any of the Subsidiaries or any of their respective Affiliates or successors thereto or that by its terms couldor, after the Effective Time, limit or restrict Parent or the Company or any of their respective Affiliates or any successor thereto, from engaging or competing in any line of business or in any geographic area;
(g) other than in the ordinary course of business, enter into or amend any employee benefit plan (including without limitation, the Stock Plan) or employment or consulting agreement except (x) as permitted by Section 7.11 or (y) with respect to employees that are not executive officers or directors, compensation increases associated with promotions and regular reviews in the ordinary course of business consistent with past practice, waive, release or relinquish any material right;
(h) other than in the ordinary course of business consistent with past practice, modify or change in any material respect any existing material license, lease, contract, or other agreement;practices; or
(i) enter into any agreements involving aggregate expenditures or receipts of more than $100,000 individually or $500,000 in the aggregate (or, with respect to (i) any Cost of Services Contract, $1,000,000 and (ii) switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any agreements in the ordinary course of business consistent with past practice, including but not limited to installation fees and customer premise equipment, in each case, associated with new customers and in the ordinary course of business consistent with past practice;
(j) create, incur or assume, or execute any new guarantee of, any Indebtedness in excess of $100,000 in the aggregate (other than indebtedness for borrowed money owing to W or any of its Affiliates) or prepay any Indebtedness;
(k) other than pursuant to arrangements existing on the date hereof, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for obligations of any other person (other than any Subsidiary) in an amount in excess of $100,000;
(l) make any loans or advances other than (i) loans or advances to wholly-owned Subsidiaries made in the ordinary course of business consistent with past practice and (ii) routine salary, travel and expense advances to Company Employees in the ordinary course of business consistent with past practice;
(i) engage in any transaction, or enter into any contract, agreement or arrangement (other than this Agreement, the Transactions and the incurrence of indebtedness for borrowed money owing to W or any of its Affiliates and transactions pursuant to any such contract, agreement or arrangement entered into on or prior to the date hereof), with any Affiliate, (ii) engage in any transaction, or enter into any contract, agreement or arrangement, with any portfolio company of W that is not on arm's length terms and in the ordinary course of business, or (iii) amend, waive or relinquish any rights relating to any such transaction, contract, agreement or arrangement referred to in clause (i) or (ii) that will remain outstanding after the Closing in accordance with Section 8.05;
(n) authorize any new capital expenditures which, individually, are greater than $100,000 or, in the aggregate, would cause total capital expenditures for year ending December 31, 2003 to exceed $500,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any capital expenditures in the ordinary course of business consistent with past practice;
(o) split, combine or reclassify any shares of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, other than (i) cash dividends and distributions by a wholly-owned Subsidiary to the Company or to a Subsidiary all of the capital stock which is owned directly or indirectly by the Company or (ii) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms; or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its securities or any securities of the Subsidiaries;
(p) (i) increase the compensation or fringe benefits of any Company Employee (except for (x) increases in salary or wages in the ordinary course of business consistent with past practice, (y) the payment of accrued or earned but unpaid bonuses and (z) stay bonuses or similar retention payments in an amount not to exceed $10,000 with respect to any individual payment and $100,000 in the aggregate with respect to all such payments), (ii) grant any severance or termination pay to any Company Employee, (iii) loan or advance any money or other property to any Company Employee (other than routine salary, travel and expense advances to Company Employees in the ordinary course of business and consistent with past practice), (iv) establish, adopt, enter intowaive, amend or terminate allow to lapse any term or condition of any confidentiality or "standstill" agreement to which the Company Plan, collective bargaining or labor agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be is a Company Plan if it were in existence as of party. During the period from the date of this Agreement through the Effective Time,
(other than i) as requested by Parent, the Company shall confer on a regular basis with one or more representatives of Parent with respect to material operational matters; (ii) the Company shall, within 20 days following each fiscal month, deliver to Parent financial statements, including an income statement and balance sheet for such month, together with a statement reconciling differences between the projected results of operations for such month set forth in the applicable Monthly Plan and the actual results of operations set forth in the financial statements delivered pursuant to this clause (ii); and (iii) upon the knowledge of the Company of any Material Adverse Change on the Company, any material litigation or material governmental complaints, investigations or hearings (or communications indicating that the same may be required by the terms of an existing Company Plan or collective bargaining agreement, or as may be required by applicable law or in order to qualify under Sections 401 and 501 of the Codecontemplated), or (v) grant any equity or equity-based awards, other than in the cases of clauses (i) through (v) pursuant to commitments of the Company or any Subsidiary existing on the date hereof required by contracts set forth in Section 4.08(k) or Section 4.12 of the Company Disclosure Schedule;
(q) pay, discharge or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business of liabilities reflected or reserved against in the consolidated financial statements of the Company referred to in Section 4.07 or liabilities incurred in the ordinary course of business;
(r) make or change any tax election or settle or compromise any income tax liability;
(s) other than in the ordinary course of business consistent with past practice, change any method of accounting, accounting policy or accounting practice, except for any such change required by reason of a concurrent change in GAAP as concurred with by the Company's independent auditors;
(t) fail to maintain insurance coverage at presently existing levels;
(u) make any repayments of principal to W or its Affiliates in respect of any Indebtedness owed to W or its Affiliates or any payment of interest accrued in respect of such Indebtedness;
(v) agree or commit to do any of the foregoing; or
(w) knowingly take or agree or commit to take any action that would make any representation and warranty of W or the Company hereunder inaccurate breach in any material respect at, or as of any time prior torepresentation or warranty contained herein, the Closing, except for any representations or warranties that are made as of a specified dateCompany shall promptly notify Parent thereof.
Appears in 1 contract
Samples: Tender Offer Statement
Covenants Relating to Conduct of Business. (a) Except for matters set forth in Section 7.01. Conduct 5.1 of the Company. From Partnership Disclosure Schedule or otherwise expressly permitted or required by the terms of this Agreement or except as required by Applicable Law, from the date hereof until of this Agreement to the Closing, the Company and the Subsidiaries Partnership shall conduct their business its Business in the ordinary course consistent with past practice in compliance with all applicable laws Ordinary Course of Business and shall use their reasonable best efforts to preserve keep intact their business organizations and relationships with third parties and to its Business, keep available the services of their present officers its general partner, employees and agents and maintain its relations and good will, preserve its relationships with patients, doctors, customers, suppliers, licensors, licensees, distributors landlords, creditors, employees, agents and others having business relationships with it. Without The Partnership shall not take any action that would result in any of the conditions to the purchase and sale of the Partnership Interests set forth in Article VI not being satisfied. In addition (and without limiting the generality of the foregoing), from the date hereof until the Closing and except as expressly contemplated by this Agreement or the other Transaction Agreements, as may result from the consummation of the Transactions, as set forth in Section 7.01 5.1 of the Company Partnership Disclosure ScheduleSchedule or otherwise expressly permitted or required by the terms of this Agreement or except as required by Applicable Law, or as otherwise consented to in writing by Parent the Partnership shall not do any of the following without the prior written consent of Purchaser (except if such which consent would be inconsistent with applicable law), such consent may not to be unreasonably withheld with respect to the granting of IRUs in fiber and/or conduit by the Company or the Subsidiaries, the Company shall not and shall cause the Subsidiaries not to:withheld):
(ai) adopt amend its certificate of limited partnership or propose any change in its articles of incorporation, bylaws or other organizational documentslimited partnership agreement;
(bii) issue, deliver, sell, pledge declare or transfer pay any dividend or authorize make any other distribution to its partners whether or propose the issuance, delivery, sale, pledge not upon or transfer in respect of any shares of its capital stock of partnership interests or other equity interest;
(iii) issue any class units, partnership interests, or other equity interest or any option, warrant or right relating thereto or any securities convertible into or exercisable forexchangeable for any partnership interests in the Partnership or other equity interest;
(iv) adopt or amend any Partnership Benefit Plan (or any plan that would be a Partnership Benefit Plan if adopted) or enter into, adopt, extend (beyond the Closing Date), renew or amend any collective bargaining agreement or other Contract with any labor organization, union or association;
(v) except for the matters set forth in Section 5.1 of the Partnership Disclosure Schedule, establish or adopt any employee benefit plan or make any profit-sharing or similar payment to any of its directors, officers, employees or independent contractors;
(vi) pay any bonus, increase the amount of the wages, salary, commissions, fees, fringe benefits or other compensation or remuneration payable to, any of its partners, employees or independent contractors, except for any items not in excess of $500 individually or $5,000 in the aggregate;
(vii) incur or assume any Liabilities, obligations or Indebtedness for borrowed money or guarantee any such Liabilities, obligations or Indebtedness, other than in the Ordinary Course of Business;
(viii) permit, allow or suffer any of its assets to become subjected to any Lien (other than Permitted Liens) of any nature whatsoever that is not set forth on Section 3.6 of the Partnership Disclosure Schedule and would have been required to be set forth in Section 3.6 or 3.7 of the Partnership Disclosure Schedule if existing on the date of this Agreement;
(ix) pay, loan or advance any amount to, or sell, transfer or lease any rightsof its assets to, warrants, options or other rights to acquire, any such shares or enter into any agreement with respect or arrangement with, any of the Sellers or any Affiliates of any of the Sellers, except for the matters set forth in Section 5.1 of the Partnership Disclosure Schedule;
(x) make any change in any method of accounting or accounting practice or policy other than those required by GAAP;
(xi) acquire by merging or consolidating with, or by purchasing a substantial portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or otherwise acquire any assets (other than inventory) that are material;
(xii) make or incur capital expenditures that are not currently budgeted and that, in the aggregate, are in excess of $5,000;
(xiii) sell, lease, license or otherwise dispose of any of its assets that are material, individually or in the aggregate, to the foregoing other than Partnership, except inventory sold in the Ordinary Course of Business;
(ixiv) the issuance enter into any lease of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms, real property;
(iixv) as required by Contracts terminate any insurance policy in effect as of the date of this Agreement that are listed hereof or allow any material insurance policy to be terminated, in Section 4.05 of either case without using reasonable efforts to obtain a replacement insurance policy on comparable terms to the Company Disclosure Schedule and (iii) the issuance of capital stock of the Company as a dividend in respect of Preferred Stock outstanding on the date hereof in accordance with its present termsPartnership;
(ixvi) form any subsidiary or acquire the equity of any Person;
(xvii) commence or settle any Proceeding;
(xviii) enter into any Contract, transaction or take any other action outside the Ordinary Course of Business;
(xix) enter into any transaction or take any other action that the Partnership knows will cause or constitute a breach of any representation or warranty made by mergerthe Partnership, consolidation the physician owners of the PSHS Seller or acquisition any of stock the Sellers in this Agreement;
(xx) discontinue the payment of its accounts payable that are payable in the Ordinary Course of Business or assetsdeviate from or alter any of its practices, policies or procedures in paying accounts payable other than in the Ordinary Course of Business;
(xxi) make any corporationmaterial modification to any material Contract or Permit; and
(xxii) make or change any election, partnership change an annual accounting period, adopt or change any accounting method, file any amended Tax Return, enter into any closing agreement, settle any Tax claim or assessment relating to the Partnership, surrender any right to claim a refund of Taxes, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Partnership or take other similar action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other business organization action would or division thereof, (ii) sell, lease or otherwise dispose could be reasonably expected to increase any Tax liability of a Subsidiary or (iii) sell, lease or otherwise dispose of an amount of assets or securities, including IRUs, for the Partnership by an amount in excess of $100,000 2,000 for any period ending after the Closing Date; and
(orxxiii) agree, with respect commit or offer (in writing or otherwise) to switch software upgrades for purposes take any of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000actions described in clauses “(i)” through “(xxii)” of this Section 5.1.
(b) In addition (and without limiting the generality of the foregoing), except for transactions as set forth in Section 5.1 of the ordinary course consistent with past practice;
(d) merge or consolidate with any other Person;
(e) make any investment, whether by purchase of stock or securities, contributions to capital or any property transfer (other than investments in cash or cash equivalents with a maturity of less than 90 days or investments in wholly-owned Subsidiaries made, in each case, in the ordinary course of business consistent with past practice), or purchase for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), any property or assets of any other individual or entity, except for inventory purchased for resale in the ordinary course of business consistent with past practice;
(f) enter into any agreement or arrangement that limits Partnership Disclosure Schedule or otherwise restricts the Company expressly permitted or any of the Subsidiaries or any of their respective Affiliates or successors thereto or that by its terms could, after the Effective Time, limit or restrict Parent or the Company or any of their respective Affiliates or any successor thereto, from engaging or competing in any line of business or in any geographic area;
(g) other than in the ordinary course of business consistent with past practice, waive, release or relinquish any material right;
(h) other than in the ordinary course of business consistent with past practice, modify or change in any material respect any existing material license, lease, contract, or other agreement;
(i) enter into any agreements involving aggregate expenditures or receipts of more than $100,000 individually or $500,000 in the aggregate (or, with respect to (i) any Cost of Services Contract, $1,000,000 and (ii) switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any agreements in the ordinary course of business consistent with past practice, including but not limited to installation fees and customer premise equipment, in each case, associated with new customers and in the ordinary course of business consistent with past practice;
(j) create, incur or assume, or execute any new guarantee of, any Indebtedness in excess of $100,000 in the aggregate (other than indebtedness for borrowed money owing to W or any of its Affiliates) or prepay any Indebtedness;
(k) other than pursuant to arrangements existing on the date hereof, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for obligations of any other person (other than any Subsidiary) in an amount in excess of $100,000;
(l) make any loans or advances other than (i) loans or advances to wholly-owned Subsidiaries made in the ordinary course of business consistent with past practice and (ii) routine salary, travel and expense advances to Company Employees in the ordinary course of business consistent with past practice;
(i) engage in any transaction, or enter into any contract, agreement or arrangement (other than this Agreement, the Transactions and the incurrence of indebtedness for borrowed money owing to W or any of its Affiliates and transactions pursuant to any such contract, agreement or arrangement entered into on or prior to the date hereof), with any Affiliate, (ii) engage in any transaction, or enter into any contract, agreement or arrangement, with any portfolio company of W that is not on arm's length terms and in the ordinary course of business, or (iii) amend, waive or relinquish any rights relating to any such transaction, contract, agreement or arrangement referred to in clause (i) or (ii) that will remain outstanding after the Closing in accordance with Section 8.05;
(n) authorize any new capital expenditures which, individually, are greater than $100,000 or, in the aggregate, would cause total capital expenditures for year ending December 31, 2003 to exceed $500,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any capital expenditures in the ordinary course of business consistent with past practice;
(o) split, combine or reclassify any shares of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, other than (i) cash dividends and distributions by a wholly-owned Subsidiary to the Company or to a Subsidiary all of the capital stock which is owned directly or indirectly by the Company or (ii) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms; or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its securities or any securities of the Subsidiaries;
(p) (i) increase the compensation or fringe benefits of any Company Employee (except for (x) increases in salary or wages in the ordinary course of business consistent with past practice, (y) the payment of accrued or earned but unpaid bonuses and (z) stay bonuses or similar retention payments in an amount not to exceed $10,000 with respect to any individual payment and $100,000 in the aggregate with respect to all such payments), (ii) grant any severance or termination pay to any Company Employee, (iii) loan or advance any money or other property to any Company Employee (other than routine salary, travel and expense advances to Company Employees in the ordinary course of business and consistent with past practice), (iv) establish, adopt, enter into, amend or terminate any Company Plan, collective bargaining or labor agreement 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 of this Agreement (other than as may be required by the terms of an existing Company Plan this Agreement or collective bargaining agreement, or except as may be required by applicable law or in order to qualify under Sections 401 and 501 of Applicable Law, the Code), or (v) grant any equity or equity-based awards, other than in the cases of clauses Partnership shall:
(i) through promptly (vbut in any event, no later than three business days after the applicable matter or event) pursuant to commitments advise Purchaser in writing of the Company occurrence of any matter or event that (A) constitutes or would reasonably be expected to constitute a Partnership Material Adverse Effect, (B) resulted or would reasonably be expected to result in a material breach of any Subsidiary existing on the date hereof required by contracts of representations and warranties set forth in Section 4.08(kArticle II or Article III of this Agreement or (C) would reasonably be expected to (i) constitute a Seller Material Adverse Effect with respect to Sellers or Section 4.12 (ii) adversely affect the ability of the Company Disclosure SchedulePartnership to consummate the transactions contemplated by this Agreement;
(qii) pay, discharge or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than confer with Purchaser concerning operational matters of a material nature and otherwise report periodically to Purchaser concerning the payment, discharge or satisfaction in the ordinary course of business of liabilities reflected or reserved against in the consolidated financial statements status of the Company referred to in Section 4.07 or liabilities incurred in Business, operations, and finances of the ordinary course of businessPartnership;
(riii) make or change any tax election or settle or compromise any income tax liabilityuse reasonable best efforts to maintain in full force and effect all Intellectual Property of the Partnership;
(siv) other than comply with all Applicable Laws in the ordinary course operation of business consistent with past practice, change any method of accounting, accounting policy or accounting practice, except for any such change required by reason of a concurrent change in GAAP as concurred with by the Company's independent auditors;
(t) fail to maintain insurance coverage at presently existing levels;
(u) make any repayments of principal to W or its Affiliates in respect of any Indebtedness owed to W or its Affiliates or any payment of interest accrued in respect of such IndebtednessPartnership’s Business;
(v) agree cooperate with the Purchaser and use its reasonable best efforts to cause the conditions to the Purchaser’s obligations to close specified in Article VI below to be satisfied and execute and deliver such further instruments of conveyance and transfer and take such additional action as the Purchaser may reasonably request to effect, consummate, confirm or commit evidence the transactions contemplated by this Agreement; and
(vi) upon reasonable request, use reasonable best efforts to do any arrange meetings with such customers, suppliers, licensors, licensees, distributors, landlords, creditors, employees, agents and others having business relationships with it as the Purchaser shall reasonably designate in order that the Purchaser and the Partnership may confer with such Persons regarding the Partnership and the nature of the foregoing; or
(w) knowingly take or agree or commit to take any action that would make any representation and warranty of W or the Company hereunder inaccurate in any material respect at, or as of any time prior to, the Closing, except for any representations or warranties that are made as of a specified datetransactions contemplated by this Agreement.
Appears in 1 contract
Samples: Securities Purchase Agreement (Paincare Holdings Inc)
Covenants Relating to Conduct of Business. Section 7.016.1. Conduct of Business by the Company Pending the Merger. During the period from the date of this Agreement until the earlier of the Effective Time or such time as Parent's and Sub's designees shall constitute a majority of the Board of Directors of the Company. From the date hereof until the Closing, the Company shall, and the shall cause each of its Subsidiaries shall conduct their to, in all material respects, except as contemplated by this Agreement, carry on its business in the ordinary course as currently conducted and, to the extent consistent therewith, with past practice no less diligence and effort than would be applied in compliance with all applicable laws and shall use their reasonable best efforts the absence of this Agreement, seek to preserve intact their current business organizations and relationships with third parties and to organizations, keep available the services of their present current officers and employeesemployees and preserve their relationships with customers, suppliers and others having business dealings with them to the end that goodwill and ongoing businesses shall be unimpaired at the Effective Time. Without limiting the generality of the foregoing, from the date hereof until the Closing and except as expressly otherwise contemplated by this Agreement or the other Transaction AgreementsAgreement, as may result from the consummation of the Transactions, as set forth in Section 7.01 of the Company Disclosure Schedule, or as otherwise consented to in writing by Parent (except if during such consent would be inconsistent with applicable law), such consent not to be unreasonably withheld with respect to the granting of IRUs in fiber and/or conduit by the Company or the Subsidiariesperiod, the Company shall not not, and shall cause not permit any of its Subsidiaries to, without the Subsidiaries prior written consent of Parent (which consent shall not to:be unreasonably withheld or delayed):
(a) adopt amend or propose to amend its Articles of Incorporation or By-laws (or comparable governing instruments) or change the number of directors constituting the entire Board of Directors of the Company or any change in of its articles of incorporation, bylaws or other organizational documentsSubsidiaries;
(b) authorize for issuance, issue, deliver, grant, sell, pledge, or otherwise dispose of or propose to issue, deliver, grant, sell, pledge or transfer or authorize or propose the issuance, delivery, sale, pledge or transfer otherwise dispose of any shares of, or any options, warrants, commitments, subscriptions or rights of any kind to acquire or sell any shares of, the capital stock or other securities of the Company or any of its capital Subsidiaries including, but not limited to, stock of any class or appreciation rights, phantom stock, any securities convertible into or exercisable for, or any rights, warrants, options or other rights to acquire, any such exchangeable for shares or enter into any agreement with respect to the foregoing other than (i) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms, (ii) as required by Contracts in effect as of the date of this Agreement that are listed in Section 4.05 of the Company Disclosure Schedule and (iii) the issuance of capital stock of the Company as a dividend in respect of Preferred Stock outstanding on the date hereof in accordance with its present terms;
(i) acquire (by merger, consolidation or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof, (ii) sell, lease or otherwise dispose of a Subsidiary or (iii) sell, lease or otherwise dispose of an amount of assets or securities, including IRUs, for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), except for transactions in the ordinary course consistent with past practice;
(d) merge or consolidate with any other Person;
(e) make any investment, whether by purchase of stock or securities, contributions to capital or any property transfer (other than investments in cash or cash equivalents with a maturity of less than 90 days or investments in wholly-owned Subsidiaries made, in each case, in the ordinary course of business consistent with past practice), or purchase for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), any property or assets of any other individual or entity, except for inventory purchased for resale in the ordinary course class of business consistent with past practice;
(f) enter into any agreement or arrangement that limits or otherwise restricts the Company or any of its Subsidiaries; provided, however, that the Subsidiaries or any foregoing shall not prohibit the issuance of their respective Affiliates or successors thereto or that by its terms could, after Shares upon the Effective Time, limit or restrict Parent or the exercise of Company or any of their respective Affiliates or any successor thereto, from engaging or competing in any line of business or in any geographic area;
(g) other than in the ordinary course of business consistent with past practice, waive, release or relinquish any material right;
(h) other than in the ordinary course of business consistent with past practice, modify or change in any material respect any existing material license, lease, contract, or other agreement;
(i) enter into any agreements involving aggregate expenditures or receipts of more than $100,000 individually or $500,000 in the aggregate (or, with respect to (i) any Cost of Services Contract, $1,000,000 and (ii) switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any agreements in the ordinary course of business consistent with past practice, including but not limited to installation fees and customer premise equipment, in each case, associated with new customers and in the ordinary course of business consistent with past practice;
(j) create, incur or assume, or execute any new guarantee of, any Indebtedness in excess of $100,000 in the aggregate (other than indebtedness for borrowed money owing to W or any of its Affiliates) or prepay any Indebtedness;
(k) other than pursuant to arrangements existing on the date hereof, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for obligations of any other person (other than any Subsidiary) in an amount in excess of $100,000;
(l) make any loans or advances other than (i) loans or advances to wholly-owned Subsidiaries made in the ordinary course of business consistent with past practice and (ii) routine salary, travel and expense advances to Company Employees in the ordinary course of business consistent with past practice;
(i) engage in any transaction, or enter into any contract, agreement or arrangement (other than this Agreement, the Transactions and the incurrence of indebtedness for borrowed money owing to W or any of its Affiliates and transactions pursuant to any such contract, agreement or arrangement entered into on or Options granted prior to the date hereof), with any Affiliate, (ii) engage in any transaction, or enter into any contract, agreement or arrangement, with any portfolio company of W that is not on arm's length terms and in the ordinary course of business, or (iii) amend, waive or relinquish any rights relating to any such transaction, contract, agreement or arrangement referred to in clause (i) or (ii) that will remain outstanding after the Closing in accordance with Section 8.05;
(n) authorize any new capital expenditures which, individually, are greater than $100,000 or, in the aggregate, would cause total capital expenditures for year ending December 31, 2003 to exceed $500,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any capital expenditures in the ordinary course of business consistent with past practice;
(o) split, combine or reclassify any shares of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, other than (i) cash dividends and distributions by a wholly-owned Subsidiary to the Company or to a Subsidiary all of the capital stock which is owned directly or indirectly by the Company or (ii) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms; or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its securities or any securities of the Subsidiaries;
(p) (i) increase the compensation or fringe benefits of any Company Employee (except for (x) increases in salary or wages in the ordinary course of business consistent with past practice, (y) the payment of accrued or earned but unpaid bonuses and (z) stay bonuses or similar retention payments in an amount not to exceed $10,000 with respect to any individual payment and $100,000 in the aggregate with respect to all such payments), (ii) grant any severance or termination pay to any Company Employee, (iii) loan or advance any money or other property to any Company Employee (other than routine salary, travel and expense advances to Company Employees in the ordinary course of business and consistent with past practice), (iv) establish, adopt, enter into, amend or terminate any Company Plan, collective bargaining or labor agreement 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 of this Agreement (other than as may be required by the terms of an existing Company Plan or collective bargaining agreement, or as may be required by applicable law or in order to qualify under Sections 401 and 501 of the Code), or (v) grant any equity or equity-based awards, other than in the cases of clauses (i) through (v) pursuant to commitments of the Company or any Subsidiary existing on the date hereof required by contracts set forth in Section 4.08(k) or Section 4.12 of the Company Disclosure ScheduleAgreement;
(q) pay, discharge or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business of liabilities reflected or reserved against in the consolidated financial statements of the Company referred to in Section 4.07 or liabilities incurred in the ordinary course of business;
(r) make or change any tax election or settle or compromise any income tax liability;
(s) other than in the ordinary course of business consistent with past practice, change any method of accounting, accounting policy or accounting practice, except for any such change required by reason of a concurrent change in GAAP as concurred with by the Company's independent auditors;
(t) fail to maintain insurance coverage at presently existing levels;
(u) make any repayments of principal to W or its Affiliates in respect of any Indebtedness owed to W or its Affiliates or any payment of interest accrued in respect of such Indebtedness;
(v) agree or commit to do any of the foregoing; or
(w) knowingly take or agree or commit to take any action that would make any representation and warranty of W or the Company hereunder inaccurate in any material respect at, or as of any time prior to, the Closing, except for any representations or warranties that are made as of a specified date.
Appears in 1 contract
Covenants Relating to Conduct of Business. Section 7.01. 5.1 Conduct of Business by the CompanyCompany Pending the Merger. From Except as expressly permitted herein or as set forth in Section 5.1 of the date hereof until Company Disclosure Schedule, from the ClosingExecution Date through the Effective Time, the Company shall, and cause its Subsidiaries to, carry on the Subsidiaries shall conduct their business Business in the ordinary course of its business as currently conducted and, to the extent consistent with past practice in compliance with all applicable laws and shall therewith, use their reasonable best efforts to preserve intact their its current business organizations and relationships with third parties and to organizations, keep available the services of their present its current officers and employeesemployees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time. Without limiting the generality of the foregoing, from the date hereof until the Closing and except as otherwise expressly contemplated by this Agreement or the other Transaction Agreements, as may result from the consummation of the Transactions, as set forth in Section 7.01 5.1 of the Company Disclosure Schedule, or as otherwise consented to in writing by Parent Schedule (except if such consent would be inconsistent with applicable law), such consent not to be unreasonably withheld with respect specific reference to the granting of IRUs in fiber and/or conduit by the Company or the Subsidiariesapplicable subsection below), the Company shall not and not, nor shall cause it permit any of its Subsidiaries to, without the Subsidiaries not toprior written consent of Parent:
(a) adopt (i) declare, set aside or propose pay any change dividends on, or make any other actual, constructive or deemed distributions in respect of, any of its articles capital stock, or otherwise make any payments to its shareholders in their capacity as such, (ii) split, combine or reclassify any of incorporationits capital stock or issue or authorize the issuance of any other securities in respect of, bylaws 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 other securities thereof or any rights, warrants or options to acquire any such shares or other organizational documentssecurities;
(b) issue, deliver, sell, pledge pledge, dispose of or transfer or authorize or propose the issuance, delivery, sale, pledge or transfer of otherwise encumber any shares of its capital stock of stock, any class other voting securities or equity equivalent or any securities convertible into for or exercisable forexchangeable into, or any rights, warrants, warrants or options or other rights to acquire, acquire any such shares shares, voting securities, equity equivalent or enter into any agreement with respect to the foregoing convertible securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of stock options or warrants, or conversion of Preferred Stock, Company Stock Options outstanding on the date hereof in accordance with their present terms, (ii) as required by Contracts in effect as of the date of this Agreement that are listed in Section 4.05 of the Company Disclosure Schedule and (iii) the issuance of capital stock of the Company as a dividend in respect of Preferred Stock outstanding on the date hereof in accordance with its present termstheir terms as of the date hereof;
(ic) create any subsidiary or amend the Company Charter or Company Bylaws or amend or terminate any Employment Agreement;
(d) acquire (or agree to acquire by mergermerging or consolidating with, consolidation or acquisition by purchasing a substantial portion of stock the assets of or assets) equity in, or by any other manner, any business or any corporation, partnership limited liability company, partnership, association or other business organization or division thereof, (ii) sell, lease thereof or otherwise dispose of a Subsidiary acquire or (iii) sell, lease or otherwise dispose of an amount of agree to acquire any assets or securities, including IRUs, for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), except for transactions in the ordinary course consistent with past practice;
(d) merge or consolidate with any other Person;
(e) make any investment, whether by purchase of stock or securities, contributions to capital or any property transfer (other than investments in cash or cash equivalents with a maturity of less than 90 days or investments in wholly-owned Subsidiaries made, in each case, in the ordinary course of business consistent with past practice);
(e) sell, lease or otherwise dispose of, or purchase for an amount in excess of $100,000 (oragree to sell, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000)lease or otherwise dispose of, any property or of its assets other than sales of any other individual or entity, except for inventory purchased for resale that are in the ordinary course of business consistent with past practice;
(f) enter into (i) incur any agreement indebtedness for borrowed money or arrangement that limits make any loans, advances or otherwise restricts the Company capital contributions to, or other investments in, any of the Subsidiaries or any of their respective Affiliates or successors thereto or that by its terms couldother Person, after the Effective Time, limit or restrict Parent or the Company or any of their respective Affiliates or any successor thereto, from engaging or competing in any line of business or in any geographic area;
(g) other than in the ordinary course of business consistent with past practicepractices or (ii) post any bond or enter into any letter of credit or other similar arrangement;
(g) provide any guarantee, waiveincluding any performance guarantee or any guarantee of indebtedness for borrowed money, release or relinquish any material rightother than in the ordinary course of business;
(h) alter (through merger, liquidation, reorganization, restructuring or in any other fashion) the corporate structure or ownership of the Company;
(i) enter into or adopt any, amend or terminate any existing, severance plan, agreement or arrangement or enter into or amend any Company Plan or employment, retention or consulting agreement or other similar agreement or arrangement, other than in the ordinary course of business;
(j) increase the compensation payable or to become payable to its directors, officers or employees (except for increases in the ordinary course of business consistent with past practice) or grant any severance or termination pay to, modify any director or change officer of the Company, or establish, adopt, enter into, or, except as may be required to comply with applicable law, amend in any material respect or take action to enhance in any existing material licenserespect or accelerate any rights or benefits under, leaseany labor, contractcollective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance, retention or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee;
(ik) enter into knowingly violate or knowingly fail to perform any agreements involving aggregate expenditures obligation or receipts of more duty imposed upon it by any applicable federal, state, local or foreign law, rule, regulation, guideline or ordinance, or under any order, settlement agreement or judgment;
(l) make any change to accounting policies or procedures (other than $100,000 individually actions required to be taken by generally accepted accounting principles);
(m) prepare or $500,000 in the aggregate (file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods (it being understood and agreed that Parent shall be permitted to review and comment upon any Tax Return for a period of at least ten business days prior to its filing);
(n) make or rescind any express or deemed tax election related to Taxes or change any of its methods of reporting income or deductions for Tax purposes;
(o) commence any litigation or proceeding with respect to any material Tax liability or settle or compromise any material Tax liability or commence any other litigation or proceedings or settle or compromise any other material claims or litigation;
(ip) enter into, amend or terminate any Cost of Services Contractagreement or contract with any customer, $1,000,000 and (ii) switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Actsupplier, $1,000,000)sales representative, agent or distributor other than any agreements in the ordinary course of business consistent with past practice, including but not limited business; or purchase any real property; or make or agree to installation fees and customer premise equipment, in each case, associated with make any new customers and capital expenditure or expenditures except in the ordinary course of business consistent with past practice;
(jq) create, incur or assume, or execute any new guarantee of, any Indebtedness in excess of $100,000 in the aggregate (other than indebtedness for borrowed money owing to W or any of its Affiliates) or prepay any Indebtedness;
(k) other than pursuant to arrangements existing on the date hereof, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for obligations of any other person (other than any Subsidiary) in an amount in excess of $100,000;
(l) make any loans or advances other than (i) loans or advances to wholly-owned Subsidiaries made in the ordinary course of business consistent with past practice and (ii) routine salary, travel and expense advances to Company Employees in the ordinary course of business consistent with past practice;
(i) engage in any transaction, or enter into any contract, agreement or arrangement (other than this Agreement, the Transactions and the incurrence of indebtedness for borrowed money owing to W or any of its Affiliates and transactions pursuant to any such contract, agreement or arrangement entered into on or prior to the date hereof), with any Affiliate, (ii) engage in any transaction, or enter into any contract, agreement or arrangement, with any portfolio company of W that is not on arm's length terms and in the ordinary course of business, or (iii) amend, waive or relinquish any rights relating to any such transaction, contract, agreement or arrangement referred to in clause (i) or (ii) that will remain outstanding after the Closing in accordance with Section 8.05;
(n) authorize any new capital expenditures which, individually, are greater than $100,000 or, in the aggregate, would cause total capital expenditures for year ending December 31, 2003 to exceed $500,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any capital expenditures in the ordinary course of business consistent with past practice;
(o) split, combine or reclassify any shares of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, other than (i) cash dividends and distributions by a wholly-owned Subsidiary to the Company or to a Subsidiary all of the capital stock which is owned directly or indirectly by the Company or (ii) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms; or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its securities or any securities of the Subsidiaries;
(p) (i) increase the compensation or fringe benefits of any Company Employee (except for (x) increases in salary or wages in the ordinary course of business consistent with past practice, (y) the payment of accrued enter into or earned but unpaid bonuses and (z) stay bonuses or similar retention payments in an amount not to exceed $10,000 with respect to amend any individual payment and $100,000 in the aggregate with respect to all such payments), (ii) grant any severance or termination pay to any Company Employee, (iii) loan or advance any money or other property to any Company Employee (other than routine salary, travel and expense advances to Company Employees in the ordinary course of business and consistent with past practice), (iv) establish, adopt, enter into, amend or terminate any Company Plan, collective bargaining or labor agreement or contract with 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 of this Agreement (other than as may be required by the terms of an existing Company Plan or collective bargaining agreement, or as may be required by applicable law or in order to qualify under Sections 401 and 501 of the Code), or (v) grant any equity or equity-based awards, other than in the cases of clauses (i) through (v) Person pursuant to commitments of which the Company is the licensor or licensee of any Subsidiary existing on the date hereof required by contracts set forth in Section 4.08(k) or Section 4.12 of the Company Disclosure ScheduleIntellectual Property;
(qr) pay, discharge or satisfy any claims, liabilities or obligations (whether or not absolute, accrued, asserted or unassertedasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business of liabilities reflected or reserved against in the consolidated financial statements of the Company referred to in Section 4.07 or liabilities incurred in the ordinary course of business;
(r) make or change any tax election or settle or compromise any income tax liability;
(s) other than satisfaction, in the ordinary course of business consistent with past practicepractice or in accordance with their terms, change any method of accountingliabilities adequately reflected or reserved against in, accounting policy the most recent financial statements (or accounting practice, except for any such change required by reason the notes thereto) of the Company or incurred in the ordinary course of business consistent with past practice that would not otherwise have a concurrent change in GAAP as concurred with by Material Adverse Effect on the Company's independent auditors;; or
(ts) fail to maintain insurance coverage at presently existing levels;
(u) make any repayments of principal to W authorize, recommend, propose or its Affiliates in respect of any Indebtedness owed to W or its Affiliates or any payment of interest accrued in respect of such Indebtedness;
(v) agree or commit announce an intention to do any of the foregoing; or
(w) knowingly take or agree or commit to take any action that would make any representation and warranty of W or the Company hereunder inaccurate in any material respect at, or as enter into any contract, agreement, commitment or arrangement to do any of any time prior to, the Closing, except for any representations or warranties that are made as of a specified dateforegoing.
Appears in 1 contract
Samples: Merger Agreement (Kratos Defense & Security Solutions, Inc.)
Covenants Relating to Conduct of Business. Section 7.01. 5.1 Conduct of the Company's Business Pending the Closing. From the date hereof and ----------------------------------------------------- after June 30, 2000 and continuing until the Closing, each of the Company and the Subsidiaries shall conduct their business in the ordinary course consistent with past practice in compliance with all applicable laws and shall use their reasonable best efforts to preserve intact their business organizations and relationships with third parties and to keep available the services of their present officers and employees. Without limiting the generality of the foregoing, from the date hereof until the Closing and Shareholders agrees that (except as expressly contemplated or permitted by this Agreement or the other Transaction Agreements, as may result from the consummation of the Transactions, as set forth in Section 7.01 of the Company Disclosure ScheduleAgreement, or as otherwise consented to in writing by Parent (except if such consent would be inconsistent with applicable law), such consent not to be unreasonably withheld with respect to the granting of IRUs extent that Certicom shall otherwise consent in fiber and/or conduit by the Company or the Subsidiarieswriting), the Company shall not and shall cause the Subsidiaries not be obligated to:
(a) adopt or propose any change in its articles of incorporation, bylaws or other organizational documents;
(b) issue, deliver, sell, pledge or transfer or authorize or propose conduct the issuance, delivery, sale, pledge or transfer of any shares of its capital stock of any class or any securities convertible into or exercisable for, or any rights, warrants, options or other rights to acquire, any such shares or enter into any agreement with respect to the foregoing other than (i) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms, (ii) as required by Contracts in effect as of the date of this Agreement that are listed in Section 4.05 of the Company Disclosure Schedule and (iii) the issuance of capital stock of the Company as a dividend in respect of Preferred Stock outstanding on the date hereof in accordance with its present terms;
(i) acquire (by merger, consolidation or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof, (ii) sell, lease or otherwise dispose of a Subsidiary or (iii) sell, lease or otherwise dispose of an amount of assets or securities, including IRUs, for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), except for transactions Business only in the ordinary course consistent with past practice;
(b) except as provided herein, not (i) pay or distribute any dividend or other distribution, nor declare, authorize or set aside for payment any dividend which would reduce the Company's current assets (cash plus accrued accounts receivable), measured as of the Closing Date, to less than US$100,000; (ii) grant any option, warrant, call or right (including preemptive rights); (iii) issue, transfer, dispose, sell, purchase, redeem or otherwise acquire any shares of capital stock of the Company or any of its securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of capital stock or other securities of, or other ownership interests in, the Company; or (iv) enter into any agreement of any character requiring the Company or its successors to take any of the actions in (i), (ii) and (iii) above;
(c) not effect any recapitalization, reclassification or similar change in the capitalization of the Company;
(d) merge not amend the Articles of Incorporation or consolidate with any other PersonBylaws of the Company;
(e) make any investmentuse its best efforts to (i) preserve the present business operations, whether by purchase organization (including, without limitation, management and the sales force) and goodwill of stock or securitiesthe Company and (ii) preserve the present relationship of the Company with persons having business dealings with the Company;
(f) not, contributions to capital or any property transfer (other than investments in cash the ordinary course of business consistent with past practice and without materially increasing the benefits or cash equivalents the costs thereof, and except for the payment of bonuses in the aggregate amount of U.S. $25,000 to employees, (i) increase the compensation payable or to become payable by the Company to any of their respective directors, officers, employees, agents or representatives, (ii) increase the coverage or benefits available under any (or create any new) severance pay, termination pay, vacation pay, company awards, salary continuation for disability, sick leave, deferred compensation, bonus or other incentive compensation, insurance, pension or other employee benefit plan, payment or arrangement made to, for, or with any of the directors, officers, employees, agents or representatives of the Company, (iii) award or pay any bonus to any such person or (iv) enter into any employment, deferred compensation, severance, consulting, non-competition or similar agreement (or amend any such agreement) to which the Company is a maturity party or involving a director, officer or employee of less than 90 days the Company in his or investments her capacity as a director, officer or employee of the Company;
(g) comply with all Laws and comply with all contractual and other obligations applicable to the Company;
(h) not incur any indebtedness for borrowed money, not issue any bond, debenture or promissory note and, except for trade payables and any other liabilities or obligations incurred in wholly-owned Subsidiaries madethe ordinary course of business (consistent with past practice), not create, incur, acquire, assume, guarantee or become subject to, or agree to incur or become subject to, any other obligation or liability (contingent or otherwise);
(i) not subject to any Encumbrance (except for leases that do not materially impair the use of the property subject thereto) any of the properties or assets (whether tangible or intangible) of the Company;
(j) not acquire any properties or fixed assets at a price in each caseexcess of US$5,000 without Certicom's prior approval, and not sell, assign, transfer, convey, lease or otherwise dispose of any of the material properties or assets (except for fair consideration in the ordinary course of business consistent with past practice)) of the Company;
(k) not dispose of or permit to lapse any rights to the use of any Intellectual Property, or purchase for an amount in excess dispose of $100,000 or disclose to any person or entity (orother than Certicom and its affiliates and representatives) any trade secret, with respect to switch software upgrades for purposes formula, process or know-how of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), Company not theretofore a matter of public knowledge;
(l) not cancel or compromise any property debt or assets claim or waive or release any material right of any other individual or entity, the Company except for inventory purchased for resale in the ordinary course of business consistent with past practice;
(fm) not enter into any agreement or arrangement that limits or otherwise restricts commitment for capital expenditures of the Company or any of the Subsidiaries or any of their respective Affiliates or successors thereto or that by its terms could, after the Effective Time, limit or restrict Parent or the Company or any of their respective Affiliates or any successor thereto, from engaging or competing in any line of business or in any geographic area;
(g) other than in the ordinary course of business consistent with past practice, waive, release or relinquish any material right;
(h) other than in the ordinary course of business consistent with past practice, modify or change in any material respect any existing material license, lease, contract, or other agreement;
(i) enter into any agreements involving aggregate expenditures or receipts of more than $100,000 individually or $500,000 in the aggregate (or, with respect to (i) any Cost of Services Contract, $1,000,000 and (ii) switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any agreements in the ordinary course of business consistent with past practice, including but not limited to installation fees and customer premise equipment, in each case, associated with new customers and in the ordinary course of business consistent with past practice;
(j) create, incur or assume, or execute any new guarantee of, any Indebtedness in excess of U.S. $100,000 5,000 for any individual commitment and U.S. $10,000 for all commitments in the aggregate (other than indebtedness for borrowed money owing to W or any of its Affiliates) or prepay any Indebtedness;
(k) other than pursuant to arrangements existing on the date hereof, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for obligations of any other person (other than any Subsidiary) in an amount in excess of $100,000;
(l) make any loans or advances other than (i) loans or advances to wholly-owned Subsidiaries made in the ordinary course of business consistent with past practice and (ii) routine salary, travel and expense advances to Company Employees in the ordinary course of business consistent with past practice;
(i) engage in any transaction, or enter into any contract, agreement or arrangement (other than this Agreement, the Transactions and the incurrence of indebtedness for borrowed money owing to W or any of its Affiliates and transactions pursuant to any such contract, agreement or arrangement entered into on or prior to the date hereof), with any Affiliate, (ii) engage in any transaction, or enter into any contract, agreement or arrangement, with any portfolio company of W that is not on arm's length terms and in the ordinary course of business, or (iii) amend, waive or relinquish any rights relating to any such transaction, contract, agreement or arrangement referred to in clause (i) or (ii) that will remain outstanding after the Closing in accordance with Section 8.05aggregate;
(n) authorize not agree to do anything prohibited by Articles V or VI of this Agreement or anything which would make any new capital expenditures which, individually, are greater than $100,000 or, of the representations and warranties of the Company or the Shareholders in the aggregate, would cause total capital expenditures for year ending December 31, 2003 to exceed $500,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than this Agreement untrue or incorrect in any capital expenditures in the ordinary course of business consistent with past practice;material respect; and
(o) split, combine or reclassify any shares of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, other than (i) cash dividends and distributions by a wholly-owned Subsidiary to the Company or to a Subsidiary all of the capital stock which is owned directly or indirectly by the Company or (ii) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms; or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its securities or any securities of the Subsidiaries;
(p) (i) increase the compensation or fringe benefits of any Company Employee (except for (x) increases in salary or wages in the ordinary course of business consistent with past practice, (y) the payment of accrued or earned but unpaid bonuses and (z) stay bonuses or similar retention payments in an amount not to exceed $10,000 with respect to any individual payment and $100,000 in the aggregate with respect to all such payments), (ii) grant any severance or termination pay to any Company Employee, (iii) loan or advance any money or other property to any Company Employee (other than routine salary, travel and expense advances to Company Employees in the ordinary course of business and consistent with past practice), (iv) establish, adopt, enter into, amend or terminate any Company Plan, collective bargaining or labor agreement 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 of this Agreement (other than as may be required by the terms of an existing Company Plan or collective bargaining agreement, or as may be required by applicable law or in order to qualify under Sections 401 and 501 of the Code), or (v) grant any equity or equity-based awards, other than in the cases of clauses (i) through (v) pursuant to commitments of the Company or any Subsidiary existing on the date hereof required by contracts set forth in Section 4.08(k) or Section 4.12 of the Company Disclosure Schedule;
(q) pay, discharge or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business of liabilities reflected or reserved against in the consolidated financial statements of the Company referred to in Section 4.07 or liabilities incurred in the ordinary course of business;
(r) make or change any tax election or settle or compromise any income tax liability;
(s) other than in the ordinary course of business consistent with past practice, change any method of accounting, accounting policy or accounting practice, except for any such change required by reason of a concurrent change in GAAP as concurred with by the Company's independent auditors;
(t) fail to maintain insurance coverage at presently existing levels;
(u) make any repayments of principal to W or its Affiliates in respect of any Indebtedness owed to W or its Affiliates or any payment of interest accrued in respect of such Indebtedness;
(v) agree or commit to do any of the foregoing; or
(w) knowingly take or agree or commit to take any action which would be prohibited by this Section 5.1; provided in all events that would make any representation and warranty of W or the Company hereunder inaccurate shall be permitted to defend and/or prosecute any claims identified in any material respect at, or as Section 2.8 of any time prior to, the Closing, except for any representations or warranties that are made as Schedule of Exceptions in a specified datecommercially reasonable manner.
Appears in 1 contract
Samples: Merger Agreement (Certicom Corp)
Covenants Relating to Conduct of Business. Section 7.01SECTION 5.01. Conduct of Business by the Company. From .
(a) Except for matters set forth in Section 5.01 of the Company Disclosure Letter or otherwise contemplated by this Agreement, from the date hereof until of this Agreement to the Closing, Effective Time the Company shall, and shall cause each Company Subsidiary to, conduct its business in light of the Subsidiaries shall conduct their business existing circumstances in the ordinary course consistent with past practice course, including operating in compliance with Law and making all applicable laws required filings with the SEC. In addition, and shall use their reasonable best efforts to preserve intact their business organizations and relationships with third parties and to keep available the services of their present officers and employees. Without without limiting the generality of the foregoing, except for matters set forth in the Company Disclosure Letter or otherwise contemplated by this Agreement, from the date hereof until the Closing and except as expressly contemplated by of this Agreement or the other Transaction Agreements, as may result from the consummation of the Transactions, as set forth in Section 7.01 of the Company Disclosure Schedule, or as otherwise consented to in writing by Parent (except if such consent would be inconsistent with applicable law), such consent not to be unreasonably withheld with respect to the granting of IRUs in fiber and/or conduit by the Company or the SubsidiariesEffective Time, the Company shall not not, and shall cause not permit any Company Subsidiary to, do any of the Subsidiaries following without the prior written consent of Parent (which consent shall not to:be unreasonably withheld, delayed or conditioned):
(ai) adopt (A) declare, set aside or propose pay any change dividends on, or make any other distributions in respect of, any of its articles capital stock, other than dividends and distributions by a direct or indirect wholly owned subsidiary of incorporationthe Company to its parent, bylaws (B) split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, or (C) purchase, redeem or otherwise acquire any shares of capital stock of the Company or any Company Subsidiary or any other securities thereof or any options, warrants, calls or rights to acquire any such shares or other organizational documentssecurities;
(bii) issue, deliver, sell, pledge sell or transfer or authorize or propose the issuance, delivery, sale, pledge or transfer of grant (A) any shares of its capital stock of or other voting securities or equity interests, (B) any class or Voting Company Debt, (C) any securities convertible into or exchangeable into, or exercisable for, any such shares, voting securities, equity interests or Voting Company Debt, or (D) any rightsoptions, warrants, options calls, rights, convertible or exchangeable securities, "phantom" stock rights, stock appreciation rights or stock-based performance units, profit participation rights, rights of repurchase, other rights linked to acquirethe price of Company Capital Stock, commitments, Contracts, arrangements or undertakings obligating it to issue, deliver, sell or grant any such shares shares, voting securities, equity interests or enter into any agreement with respect to the foregoing Voting Company Debt, in each case other than (i1) the issuance of Company Common Stock (and associated Company Rights) upon the exercise of Company Employee Stock Options outstanding on the date of this Agreement and in accordance with their present terms and (2) the issuance of Company Common Stock upon the exercise of stock options Company Rights if the Company is not in breach of Section 6.09;
(iii) amend its certificate of incorporation, by-laws or warrantsother comparable charter or organizational documents;
(iv) acquire or agree to acquire (A) by merging or consolidating with, or conversion by purchasing any equity interest in or portion of Preferred Stockthe assets of, outstanding on or by any other manner, any business or any corporation, partnership, joint venture, association or other business organization or division thereof or (B) any assets that are material, individually or in the date hereof aggregate, to the Company and the Company Subsidiaries, taken as a whole, except purchases in accordance the ordinary course of business consistent with their present termsprior practice;
(v) make any change in accounting methods, (ii) principles or practices materially affecting the reported consolidated assets, liabilities or results of operations of the Company, except insofar as may have been required by Contracts a change in GAAP or applicable Law;
(vi) sell, lease (as lessor), license or otherwise dispose of or subject to any Lien any properties or assets that are material, individually or in the aggregate, to the Company and the Company Subsidiaries, taken as a whole, except sales of assets or licensing transactions in the ordinary course of business consistent with prior practice;
(vii) (A) 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 Company Subsidiary, 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 indebtedness for borrowed money so long as such indebtedness (together with all other indebtedness for borrowed money) does not exceed an aggregate principal amount of $2,000,000 or (B) make any loans or capital contributions to, or investments in, any other person, other than to or in the Company or any direct or indirect wholly owned subsidiary of the Company;
(viii) make or agree to make any new capital expenditure or expenditures that, individually, is in excess of $50,000 or, in the aggregate, are in excess of $50,000;
(ix) make any election with respect to Taxes or settle or compromise any material Tax liability or refund;
(x) (A) grant to any director or executive officer of the Company of any Company Subsidiary any increase in cash compensation, except increases in the ordinary course of business of not more than 2% per annum or increases required under employment agreements in effect as of the date of this Agreement that are listed in Section 4.05 of the Company Disclosure Schedule and (iii) the issuance of capital stock of the Company as a dividend in respect of Preferred Stock outstanding on the date hereof in accordance with its present terms;
(i) acquire (by merger, consolidation or acquisition of stock or assets) any corporation, partnership or other business organization or division thereofAgreement, (iiB) sell, lease or otherwise dispose of a Subsidiary or (iii) sell, lease or otherwise dispose of an amount of assets or securities, including IRUs, for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), except for transactions in the ordinary course consistent with past practice;
(d) merge or consolidate with any other Person;
(e) make any investment, whether by purchase of stock or securities, contributions to capital or any property transfer (other than investments in cash or cash equivalents with a maturity of less than 90 days or investments in wholly-owned Subsidiaries made, in each case, in the ordinary course of business consistent with past practice), or purchase for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), any property or assets of any other individual or entity, except for inventory purchased for resale in the ordinary course of business consistent with past practice;
(f) enter into any agreement or arrangement that limits or otherwise restricts the Company or any of the Subsidiaries or any of their respective Affiliates or successors thereto or that by its terms could, after the Effective Time, limit or restrict Parent or the Company or any of their respective Affiliates or any successor thereto, from engaging or competing in any line of business or in any geographic area;
(g) other than in the ordinary course of business consistent with past practice, waive, release or relinquish any material right;
(h) other than in the ordinary course of business consistent with past practice, modify or change in any material respect any existing material license, lease, contract, or other agreement;
(i) enter into any agreements involving aggregate expenditures or receipts of more than $100,000 individually or $500,000 in the aggregate (or, with respect to (i) any Cost of Services Contract, $1,000,000 and (ii) switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any agreements in the ordinary course of business consistent with past practice, including but not limited to installation fees and customer premise equipment, in each case, associated with new customers and in the ordinary course of business consistent with past practice;
(j) create, incur or assume, or execute any new guarantee of, any Indebtedness in excess of $100,000 in the aggregate (other than indebtedness for borrowed money owing to W or any of its Affiliates) or prepay any Indebtedness;
(k) other than pursuant to arrangements existing on the date hereof, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for obligations of any other person (other than any Subsidiary) in an amount in excess of $100,000;
(l) make any loans or advances other than (i) loans or advances to wholly-owned Subsidiaries made in the ordinary course of business consistent with past practice and (ii) routine salary, travel and expense advances to Company Employees in the ordinary course of business consistent with past practice;
(i) engage in any transaction, or enter into any contract, agreement or arrangement (other than this Agreement, the Transactions and the incurrence of indebtedness for borrowed money owing to W or any of its Affiliates and transactions pursuant grant to any such contract, agreement director or arrangement entered into on or prior to the date hereof), with executive officer any Affiliate, (ii) engage increase in any transaction, or enter into any contract, agreement or arrangement, with any portfolio company of W that is not on arm's length terms and in the ordinary course of business, or (iii) amend, waive or relinquish any rights relating to any such transaction, contract, agreement or arrangement referred to in clause (i) or (ii) that will remain outstanding after the Closing in accordance with Section 8.05;
(n) authorize any new capital expenditures which, individually, are greater than $100,000 or, in the aggregate, would cause total capital expenditures for year ending December 31, 2003 to exceed $500,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any capital expenditures in the ordinary course of business consistent with past practice;
(o) split, combine or reclassify any shares of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, other than (i) cash dividends and distributions by a wholly-owned Subsidiary to the Company or to a Subsidiary all of the capital stock which is owned directly or indirectly by the Company or (ii) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms; or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its securities or any securities of the Subsidiaries;
(p) (i) increase the compensation or fringe benefits of any Company Employee (except for (x) increases in salary or wages in the ordinary course of business consistent with past practice, (y) the payment of accrued or earned but unpaid bonuses and (z) stay bonuses or similar retention payments in an amount not to exceed $10,000 with respect to any individual payment and $100,000 in the aggregate with respect to all such payments), (ii) grant any severance or termination pay to pay, except increases required under any Company Employeeemployment, (iii) loan severance or advance any money or other property to any Company Employee (other than routine salary, travel and expense advances to Company Employees termination agreements in the ordinary course of business and consistent with past practice), (iv) establish, adopt, enter into, amend or terminate any Company Plan, collective bargaining or labor agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Plan if it were in existence effect as of the date of this Agreement (other than as may be required by the terms of an existing Company Plan or collective bargaining agreement, or as may be required by applicable law or in order to qualify under Sections 401 and 501 of the Code)Agreement, or (vC) grant enter into any equity employment, severance, termination or equity-based awardsother agreement with any such director or executive officer;
(xi) adopt or amend in any material respect any collective bargaining agreement or any bonus, pension, profit sharing, deferred compensation, incentive compensation, stock ownership, stock purchase, stock option, phantom stock, retirement, vacation, severance, disability, death benefit, hospitalization, medical or other than in the cases of clauses (i) through (v) pursuant plan, arrangement or understanding providing benefits to commitments any current or former employee, officer or director of the Company or any Subsidiary existing Company Subsidiary;
(xii) enter into, modify or terminate (i) any Contract listed on the date hereof required by contracts set forth in Section 4.08(k) or Section 4.12 3.15 of the Company Disclosure ScheduleLetter, and (ii) any Contract entered into on or after the date of this Agreement, that if it had been entered into prior to the date of this Agreement, would have had to be listed on Section 3.15 of the Company Disclosure Letter;
(qxiii) payenter into, discharge modify or satisfy terminate any claimssponsorship or promoter Contract;
(xiv) enter into, liabilities modify or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business of liabilities reflected or reserved against in the consolidated financial statements terminate any Contract with any affiliate of the Company referred to in Section 4.07 or liabilities incurred in the ordinary course of business;
(r) make or change any tax election or settle or compromise any income tax liability;
(s) other than in the ordinary course of business consistent with past practice, change any method of accounting, accounting policy or accounting practice, except for any such change required by reason of a concurrent change in GAAP as concurred with by the Company's independent auditors;
(t) fail to maintain insurance coverage at presently existing levels;
(u) make any repayments of principal to W or its Affiliates in respect of any Indebtedness owed to W or its Affiliates or any payment of interest accrued in respect of such Indebtedness;
(v) agree or commit to do any of the foregoingCompany Subsidiary; or
(wxv) knowingly take authorize any of, or commit or agree or commit to take any action that would make any representation and warranty of W or the Company hereunder inaccurate in any material respect at, or as of any time prior toof, the Closing, except for any representations or warranties that are made as of a specified dateforegoing actions.
Appears in 1 contract
Samples: Merger Agreement (Championship Auto Racing Teams Inc)
Covenants Relating to Conduct of Business. During the period from the date of this Agreement until the Closing or earlier termination of this Agreement, except as set forth in Section 7.01. Conduct 5.01 of the Company. From Seller Disclosure Schedule, as otherwise expressly required or permitted by the date hereof until terms of this Agreement or required by applicable Law or Judgment, or with the Closingprior written consent of Carlyle Buyer (which consent shall not be unreasonably withheld, delayed or conditioned); it being agreed that the inability to procure consent thereto from any third party shall not constitute a reasonable basis for Carlyle Buyer to withhold, delay or condition such consent:
(a) except as contemplated under this Agreement, Seller shall cause the Company and the Company Subsidiaries shall to conduct their business in the ordinary course consistent with past practice in compliance with all applicable laws and shall use their reasonable best efforts to preserve intact their business organizations and relationships with third parties and to keep available the services of their present officers and employees. Without limiting the generality of the foregoingbusiness;
(b) as applicable, from the date hereof until the Closing and except as expressly contemplated by under this Agreement or the other Transaction Agreements, as may result from the consummation of the Transactions, as set forth in Section 7.01 of the Company Disclosure Schedule, or as otherwise consented to in writing by Parent (except if such consent would be inconsistent with applicable law), such consent not to be unreasonably withheld with respect to the granting of IRUs in fiber and/or conduit by the Company or the SubsidiariesAgreement, the Company shall not not, and Seller shall cause the Company and the Company Subsidiaries not to:
(ai) adopt split, combine or propose any change in its articles of incorporationreclassify, bylaws or other organizational documents;
(b) issue, deliver, sell, pledge or transfer issue or authorize or propose the issuance, delivery, sale, pledge or transfer of any shares of its capital stock of any class or any securities convertible into or exercisable for, or any rights, warrants, options or other rights to acquire, any such shares or enter into any agreement with respect to the foregoing other than (i) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms, (ii) as required by Contracts in effect as of the date of this Agreement that are listed in Section 4.05 of the Company Disclosure Schedule and (iii) the issuance of capital stock of the Company as a dividend any other securities in respect of Preferred Stock outstanding on the date hereof in accordance with its present terms;
(i) acquire (by merger, consolidation or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof, (ii) sell, lease or otherwise dispose of a Subsidiary or (iii) sell, lease or otherwise dispose of an amount of assets or securities, including IRUs, for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), except for transactions in the ordinary course consistent with past practice;
(d) merge or consolidate with any other Person;
(e) make any investment, whether by purchase of stock or securities, contributions to capital or any property transfer (other than investments in cash or cash equivalents with a maturity of less than 90 days or investments in wholly-owned Subsidiaries madeof, in each caselieu of or in substitution for, in the ordinary course outstanding Units of business consistent with past practice), or purchase for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), any property or assets of any other individual or entity, except for inventory purchased for resale in the ordinary course of business consistent with past practice;
(f) enter into any agreement or arrangement that limits or otherwise restricts the Company or any of the Subsidiaries outstanding capital stock or other equity interests of the Company Subsidiaries;
(ii) repurchase, redeem or otherwise acquire, or issue, grant, transfer or sell, or agree or promise to acquire, or issue, grant, transfer or sell, any capital stock, Units, partnership interests, profits or other limited liability company interests, joint venture interests or other voting or equity interests of their respective Affiliates or successors thereto or that by its terms could, after the Effective Time, limit or restrict Parent or the Company or any of their respective Affiliates Company Subsidiary, or any successor theretoawards or similar instruments or rights measured by the value of any membership equity, from engaging profits or competing in other limited liability company interests or equity interests of the Company or any line of business or in any geographic areaCompany Subsidiary;
(giii) manage its Investment Assets (other than any Investment Assets managed by Carlyle or its Affiliates) other than in material compliance with the ordinary course of business consistent with past practice, waive, release Investment Guidelines or relinquish make any material rightchange to the Investment Guidelines;
(hiv) other than in pay or suffer, or incur any obligation to pay or suffer, any Leakage;
(A) grant, increase or accelerate the ordinary course of business consistent with past practicevesting or payment of, modify or announce or promise to grant, increase or accelerate the vesting or payment of, any wages, salaries, bonuses, incentives, cash or equity-based awards, retention, change in any material respect any existing material licensecontrol or severance pay, leaseother compensation, contractretirement, pension or deferred compensation, or other agreement;
(i) enter into benefits payable or potentially available to any agreements involving aggregate expenditures Employee, including any increase or receipts of more change pursuant to any Seller Benefit Plan, other than $100,000 individually or $500,000 in the aggregate (or, with respect to (i) any Cost Employee with annual base salary of Services Contract, $1,000,000 and (ii) switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any agreements in the ordinary course of business consistent with past practice, including but not limited to installation fees and customer premise equipment, in each case, associated with new customers and in the ordinary course of business consistent with past practice;
(j) create, incur or assume, or execute any new guarantee of, any Indebtedness in excess of $100,000 in the aggregate (other than indebtedness for borrowed money owing to W or any of its Affiliates) or prepay any Indebtedness;
(k) other than pursuant to arrangements existing on the date hereof, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for obligations of any other person (other than any Subsidiary) in an amount in excess of $100,000;
(l) make any loans or advances other than (i) loans or advances to wholly-owned Subsidiaries made in the ordinary course of business consistent with past practice and (ii) routine salary, travel and expense advances to Company Employees in the ordinary course of business consistent with past practice;
(i) engage in any transaction, or enter into any contract, agreement or arrangement (other than this Agreement, the Transactions and the incurrence of indebtedness for borrowed money owing to W or any of its Affiliates and transactions pursuant to any such contract, agreement or arrangement entered into on or prior to the date hereof), with any Affiliate, (ii) engage in any transaction, or enter into any contract, agreement or arrangement, with any portfolio company of W that is not on arm's length terms and in the ordinary course of business, or (iii) amend, waive or relinquish any rights relating to any such transaction, contract, agreement or arrangement referred to in clause (i) or (ii) that will remain outstanding after the Closing in accordance with Section 8.05;
(n) authorize any new capital expenditures which, individually, are greater less than $100,000 or, in the aggregate, would cause total capital expenditures for year ending December 31, 2003 to exceed $500,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any capital expenditures in the ordinary course of business consistent with past practice;
(o) split, combine or reclassify any shares of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, other than (i) cash dividends and distributions by a wholly-owned Subsidiary to the Company or to a Subsidiary all of the capital stock which is owned directly or indirectly by the Company or (ii) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms; or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its securities or any securities of the Subsidiaries;
(p) (i) increase the compensation or fringe benefits of any Company Employee (except for (x) increases in salary or wages 300,000 in the ordinary course of business consistent with past practice, (y) the payment of accrued or earned but unpaid bonuses and (z) stay bonuses or similar retention payments in an amount not to exceed $10,000 with respect to any individual payment and $100,000 in the aggregate with respect to all such payments), (ii) grant any severance or termination pay to any Company Employee, (iii) loan or advance any money or other property to any Company Employee (other than routine salary, travel and expense advances to Company Employees in the ordinary course of business and consistent with past practice), (ivB) establish, adopt, enter intomaterially increase or amend (or promise to take any such action(s)) any Seller Benefit Plan in respect of any Employee, amend except as would not result in any material Liability or terminate material increase in costs for the Company or any Company PlanSubsidiary or except for changes to Seller Benefit Plans that are generally applicable to all participants in such plans who are employed by Seller and its Affiliates, (C) establish, adopt or enter into any collective bargaining or similar labor agreement covering any Employees, (D) other than as contemplated by Section 5.13, transfer the employment (x) to the Company or any planCompany Subsidiary, agreement, program, policy, trust, fund of any employee of Seller or any of its Affiliates (other arrangement that would be a than the Company Plan if it were in existence or any Company Subsidiary) who does not provide services primarily to the Business as of the date hereof, or (y) from the Company or any Company Subsidiary, of this Agreement any Employee, to Seller or any of its Affiliates (other than as may be required by the terms of an existing Company, any Company Plan or collective bargaining agreementSubsidiary, any Transition Employer or as may be required otherwise contemplated by applicable law or in order to qualify under Sections 401 and 501 of the CodeSection 5.13), or (vE) grant take any equity other action in respect of any compensation or equityemployee benefits of the Employees that otherwise requires the approval of the Carve-based awardsout Committee without such approval, other than in the cases and, with respect to each of clauses (iA) through (vE) pursuant to commitments above, except as required by Law or by any Contract in existence on the date hereof and set forth in Section 3.16(a) of the Seller Disclosure Schedule, or as set forth in Section 5.13(d) of the Seller Disclosure Schedule, or as approved by the Carve-out Committee;
(vi) enter into, or amend in any material respect, any employment contracts with any executive officers of the Company or any Subsidiary existing on the date hereof required by contracts Company Subsidiary, or any Employee with annual base salary of more than $300,000;
(vii) take any action set forth in Section 4.08(k7.12(h) of the Operating Agreement, except as approved by the Conflicts Committee or Section 4.12 the Carve-out Committee, in each case, to the extent that the Operating Agreement, the 2018 Purchase Agreement or their respective charters expressly requires the approval of the Conflicts Committee or the Carve-out Committee for such action;
(viii) make any material change in the reserving or financial accounting policies, practices or principles of the Company Disclosure Schedule;
(q) payor any Company Subsidiary, discharge or satisfy any claimsas applicable, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise)in effect on the date hereof, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities reflected or reserved against in the consolidated financial statements of the Company referred to in Section 4.07 or liabilities incurred changes in the ordinary course of business, any change required by GAAP or Bermuda SAP or any changes that apply generally to similarly situated Subsidiaries of the Seller; or
(ix) enter into any legally binding commitment with respect to any of the foregoing.
(c) except as expressly contemplated under this Agreement, Seller shall not, and Seller shall cause its applicable Affiliates not to:
(i) transfer, issue, sell, pledge, encumber or dispose of, or authorize, agree to or promise the transfer, issuance, sale, pledge, encumbrance or disposition of, any Units or other securities of the Company or any Company Subsidiary or grant options, warrants, calls or other rights to purchase or otherwise acquire any Units or other securities of the Company or any Company Subsidiary, or any awards or similar instruments or rights measured by the value of any membership equity, profits or other limited liability company interests or equity interests of the Company or any Company Subsidiary;
(rii) make manage any Investment Assets in the Collateral Accounts (other than any Investment Assets managed by Carlyle or change any tax election or settle or compromise any income tax liability;
(sits Affiliates) other than in material compliance with the ordinary course of business consistent with past practice, change any method of accounting, accounting policy or accounting practice, except for any such change required by reason of a concurrent change applicable guidelines set forth in GAAP as concurred with by the Company's independent auditors;Reinsurance Agreements; or
(tiii) fail enter into any legally binding commitment with respect to maintain insurance coverage at presently existing levels;
(u) make any repayments of principal to W or its Affiliates in respect of any Indebtedness owed to W or its Affiliates or any payment of interest accrued in respect of such Indebtedness;
(v) agree or commit to do any of the foregoing; or.
(wd) knowingly take The Company shall hold meetings (either in-person or agree or commit to take any action that would make any representation and warranty by teleconference) with T&D at least once per month during which Representatives of W or the Company hereunder inaccurate in shall provide T&D with information regarding any material changes or updates to the Business and matters discussed with the board of directors of the Company (subject, however, to the protection of legal privileges or similar protections) that have occurred since the prior meeting (or with respect atto the first meeting, since the date hereof) and shall answer and respond to reasonable questions T&D or as any of its Representatives may have with respect to the Business.
(e) The Company shall, and shall cause the Company Subsidiaries to, make available to each Purchaser all documents and materials distributed during any meeting of the board of directors (or similar governing body) of the Company or any Company Subsidiary or any of its committees, and copies of any time prior tomeeting minutes or written consents of such board (or similar governing body) or any of its committees; provided, however, that with respect to any matters, should there be a reasonable concern regarding the Closingprotection of applicable legal privileges (such as those governing attorney-client communications) or similar protections, except such Purchaser shall not be entitled to receive meeting materials or written consents related to such matters.
(f) Any approvals by (i) 2018 Buyer or (ii) the Managers appointed by 2018 Buyer, pursuant to the terms of the Operating Agreement shall be deemed the consent of Carlyle Buyer for any representations or warranties that are made as purposes of a specified datethis Section 5.01.
Appears in 1 contract
Samples: Membership Interest Purchase Agreement (American International Group Inc)
Covenants Relating to Conduct of Business. Section 7.01. 5.1 Conduct of Business by the CompanyCompany Pending the Merger. From Except as otherwise expressly contemplated by this Agreement or consented to in advance by Parent (which consent is in writing or subsequently confirmed in writing), which consent shall not be unreasonably withheld, during the period from the date hereof until of this Agreement through the Closingearlier of the time that the change in composition of the Board of Directors of the Company contemplated by Section 6.8 has occurred and the Effective Time, the Company shall in all material respects carry on its business in, and not enter into any material transaction other than in accordance with, the Subsidiaries shall conduct their business in the regular and ordinary course and, to the extent consistent with past practice in compliance with all applicable laws and shall therewith, use their its reasonable best efforts to preserve intact their its current business organizations and relationships with third parties and to organization, keep available the services of their present its current officers and employeesemployees and preserve its relationships with customers, suppliers and others having business dealings with it. Without limiting the generality of the foregoing, from the date hereof until the Closing and except as otherwise expressly contemplated by this Agreement or (including the other Transaction Agreements, as may result from the consummation of the Transactions, as set forth in Section 7.01 of the Company Disclosure Schedule, or as otherwise consented to in writing by Parent (except if such consent would be inconsistent with applicable lawtime period specified above), such consent not to be unreasonably withheld with respect to the granting of IRUs in fiber and/or conduit by the Company or the Subsidiaries, the Company shall not, without the prior consent of Parent (which consent is in writing or subsequently confirmed in writing), which consent shall not and shall cause the Subsidiaries not tobe unreasonably withheld:
(ai) adopt declare, set aside or propose pay any change dividends on, or make any other actual, constructive or deemed distributions in respect of, any of its articles capital stock, or otherwise make any payments to stockholders of incorporationthe Company in their capacity as such, bylaws (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 other securities thereof or any rights, warrants or options to acquire any such shares or other organizational documentssecurities;
(b) issue, deliver, sell, pledge pledge, dispose of or transfer or authorize or propose the issuance, delivery, sale, pledge or transfer of otherwise encumber any shares of its capital stock of stock, any class other voting securities or equity equivalent or any securities convertible into or exercisable forinto, or any rights, warrants, warrants or options or other rights to acquire, any such shares shares, voting securities or enter into any agreement with respect to the foregoing convertible securities or equity equivalent (other than (i) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on during the date hereof in accordance with their present terms, (ii) as required by Contracts in effect as of period from the date of this Agreement that are listed in Section 4.05 through the Effective Time upon the exercise of the Company Disclosure Schedule and (iii) the issuance of capital stock of the Company as a dividend in respect of Preferred Stock Options or Warrants outstanding on the date hereof of this Agreement in accordance with its present their current terms);
(ic) amend or change its Certificate of Incorporation or Bylaws;
(d) acquire (or agree to acquire by mergermerging or consolidating with, consolidation or acquisition by purchasing a substantial portion of stock the assets of or assets) equity in, or by any other manner, any business or any corporation, partnership partnership, association or other business organization or division thereofthereof or otherwise acquire or agree to acquire any assets, in each case that are material, individually or in the aggregate, to the Company;
(iie) sell, lease or otherwise dispose of a Subsidiary of, or (iii) agree to sell, lease or otherwise dispose of, any of an amount of its assets that are material, individually or securities, including IRUs, for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), except for transactions in the ordinary course consistent with past practiceaggregate, to the Company;
(d) merge or consolidate with any other Person;
(ef) make any investment, whether by purchase of stock commitment or securities, contributions to capital enter into any contract or any property transfer agreement except (other than investments in cash or cash equivalents with a maturity of less than 90 days or investments in wholly-owned Subsidiaries made, in each case, i) in the ordinary course of business consistent with past practice), practice or purchase (ii) for an amount capital expenditures to be made in excess fiscal 1998 as identified in a capital expenditure budget previously delivered to Parent;
(g) incur any indebtedness for borrowed money or guarantee any such indebtedness or issue or sell any debt securities or guarantee any debt securities of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), any property or assets of any other individual or entityothers, except for inventory purchased for resale borrowings or guarantees incurred in the ordinary course of business consistent with past practice under financing arrangements in existence on the date hereof, or make any loans, advances or capital contributions to, or investments in, any other person, other than in the ordinary course of business consistent with past practice;
(fh) enter into any agreement except as may be required as a result of a change in law or arrangement that limits or otherwise restricts the Company or pursuant to GAAP, change any of the Subsidiaries accounting principles or any of their respective Affiliates or successors thereto or that practices used by its terms could, after the Effective Time, limit or restrict Parent or the Company or any of their respective Affiliates or any successor thereto, from engaging or competing in any line of business or in any geographic area;
(g) other than in the ordinary course of business consistent with past practice, waive, release or relinquish any material right;
(h) other than in the ordinary course of business consistent with past practice, modify or change in any material respect any existing material license, lease, contract, or other agreementit;
(i) enter into make any agreements involving aggregate expenditures tax election or receipts of more than $100,000 individually settle or $500,000 in the aggregate (or, with respect to (i) compromise any Cost of Services Contract, $1,000,000 and (ii) switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any agreements in the ordinary course of business consistent with past practice, including but not limited to installation fees and customer premise equipment, in each case, associated with new customers and in the ordinary course of business consistent with past practicematerial income tax liability;
(j) create, incur or assume, or execute any new guarantee of, any Indebtedness in excess of $100,000 in the aggregate (other than indebtedness for borrowed money owing to W or any of its Affiliates) or prepay any Indebtedness;
(k) other than pursuant to arrangements existing on the date hereof, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for obligations of any other person (other than any Subsidiary) in an amount in excess of $100,000;
(l) make any loans or advances other than (i) loans or advances to wholly-owned Subsidiaries made in the ordinary course of business consistent with past practice and (ii) routine salary, travel and expense advances to Company Employees in the ordinary course of business consistent with past practice;
(i) engage in any transaction, or enter into any contract, agreement or arrangement (other than this Agreement, the Transactions and the incurrence of indebtedness for borrowed money owing to W or any of its Affiliates and transactions pursuant to any such contract, agreement or arrangement entered into on or prior to the date hereof), with any Affiliate, (ii) engage in any transaction, or enter into any contract, agreement or arrangement, with any portfolio company of W that is not on arm's length terms and in the ordinary course of business, or (iii) amend, waive or relinquish any rights relating to any such transaction, contract, agreement or arrangement referred to in clause (i) or (ii) that will remain outstanding after the Closing in accordance with Section 8.05;
(n) authorize any new capital expenditures which, individually, are greater than $100,000 or, in the aggregate, would cause total capital expenditures for year ending December 31, 2003 to exceed $500,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any capital expenditures in the ordinary course of business consistent with past practice;
(o) split, combine or reclassify any shares of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, other than (i) cash dividends and distributions by a wholly-owned Subsidiary to the Company or to a Subsidiary all of the capital stock which is owned directly or indirectly by the Company or (ii) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms; or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its securities or any securities of the Subsidiaries;
(p) (i) increase the compensation or fringe benefits of any Company Employee (except for (x) increases in salary or wages in the ordinary course of business consistent with past practice, (y) the payment of accrued or earned but unpaid bonuses and (z) stay bonuses or similar retention payments in an amount not to exceed $10,000 with respect to any individual payment and $100,000 in the aggregate with respect to all such payments), (ii) grant any severance or termination pay to any Company Employee, (iii) loan or advance any money or other property to any Company Employee (other than routine salary, travel and expense advances to Company Employees in the ordinary course of business and consistent with past practice), (iv) establish, adopt, enter into, amend or terminate any Company Plan, collective bargaining or labor agreement 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 of this Agreement (other than as may be required by the terms of an existing Company Plan or collective bargaining agreement, or as may be required by applicable law or in order to qualify under Sections 401 and 501 of the Code), or (v) grant any equity or equity-based awards, other than in the cases of clauses (i) through (v) pursuant to commitments of the Company or any Subsidiary existing on the date hereof required by contracts set forth in Section 4.08(k) or Section 4.12 of the Company Disclosure Schedule;
(q) pay, discharge or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice of liabilities reflected or reserved against in in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company referred to in Section 4.07 or liabilities incurred in the ordinary course of businessbusiness consistent with past practice;
(rk) make increase in any manner the compensation or change fringe benefits of any tax election of its directors, officers and other key employees or settle pay any pension or compromise retirement allowance not required by any income tax liability;
(s) existing plan or agreement to any such employees, or become a party to, amend or commit itself to any pension, retirement, profit-sharing or welfare benefit plan or agreement or employment agreement with or for the benefit of any employee, other than increases in the compensation of employees who are not officers or directors of the Company made in the ordinary course of business consistent with past practice, change or (except pursuant to the terms of preexisting plans or agreements) accelerate the vesting of any method of accounting, accounting policy compensation or accounting practice, except for any such change required by reason of a concurrent change in GAAP as concurred with by the Company's independent auditorsbenefit;
(tl) fail except in connection with the exercise of its fiduciary duties by the Board of Directors of the Company as set forth in Section 5.2, waive, amend or allow to maintain insurance coverage at presently existing levels;
(u) make lapse any repayments of principal to W term or its Affiliates in respect condition of any Indebtedness owed confidentiality or "standstill" agreement to W or its Affiliates or any payment of interest accrued in respect of such Indebtedness;
(v) agree or commit to do any of which the foregoingCompany is a party; or
(wm) knowingly take take, or agree in writing or commit otherwise to take take, any of the foregoing actions or any action that which would make any representation and warranty of W or the Company hereunder inaccurate in any material respect at, or as of any time prior to, the Closing, except for any representations or warranties that are made as of a specified datethe Company contained in this Agreement untrue or incorrect at or prior to the Effective Time.
Appears in 1 contract
Covenants Relating to Conduct of Business. Section 7.01. 4.1 Conduct of Business of Agouron Pending the CompanyMerger. From Agouron covenants and agrees that, during the period from the date hereof until to the ClosingEffective Time, unless Wxxxxx-Xxxxxxx shall otherwise agree in writing in advance, the Company businesses of Agouron and the its Subsidiaries shall conduct their business in be conducted only in, and Agouron and its Subsidiaries shall not take any action except in, the ordinary course of business and in a manner consistent with past practice and in compliance with all applicable laws laws; and Agouron and its Subsidiaries shall each use their its commercially reasonable best efforts to preserve substantially intact their the business organizations organization of Agouron and relationships with third parties and its Subsidiaries, to keep available the services of their the present officers officers, significant employees and employees. Without limiting consultants of Agouron and its Subsidiaries and to preserve the generality present relationships of Agouron and its subsidiaries with such of the foregoingcustomers, from suppliers, licensors, licensees, or distributors with which Agouron or any of its Subsidiaries has significant business relations. By way of amplification and not limitation, neither Agouron nor any of its Subsidiaries shall, between the date hereof until the Closing and except as expressly contemplated by of this Agreement or and the other Transaction AgreementsEffective Time, as may result from the consummation of the Transactions, except as set forth in Section 7.01 4.1 of the Company Agouron Disclosure Schedule, directly or as otherwise consented indirectly do, or propose or commit to in writing by Parent (except if such do, any of the following without the prior written consent would be inconsistent with applicable law)of Wxxxxx-Xxxxxxx, such which consent shall not to be unreasonably withheld with respect to the granting of IRUs in fiber and/or conduit by the Company or the Subsidiaries, the Company shall not and shall cause the Subsidiaries not to:delayed (but may be withheld):
(a) adopt Amend its Certificate of Incorporation or propose any change in its articles of incorporation, bylaws By-Laws or other equivalent organizational documents;
(b) issueIssue, deliver, sell, pledge pledge, dispose of or transfer encumber, or authorize or propose commit to the issuance, delivery, sale, pledge pledge, disposition or transfer of encumbrance of, (A) any shares of its capital stock of any class or any securities convertible into or exercisable forclass, or any rightsoptions, warrants, options convertible securities or other rights of any kind to acquireacquire any shares of capital stock, or any such other ownership interest (including but not limited to stock appreciation rights or phantom stock), of Agouron or any of its Subsidiaries (except for the issuance of up to 6,108,552 shares of Agouron Common Stock issuable upon exercise of outstanding options granted under the Agouron Stock Option Plans) or enter into (B) any agreement assets of Agouron or any of its Subsidiaries, except for sales of products and payments made pursuant to existing contracts in the ordinary course of business and in a manner consistent with past practice;
(c) Declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to the foregoing other than any of its capital stock;
(id) the issuance Reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms, (ii) as required by Contracts in effect as of the date of this Agreement that are listed in Section 4.05 of the Company Disclosure Schedule and (iii) the issuance of its capital stock of the Company as a dividend in respect of Preferred Stock outstanding on the date hereof in accordance with its present termsstock;
(i) acquire Acquire (by merger, consolidation or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof, (ii) sell, lease or otherwise dispose of a Subsidiary thereof or (iii) sell, lease or otherwise dispose of an amount of assets or securities, including IRUs, for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), except for transactions in the ordinary course consistent with past practice;
(d) merge or consolidate with any other Person;
(e) make any investment, whether by purchase of stock or securities, contributions to capital or any property transfer (other than investments in cash or cash equivalents with a maturity of less than 90 days or investments in wholly-owned Subsidiaries made, in each case, inventory in the ordinary course of business consistent with past practicebusiness) any assets; (ii) transfer, lease, mortgage, or otherwise dispose of or subject to any lien any of its assets (including capital stock of Subsidiaries), (iii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee (other than guarantees for purchase for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), any property or assets of any other individual or entity, except for inventory purchased for resale orders made in the ordinary course of business consistent with past practice;
(fbusiness) enter into any agreement or arrangement that limits endorse, or otherwise restricts as an accommodation become responsible for, the Company or obligations of any of the Subsidiaries or any of their respective Affiliates or successors thereto or that by its terms could, after the Effective Time, limit or restrict Parent or the Company or any of their respective Affiliates or any successor thereto, from engaging or competing in any line of business or in any geographic area;
(g) other than in the ordinary course of business consistent with past practice, waive, release or relinquish any material right;
(h) other than in the ordinary course of business consistent with past practice, modify or change in any material respect any existing material license, lease, contractperson, or other agreement;
(i) enter into make any agreements involving aggregate expenditures loans, advances or receipts of more than $100,000 individually or $500,000 in the aggregate (or, with respect to (i) any Cost of Services Contract, $1,000,000 and (ii) switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any agreements in the ordinary course of business consistent with past practice, including but not limited to installation fees and customer premise equipment, in each case, associated with new customers and in the ordinary course of business consistent with past practice;
(j) create, incur or assumecapital contributions to, or execute any new guarantee ofinvestments in, any Indebtedness in excess of $100,000 in the aggregate (other than indebtedness for borrowed money owing to W or any of its Affiliates) or prepay any Indebtedness;
(k) other than pursuant to arrangements existing on the date hereof, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for obligations of any other person (other than any Subsidiary) borrowings incurred with the prior written consent of Wxxxxx-Xxxxxxx (which consent shall not be unreasonably withheld or delayed), in an aggregate amount not to exceed $5,000,000); (iv) enter into any material contract or agreement or enter into, or amend or terminate any joint venture arrangements; (v) enter into any agreement as licensee or licensor, (vi) enter into any commitments or transactions material, individually or in the aggregate, to Agouron and its Subsidiaries taken as a whole; (vii) authorize any single capital expenditure which is in excess of $100,000;
(l) make any loans 300,000 or advances other than (i) loans or advances to wholly-owned Subsidiaries made in the ordinary course of business consistent with past practice and (ii) routine salary, travel and expense advances to Company Employees in the ordinary course of business consistent with past practice;
(i) engage in any transaction, or enter into any contract, agreement or arrangement (other than this Agreement, the Transactions and the incurrence of indebtedness for borrowed money owing to W or any of its Affiliates and transactions pursuant to any such contract, agreement or arrangement entered into on or prior to the date hereof), with any Affiliate, (ii) engage in any transaction, or enter into any contract, agreement or arrangement, with any portfolio company of W that is not on arm's length terms and in the ordinary course of business, or (iii) amend, waive or relinquish any rights relating to any such transaction, contract, agreement or arrangement referred to in clause (i) or (ii) that will remain outstanding after the Closing in accordance with Section 8.05;
(n) authorize any new capital expenditures which, individually, are greater than $100,000 orwhich are, in the aggregate, would cause total in excess of $750,000 for Agouron and its Subsidiaries taken as a whole other than capital expenditures for year ending December 31reflected in Agouron's fiscal 1998 budget, 2003 a copy of which has been delivered to exceed $500,000 Wxxxxx-Xxxxxxx; or (orviii) enter into or amend (other than a non-material amendment) any contract, agreement, commitment or arrangement with respect to switch software upgrades for purposes any of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000matters set forth in this Section 4.1(e), other than any capital expenditures in the ordinary course of business consistent with past practice;
(of) split, combine or reclassify any shares of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, other than (i) cash dividends and distributions by a wholly-owned Subsidiary Except to the Company extent required under this Agreement or to a Subsidiary all of the capital stock which is owned directly under any existing employee and director benefit plans, agreements or indirectly by the Company or (ii) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding arrangements as in effect on the date hereof in accordance with their present terms; or redeemof this Agreement and previously delivered to Wxxxxx-Xxxxxxx, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its securities or any securities of the Subsidiaries;
(p) (i) increase the compensation or fringe benefits of any Company Employee (of its directors, officers or employees, except for (x) increases in salary or wages of employees of Agouron or its Subsidiaries in the ordinary course of business consistent in accordance with past practicepractice and bonuses paid for fiscal year 1998 in accordance with Section 5.6(a) hereof, (y) the payment of accrued or earned but unpaid bonuses and (z) stay bonuses or similar retention payments in an amount not to exceed $10,000 with respect to any individual payment and $100,000 in the aggregate with respect to all such payments), (ii) grant any severance or termination pay not currently required to be paid under existing severance plans or enter into, or amend, any Company Employeeemployment, (iii) loan consulting or advance severance agreement or arrangement with any money present or former director, officer or other property to employee of Agouron or any Company Employee (other than routine salaryof its Subsidiaries, travel and expense advances to Company Employees in the ordinary course of business and consistent with past practice), (iv) or establish, adopt, enter into, into or amend or terminate any Company Plancollective bargaining, collective bargaining bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, welfare, severance or labor agreement or any other plan, agreement, program, policy, trust, fund fund, policy or other arrangement that would be a Company Plan if it were in existence as for the benefit of the date of this Agreement any directors, officers or employees;
(other than g) Except as may be required by the terms as a result of an existing Company Plan or collective bargaining agreement, or as may be required by applicable a change in law or in order generally accepted accounting principles, change any of the accounting practices or principles used by it;
(h) Take, or permit any of its Subsidiaries to qualify under Sections 401 and 501 take, any action that (without regard to any action taken or agreed to be taken by Wxxxxx-Xxxxxxx or any of its affiliates) would prevent (x) Wxxxxx- Xxxxxxx from accounting for the business combination to be effected by the Merger as a pooling of interests or (y) the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code), or (v) grant any equity or equity-based awards, other than in the cases of clauses ;
(i) through (v) pursuant Make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, change any annual tax accounting period, change any method of Tax accounting, enter into any closing agreement relating to commitments any Tax, surrender any right to claim a Tax refund, or consent to any extension or waiver of the Company limitations period applicable to any Tax claim or any Subsidiary existing on the date hereof required by contracts set forth in Section 4.08(k) or Section 4.12 of the Company Disclosure Scheduleassessment;
(qj) paySettle or compromise any pending or threatened suit, action or claim which is material or which relates to the transactions contemplated hereby;
(k) Adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of Agouron or any of its Subsidiaries (other than the Merger);
(l) Pay, discharge or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction satisfaction, in the ordinary course of business and consistent with past practice, of liabilities reflected or reserved against in the consolidated financial statements of the Company referred to in Section 4.07 Agouron or liabilities incurred in the ordinary course of business;
(r) make or change any tax election or settle or compromise any income tax liability;
(s) other than in the ordinary course of business and consistent with past practice, change any method of accounting, accounting policy or accounting practice, except for any such change required by reason of a concurrent change in GAAP as concurred with by the Company's independent auditors;
(t) fail to maintain insurance coverage at presently existing levels;
(u) make any repayments of principal to W or its Affiliates in respect of any Indebtedness owed to W or its Affiliates or any payment of interest accrued in respect of such Indebtedness;
(v) agree or commit to do any of the foregoing; or
(w) knowingly take or agree or commit to take any action that would make any representation and warranty of W or the Company hereunder inaccurate in any material respect at, or as of any time prior to, the Closing, except for any representations or warranties that are made as of a specified date.
Appears in 1 contract
Covenants Relating to Conduct of Business. Section 7.01. 7.1 Conduct of Business
(a) Conduct of Business by In2itive. During the Company. From period from the date hereof until of this Agreement to the ClosingClosing Date of the Acquisition Agreement, the Company and the Subsidiaries Shareholders shall conduct their ensure that In2itive shall carry on its business in the usual, regular and ordinary course in substantially the same manner as heretofore conducted and, to the extent consistent with past practice in compliance with therewith, use all applicable laws and shall use their reasonable best efforts to preserve intact their its current business organizations and relationships with third parties and to organizations, keep available the services of their present officers its current managers and employees, preserve its relationships with customers, suppliers, licensor, licensees, distributors and others having business dealings with it to the end that its goodwill and ongoing businesses shall be unimpaired at the Closing Date of the Acquisition Agreement. Without limiting the generality of the foregoing, during the period from the date hereof until of this Agreement to the Closing and except as expressly contemplated by this Agreement or the other Transaction Agreements, as may result from the consummation Date of the TransactionsAcquisition Agreement, as set forth in Section 7.01 of the Company Disclosure Schedule, or as otherwise consented to in writing by Parent (except if such consent would be inconsistent with applicable law), such consent not to be unreasonably withheld with respect to the granting of IRUs in fiber and/or conduit by the Company or the Subsidiaries, the Company In2itive shall not and shall cause the Subsidiaries not tonot:
(ai) adopt declare, set aside or propose pay any change dividends on, or make any other distributions in respect of, any of its articles of incorporation, bylaws or other organizational documentscapital stock;
(bii) 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 purchase, redeem or otherwise acquire any shares of capital stock of In2itive or any other securities thereof or any rights, warrants or options to acquire any such shares or other securities;
(iii) issue, deliver, sell, pledge or transfer or authorize or propose the issuance, delivery, sale, pledge or transfer of otherwise encumber any shares of its capital stock of stock, any class other voting securities or any securities convertible into or exercisable forinto, or any rights, warrants, or options or other rights to acquire, any such shares shares, voting securities or enter into any agreement with respect to the foregoing other than (i) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms, (ii) as required by Contracts in effect as of the date of this Agreement that are listed in Section 4.05 of the Company Disclosure Schedule and (iii) the issuance of capital stock of the Company as a dividend in respect of Preferred Stock outstanding on the date hereof in accordance with its present termsconvertible securities;
(iiv) other than as disclosed elsewhere in this Agreement, amend its Articles of Incorporation, By-laws or other comparable charter or organizational documents;
(v) acquire or agree to acquire (A) by mergermerging or consolidating with, consolidation or acquisition by purchasing a substantial portion of stock the assets of, or assets) by any other manner, any business or any corporation, partnership partnership, joint venture, association or other business organization or division thereof, (ii) sell, lease or otherwise dispose of a Subsidiary thereof or (iiiB) sell, lease any assets that individual or otherwise dispose of an amount of assets or securities, including IRUs, for an amount in excess of $100,000 (or, with respect the aggregate are material to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000)In2itive, except for transactions in the ordinary course consistent with past practice;
(d) merge or consolidate with any other Person;
(e) make any investment, whether by purchase purchases of stock or securities, contributions to capital or any property transfer (other than investments in cash or cash equivalents with a maturity of less than 90 days or investments in wholly-owned Subsidiaries made, in each case, in the ordinary course of business consistent with past practice), or purchase for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), any property or assets of any other individual or entity, except for inventory purchased for resale in the ordinary course of business consistent with past practice;
(fvi) enter into any agreement or arrangement that limits sell, lease, license, mortgage or otherwise restricts the Company encumber or subject to any lien or otherwise dispose of any of the Subsidiaries its properties or any of their respective Affiliates or successors thereto or that by its terms could, after the Effective Time, limit or restrict Parent or the Company or any of their respective Affiliates or any successor thereto, from engaging or competing in any line of business or in any geographic areaassets;
(gvii) other than (A) incur any indebtedness, except for short term borrowings incurred in the ordinary course of business consistent with past practice, waiveor (B) make any loans, release advances or relinquish capital contributions to, or investments in, any material rightother person;
(hviii) other than in the ordinary course of business consistent with past practice, modify make or change in agree to make any material respect any existing material license, lease, contract, equipment leases or other agreement;
(i) enter into any agreements involving aggregate expenditures or receipts of more than $100,000 individually or $500,000 in the aggregate (or, with respect to (i) any Cost of Services Contract, $1,000,000 and (ii) switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any agreements in the ordinary course of business consistent with past practice, including but not limited to installation fees and customer premise equipment, in each case, associated with new customers and in the ordinary course of business consistent with past practice;
(j) create, incur or assume, or execute any new guarantee of, any Indebtedness capital expenditure or capital expenditures which are individually in excess of $100,000 5,000 or in the aggregate (other than indebtedness for borrowed money owing to W or any of its Affiliates) or prepay any Indebtedness;
(k) other than pursuant to arrangements existing on the date hereof, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for obligations of any other person (other than any Subsidiary) in an amount are in excess of $100,00010,000;
(lix) make any loans tax election that could reasonably be expected to have a material adverse effect or advances other than (i) loans settle or advances to wholly-owned Subsidiaries made in the ordinary course of business consistent with past practice and (ii) routine salary, travel and expense advances to Company Employees in the ordinary course of business consistent with past practicecompromise any income tax liability;
(i) engage in any transaction, or enter into any contract, agreement or arrangement (other than this Agreement, the Transactions and the incurrence of indebtedness for borrowed money owing to W or any of its Affiliates and transactions pursuant to any such contract, agreement or arrangement entered into on or prior to the date hereof), with any Affiliate, (ii) engage in any transaction, or enter into any contract, agreement or arrangement, with any portfolio company of W that is not on arm's length terms and in the ordinary course of business, or (iii) amend, waive or relinquish any rights relating to any such transaction, contract, agreement or arrangement referred to in clause (i) or (ii) that will remain outstanding after the Closing in accordance with Section 8.05;
(n) authorize any new capital expenditures which, individually, are greater than $100,000 or, in the aggregate, would cause total capital expenditures for year ending December 31, 2003 to exceed $500,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any capital expenditures in the ordinary course of business consistent with past practice;
(o) split, combine or reclassify any shares of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, other than (i) cash dividends and distributions by a wholly-owned Subsidiary to the Company or to a Subsidiary all of the capital stock which is owned directly or indirectly by the Company or (ii) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms; or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its securities or any securities of the Subsidiaries;
(p) (i) increase the compensation or fringe benefits of any Company Employee (except for (x) increases in salary or wages in the ordinary course of business consistent with past practice, (y) the payment of accrued or earned but unpaid bonuses and (z) stay bonuses or similar retention payments in an amount not to exceed $10,000 with respect to any individual payment and $100,000 in the aggregate with respect to all such payments), (ii) grant any severance or termination pay to any Company Employee, (iii) loan or advance any money or other property to any Company Employee (other than routine salary, travel and expense advances to Company Employees in the ordinary course of business and consistent with past practice), (iv) establish, adopt, enter into, amend or terminate any Company Plan, collective bargaining or labor agreement 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 of this Agreement (other than as may be required by the terms of an existing Company Plan or collective bargaining agreement, or as may be required by applicable law or in order to qualify under Sections 401 and 501 of the Code), or (v) grant any equity or equity-based awards, other than in the cases of clauses (i) through (v) pursuant to commitments of the Company or any Subsidiary existing on the date hereof required by contracts set forth in Section 4.08(k) or Section 4.12 of the Company Disclosure Schedule;
(q) pay, discharge discharge, settle or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction satisfaction, in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reflected or reserved against in in, or contemplated by, the consolidated most recent Financial Statements or incurred since the date of such financial statements of the Company referred to in Section 4.07 or liabilities incurred in the ordinary course of business;
(r) make or change any tax election or settle or compromise any income tax liability;
(s) other than in the ordinary course of business consistent with past practice, change any method of accounting, accounting policy or accounting practice, except for any such change required by reason of a concurrent change in GAAP as concurred with by the Company's independent auditors;
(txi) fail except in the ordinary course of business, modify, amend or terminate any material contract or agreement to maintain insurance coverage at presently existing levelswhich In2itive is a party or waive, release or assign any material rights or claims thereunder;
(uxii) make take any repayments of principal action that (without giving effect to W any action taken or its Affiliates in respect of any Indebtedness owed agreed to W or its Affiliates be taken by SPSS or any payment of interest accrued in respect its affiliates) would prevent SPSS from accounting for the business combination to be effected by the Acquisition as a pooling of such Indebtedness;
(vinterests or from treating the Acquisition as a "reorganization" under Section 368(a) agree or commit to do any of the foregoingCode; or
(wxiii) knowingly take any action to institute any new severance or termination pay practices with respect to any directors, managers or employees of In2itive or to increase the benefits payable under its severance or termination pay practices in effect on the date hereof; and
(xiv) (except for salary increases in the ordinary course of business and consistent with past practice) adopt or amend, in any material respect, except as may be required by applicable law or regulation, any collective bargaining, bonus, profit sharing, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment or other employee benefit plan, agreement, trust, fund, plan or arrangement for the benefit or welfare of any directors, managers or employees.
(xv) authorize any of, or commit or agree or commit to take any action that would make any representation and warranty of W or the Company hereunder inaccurate in any material respect at, or as of any time prior toof, the Closing, except for any representations or warranties that are made as of a specified date.foregoing actions;
Appears in 1 contract
Samples: Stock Purchase Agreement (SPSS Inc)
Covenants Relating to Conduct of Business. Section 7.01. 5.1 Conduct of Business by the CompanyCompany Pending the Merger. From Except as expressly permitted by clauses (i) through (xviii) of this Section 5.1, during the period from the date hereof until of this Agreement through the ClosingEffective Time, the Company and the Subsidiaries shall conduct their in all material respects carry on its business in the ordinary course of its business as currently conducted and, to the extent consistent with past practice in compliance with all applicable laws and shall therewith, use their reasonable best efforts to preserve intact their its current business organizations and relationships with third parties and to organizations, keep available the services of their present its current officers and employeesemployees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time. Without limiting the generality of the foregoing, from the date hereof until the Closing and except as expressly contemplated by this Agreement or the other Transaction Agreements, as may result from the consummation of the Transactions, as set forth in Section 7.01 of the Company Disclosure Schedule, or as otherwise consented to in writing by Parent (except if such consent would be inconsistent with applicable law), such consent not to be unreasonably withheld with respect to the granting of IRUs in fiber and/or conduit by the Company or the Subsidiaries, the Company shall not and shall cause without the Subsidiaries not toprior written consent of Parent:
(ai) adopt (A) declare, set aside or propose pay any change dividends on, or make any other actual, constructive or deemed distributions in respect of, any of its articles capital stock, or otherwise make any payments to its stockholders in their capacity as such, (B) split, combine or reclassify any of incorporationits capital stock or issue or authorize the issuance of any other securities in respect of, bylaws in lieu of or in substitution for shares of its capital stock or (C) purchase, redeem or otherwise acquire any shares of capital stock of the Company or any other securities thereof or any rights, warrants or options to acquire any such shares or other organizational documentssecurities;
(bii) issue, deliver, sell, pledge pledge, grant, dispose of or transfer or authorize or propose the issuance, delivery, sale, pledge or transfer of otherwise encumber any shares of its capital stock of stock, any class other voting securities or equity equivalent or any securities convertible into or exercisable forinto, or any rights, warrants, warrants or options or other rights to acquire, acquire any such shares shares, voting securities, equity equivalent or enter into any agreement with respect to the foregoing convertible securities, other than (iA) the issuance of shares of Company Common Stock upon the exercise of stock options Company Stock Options or warrants, or conversion of Preferred Stock, the Company Warrant outstanding on the date hereof in accordance with their present terms, (ii) as required by Contracts in effect as of the date of this Agreement that are listed in Section 4.05 of the Company Disclosure Schedule accordance with their current terms and (iiiB) the issuance of capital stock shares of Company Common Stock pursuant to the Company as a dividend in respect of Preferred Stock outstanding on the date hereof Purchase Plan in accordance with its present termsSection 6.5 of this Agreement;
(iiii) amend its charter or by-laws or equivalent organizational documents;
(iv) acquire (or agree to acquire by mergermerging or consolidating with, consolidation or acquisition by purchasing a substantial portion of stock the assets of or assets) equity in, or by any other manner, any business or any corporation, partnership limited liability company, partnership, association or other business organization or division thereof, thereof or otherwise acquire or agree to acquire any assets;
(iiv) sell, lease lease, pledge or otherwise dispose of a Subsidiary or (iii) encumber, or agree to sell, lease lease, pledge or otherwise dispose of an amount or encumber, any of its assets or securities, including IRUs, for an amount with a fair market value in excess of $100,000 (or100,000, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), except for transactions in the ordinary course consistent with past practice;
(d) merge or consolidate with any other Person;
(e) make any investment, whether by purchase of stock or securities, contributions to capital or any property transfer (other than investments in cash or cash equivalents with a maturity sales of less than 90 days or investments in wholly-owned Subsidiaries made, in each case, in the ordinary course of business consistent with past practice), or purchase for an amount in excess of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), any property or assets of any other individual or entity, except for inventory purchased for resale that are in the ordinary course of business consistent with past practice;
(fvi) enter into (A) incur any agreement indebtedness for borrowed money, guarantee any such indebtedness or arrangement that limits make any loans, advances or otherwise restricts the Company capital contributions to, or other investments in, any of the Subsidiaries other person or any of their respective Affiliates or successors thereto or that by its terms couldentity, after the Effective Time, limit or restrict Parent or the Company or any of their respective Affiliates or any successor thereto, from engaging or competing in any line of business or in any geographic area;
(g) other than in the ordinary course of business consistent with past practicepractices and, waivein the case of indebtedness and guarantees, release in an amount not to exceed $250,000, or relinquish any material right;
(hB) invest its cash or reinvest its maturing investments in investments other than in certificates of deposit, direct obligations of the ordinary course United States government, money market instruments and obligations of business consistent with past practiceany corporation which at the time of purchase are rated AA or better by Standard & Poor's Corporation, modify or change in any material respect any existing material license, lease, contract, or other agreement;
(i) enter into any agreements involving aggregate expenditures or receipts of more than $100,000 individually or $500,000 in the aggregate (or, with respect to (i) any Cost of Services Contract, $1,000,000 and (ii) switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any agreements in the ordinary course of business consistent with past practice, including but not limited to installation fees and customer premise equipmentInc., in each case, associated with new customers and in the ordinary course having maturity of business consistent with past practiceno more than 30 days;
(jvii) createalter (through merger, incur liquidation, reorganization, restructuring or assume, in any other fashion) the corporate structure or execute ownership of the Company or form any new guarantee of, any Indebtedness in excess of $100,000 in the aggregate (other than indebtedness for borrowed money owing to W or any of its Affiliates) or prepay any IndebtednessSubsidiary;
(kviii) other than pursuant to arrangements existing on the date hereofexcept as provided in Section 6.5, assumeenter into or adopt any, guaranteeor amend any existing, endorse severance plan, agreement or otherwise become liable arrangement or responsible (whether directly, contingently enter into or otherwise) for obligations of amend any other person (other than any Subsidiary) in an amount in excess of $100,000Company Plan or Compensation Agreement;
(lix) make any loans increase the compensation payable or advances to become payable to its directors, officers, employees, consultants or other than service providers (i) loans or advances to wholly-owned Subsidiaries made except for increases in the ordinary course of business consistent with past practice and (ii) routine salary, travel and expense advances to in salaries or wages of employees of the Company Employees in who are not officers of the ordinary course of business consistent with past practice;
(i) engage in any transaction, or enter into any contract, agreement or arrangement (other than this Agreement, the Transactions and the incurrence of indebtedness for borrowed money owing to W or any of its Affiliates and transactions pursuant to any such contract, agreement or arrangement entered into on or prior to the date hereof), with any Affiliate, (ii) engage in any transaction, or enter into any contract, agreement or arrangement, with any portfolio company of W that is not on arm's length terms and in the ordinary course of business, or (iii) amend, waive or relinquish any rights relating to any such transaction, contract, agreement or arrangement referred to in clause (iCompany) or (ii) that will remain outstanding after the Closing in accordance with Section 8.05;
(n) authorize any new capital expenditures which, individually, are greater than $100,000 or, in the aggregate, would cause total capital expenditures for year ending December 31, 2003 to exceed $500,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any capital expenditures in the ordinary course of business consistent with past practice;
(o) split, combine or reclassify any shares of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, other than (i) cash dividends and distributions by a wholly-owned Subsidiary to the Company or to a Subsidiary all of the capital stock which is owned directly or indirectly by the Company or (ii) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms; or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its securities or any securities of the Subsidiaries;
(p) (i) increase the compensation or fringe benefits of any Company Employee (except for (x) increases in salary or wages in the ordinary course of business consistent with past practice, (y) the payment of accrued or earned but unpaid bonuses and (z) stay bonuses or similar retention payments in an amount not to exceed $10,000 with respect to any individual payment and $100,000 in the aggregate with respect to all such payments), (ii) grant any severance or termination pay to to, or enter into any Company Employee, (iii) loan or advance any money employment or other property to agreement with, any Company Employee (director, officer, employee, consultant or other than routine salaryservice provider of the Company, travel and expense advances to Company Employees in the ordinary course of business and consistent with past practice), (iv) or establish, adopt, enter into, or, except as may be required to comply with applicable law, amend or take action to enhance or accelerate any rights or benefits under, any labor, collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer, employee, consultant or other service provider;
(x) knowingly violate or knowingly fail to perform any obligation or duty imposed upon it by any applicable material federal, state, local or foreign law, rule, regulation, guideline or ordinance;
(xi) make any change to accounting policies or procedures (other than actions required to be taken by GAAP);
(xii) prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(xiii) settle or compromise any Tax liability;
(xiv) settle or compromise any claims or litigation in excess of $50,000 or commence any litigation or proceedings;
(xv) enter into or amend any agreement or contract (i) having a term in excess of 12 months and which is not terminable by the Company without penalty or premium by notice of 60 days or less or (ii) which involves or is expected to involve payments of $25,000 or more during the term thereof; enter into, amend or terminate any Company Plan, collective bargaining or labor other agreement or contract material to the Company, taken as a whole; or purchase any planreal property, agreement, program, policy, trust, fund or other arrangement that would be a Company Plan if it were in existence as of the date of this Agreement make or agree to make any new capital expenditure or expenditures (other than as may be required by the terms purchase of an existing Company Plan or collective bargaining agreement, or as may be required by applicable law or in order to qualify under Sections 401 and 501 of the Code), or (vreal property) grant any equity or equity-based awards, other than which in the cases aggregate are in excess of clauses (i) through (v) pursuant to commitments of the Company or any Subsidiary existing on the date hereof required by contracts set forth in Section 4.08(k) or Section 4.12 of the Company Disclosure Schedule$50,000;
(qxvi) pay, discharge or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business of any such claims, liabilities reflected or reserved against in the consolidated financial statements of the Company referred to in Section 4.07 or liabilities incurred in the ordinary course of business;
(r) make or change any tax election or settle or compromise any income tax liability;
(s) other than obligations in the ordinary course of business consistent with past practice, change practice or in accordance with their terms;
(xvii) file any method application for national coverage under Medicare of accounting, accounting policy or accounting practice, except for any such change required by reason of a concurrent change in GAAP as concurred with by the Company's independent auditors;spine products; or
(txviii) fail to maintain insurance coverage at presently existing levels;
(u) make any repayments of principal to W authorize, recommend, propose or its Affiliates in respect of any Indebtedness owed to W or its Affiliates or any payment of interest accrued in respect of such Indebtedness;
(v) agree or commit announce an intention to do any of the foregoing; or
(w) knowingly take or agree or commit to take any action that would make any representation and warranty of W or the Company hereunder inaccurate in any material respect at, or as enter into any contract, agreement, commitment or arrangement to do any of any time prior to, the Closing, except for any representations or warranties that are made as of a specified dateforegoing.
Appears in 1 contract
Samples: Agreement and Plan of Merger (Oratec Interventions Inc)
Covenants Relating to Conduct of Business. Section 7.01. 4.1 Conduct of Business by the CompanyCompany Pending the Merger. From During the period from the date hereof until of this Agreement through the ClosingEffective Time, the Company shall, and shall cause each of its Subsidiaries, and the Subsidiaries shall conduct their Company Venture, to, carry on its business in the usual, regular and ordinary course in substantially the same manner as heretofore conducted and, to the extent consistent with past practice in compliance with therewith, use all applicable laws and shall use their reasonable best efforts to preserve intact their business organizations and relationships with third parties and to keep available the services of their present its current officers and employeesemployees and, except as otherwise agreed upon by Parent, preserve its relationships with customers, suppliers, licensors, lessors, creditors and others having business dealings with it. Without limiting the generality of the foregoing, from the date hereof until the Closing and except as otherwise expressly contemplated required by this Agreement Agreement, the Company shall not, and shall not permit any of its Subsidiaries, or the other Transaction AgreementsCompany Venture, as may result to, without the prior written consent of Parent which consent shall be granted or denied no later than 10 business days after Parent has received a written request for consent from the consummation Company accompanied by reasonably adequate information to grant or deny such consent:
(a) (i) declare, set aside or pay any dividends on, or make any other actual, constructive or deemed distributions in respect of, any of its capital stock, or otherwise make any payments to its shareholders in their capacity as such (other than dividends and other distributions by wholly-owned Subsidiaries to the Company or its wholly-owned Subsidiaries or by non-wholly-owned Subsidiaries or the Company Venture to the extent required by the terms of their respective organizational documents as of the Transactionsdate hereof), (ii) other than in the case of any wholly-owned Subsidiary, 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) except as set forth in Section 7.01 4.1(a)(iii) of the Company Disclosure ScheduleLetter, purchase, redeem or as otherwise consented to in writing by Parent (except if such consent would be inconsistent with applicable law), such consent not to be unreasonably withheld with respect to the granting acquire any shares of IRUs in fiber and/or conduit by capital stock of the Company or the any of its non wholly-owned Subsidiaries, or the Company shall not and shall cause the Subsidiaries not to:
(a) adopt Venture, or propose any change in its articles of incorporationother securities thereof or any rights, bylaws warrants or options to acquire any such shares or other organizational documentssecurities;
(b) except for shares of Company Common Stock issued pursuant to the Points and Success Earnout as in effect on January 1, 1999, and except as set forth in Section 4.1(b) of the Company Letter, issue, deliver, sell, pledge pledge, dispose of or transfer or authorize or propose the issuance, delivery, sale, pledge or transfer of otherwise encumber any shares of its capital stock of stock, any class other voting securities or equity equivalent or any securities convertible into or exercisable forinto, or any rights, warrants, warrants or options or other rights to acquire, any such shares shares, voting securities, equity equivalent or enter into any agreement with respect to the foregoing convertible securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of employee stock options or warrants, or conversion of Preferred Stock, pursuant to the Company Stock Plans outstanding on the date hereof in accordance with their present terms, (ii) as required by Contracts in effect as of the date of this Agreement that are listed in accordance with their terms as of the date hereof;
(c) amend its articles or certificate of incorporation or by-laws or other comparable organizational documents;
(d) (A) acquire or agree to acquire (i) except as set forth in Section 4.05 4.1(d)(i) of the Company Disclosure Schedule and (iii) the issuance of capital stock Letter, by merging or consolidating with, or by purchasing a substantial portion of the Company assets or properties of or equity in (except as a dividend in respect of Preferred Stock outstanding on the date hereof in accordance with its present terms;
contemplated by clause (iii) acquire (below), or by mergerany other manner, consolidation any business or acquisition of stock or assets) any corporation, partnership partnership, limited liability company, association or other business organization or division thereof, thereof or (ii) sellexcept for the land acquisition, lease or otherwise dispose construction and development projects described in Section 4.1(d)(ii) of a Subsidiary or the Company Letter (iii) sellcollectively, lease or otherwise dispose of an amount of the "Development Projects"), any assets or securitiesproperties that are, including IRUsindividually or in the aggregate, for an amount in excess material to the Company and its Subsidiaries taken as a whole, other than purchases of $100,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), except for transactions inventory that are in the ordinary course of business consistent with past practice;
practice or (dB) merge make any capital contributions to, or consolidate with other investments in, any other Personperson;
(e) make any investmentexcept for the pending approximately $86 million securitization of customer mortgages receivable with Dresdner Kleinwort Benson as placement agent (the "Pending Securitization"), whether by purchase excexx xx described in Section 4.1(e) of stock or securities, contributions to capital or any property transfer (other than investments the Company Letter and except in cash or cash equivalents connection with a maturity the sale and financing of less than 90 days or investments in wholly-owned Subsidiaries made, in each case, customer contracts and mortgages receivable in the ordinary course of business consistent with past practice, and the incurrence of indebtedness permitted by Section 4.1(f), sell, lease, license, mortgage or purchase for an amount in excess of $100,000 (orotherwise encumber or subject to any Lien or otherwise dispose of, with respect or agree to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Actsell, $1,000,000)lease, license, mortgage or otherwise encumber or subject to any Lien or otherwise dispose of, any property or assets of any its assets, other individual or entity, except for inventory purchased for resale than transactions (including the sale of inventory) that are in the ordinary course of business consistent with past practice;
(f) incur any indebtedness for borrowed money, guarantee any such indebtedness, issue or sell any debt securities or warrants or other rights to acquire any debt securities, guarantee any debt securities or make any loans or advances to any other person, or enter into any agreement or arrangement having the economic effect of any of the foregoing, other than (i) indebtedness incurred in the financing of customer contracts and mortgages receivable in the ordinary course of business consistent with past practice; provided, however, that limits or otherwise restricts the Company will not complete any securitization other than the Pending Securitization without first consulting with Parent; provided, further, that in the event Parent provides warehouse financing to the Company at interest rates and terms comparable to the Company's primary warehouse receivables line and in an amount sufficient to permit the Company to finance its ongoing generation of customer contracts and mortgages receivable in the ordinary course of business consistent with past practice through the anticipated closing date of the transactions contemplated by this Agreement without completing a securitization, the Company will not complete any securitization other than the Pending Securitization; provided, further, that if Parent has provided any financing to the Company pursuant to the foregoing proviso and this Agreement is terminated pursuant to a valid termination under Section 7.1, then Parent shall continue any existing financing for the Company for a 90-day period after such termination; (ii) indebtedness and guarantees incurred in connection with financing the acquisition, construction, development and operations of the Development Projects in accordance with the budgets set forth in Section 4.1(f)(ii) of the Company Letter; (iii) indebtedness, loans, advances, guarantees, capital contributions and investments between the Company and any of its wholly-owned Subsidiaries, between any of such wholly-owned Subsidiaries or, to the extent set forth in Section 4.1(f)(iii) of the Company Letter, between (x) the Company or any of its Subsidiaries and (y) any of the Subsidiaries Company's non- wholly-owned Subsidiaries, the VOI owners associations or the Company Venture; (iv) other indebtedness in a maximum aggregate principal amount not exceeding $10 million; provided, however, that the Company will consult with Parent before incurring any such other indebtedness of $500,000 or more if the maximum aggregate principal amount of all indebtedness incurred pursuant to this clause (iv) is greater than $5 million but less than $10 million; (v) indebtedness incurred in connection with the issuance of (A) construction completion bonds incurred in connection with the budgets set forth in Section 4.1(f)(ii) of the Company Letter, utility bonds to secure the payment of future utility obligations of the Company or its Subsidiaries, submission bid bonds, advertising bonds, registration bonds or similar bonds in the ordinary course of business or (B) bonds used to provide alternative assurance, in lieu of escrow, for customer deposits, down payments and mortgage payments on VOI sales; and (vi) the borrowing of up to $20 million in working capital under the Line of Credit Agreement dated as of November 1, 1997 among the Company, Vistana Development, Ltd., and Dresdner Bank AG New York and Grand Cayman Branches;
(g) alter (through merger, liquidation, reorganization, restructuring or in any other fashion) the corporate structure or ownership of the Company or any non wholly-owned Subsidiary, or the Company Venture;
(h) except as required under Section 5.8 or as described in Section 4.1(h) of their respective Affiliates the Company Letter, enter into or successors thereto adopt any, or amend any existing, severance plan, agreement or arrangement or enter into or amend any Company Plan or employment or consulting agreement, other than as required by law or by an existing contractual obligation of the Company disclosed in Section 4.1(h) of the Company Letter (in which case, any action taken in accordance therewith is expressly permitted), except that the Company or its Subsidiaries, or the Company Venture, may enter into (a) employment agreements if such agreements (i) are no longer than two years in duration and (ii) provide for an annual base salary of less than $125,000, and (b) consulting agreements in the ordinary course of business consistent with past practice that are terminable on no more than 90 days' notice without penalty;
(i) except (1) as permitted under Section 4.1(h), or (2) to the extent required by written employment agreements existing on the date of this Agreement, increase the compensation payable or to become payable to its terms couldofficers or such other employees, after except for increases in the Effective Time, limit ordinary course of business consistent with past practice in salaries or restrict Parent wages of such officers or other employees of the Company or any of their respective Affiliates its Subsidiaries, or any successor thereto, from engaging or competing in any line of business or in any geographic areathe Company Venture;
(gj) grant or award any stock options, restricted stock, performance shares, stock appreciation rights or other equity-based incentive awards, except as set forth in Section 4.1(j) of the Company Letter;
(k) take any action, other than reasonable actions in the ordinary course of business consistent with past practice, waive, release or relinquish any material rightwith respect to accounting policies (other than actions required to be taken by changes in generally accepted accounting principles);
(hl) make or agree to make any capital expenditure in excess of $1,000,000 individually or $8,000,000 in the aggregate, other than (i) capital expenditures committed prior to the date of this Agreement, (ii) capital expenditures included in the budgets for the Development Projects set forth in Section 4.1(f)(ii) of the Company Letter, (iii) capital expenditures included in the capital expenditure budget of the Company and its Subsidiaries for 1999 previously disclosed to Parent, (iv) legal, financing, registration, collection and repossession fees and expenses and prepaid costs (including prepaid direct marketing costs) incurred in the ordinary course of business and capitalized to the balance sheet in accordance with GAAP, applied on a basis consistent with past practice, (v) purchases of VOI inventory and liens on VOI units in the ordinary course of business consistent with past practice, modify and (vi) capital expenditures made on behalf of VOI owner associations which will be paid or change in any material respect any existing material license, lease, contract, or other agreementreimbursed by the VOI owner associations;
(im) enter into any agreements involving aggregate expenditures or receipts of more than $100,000 individually or $500,000 except as otherwise disclosed in the aggregate (or, with respect to (iSection 4.1(m) any Cost of Services Contract, $1,000,000 and (ii) switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any agreements in the ordinary course of business consistent with past practice, including but not limited to installation fees and customer premise equipment, in each case, associated with new customers and in the ordinary course of business consistent with past practice;
(j) create, incur or assume, or execute any new guarantee of, any Indebtedness in excess of $100,000 in the aggregate (other than indebtedness for borrowed money owing to W or any of its Affiliates) or prepay any Indebtedness;
(k) other than pursuant to arrangements existing on the date hereof, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for obligations of any other person (other than any Subsidiary) in an amount in excess of $100,000;
(l) make any loans or advances other than (i) loans or advances to wholly-owned Subsidiaries made in the ordinary course of business consistent with past practice and (ii) routine salary, travel and expense advances to Company Employees in the ordinary course of business consistent with past practice;
(i) engage in any transaction, or enter into any contract, agreement or arrangement (other than this Agreement, the Transactions and the incurrence of indebtedness for borrowed money owing to W or any of its Affiliates and transactions pursuant to any such contract, agreement or arrangement entered into on or prior to the date hereof), with any Affiliate, (ii) engage in any transaction, or enter into any contract, agreement or arrangement, with any portfolio company of W that is not on arm's length terms and in the ordinary course of business, or (iii) amend, waive or relinquish any rights relating to any such transaction, contract, agreement or arrangement referred to in clause (i) or (ii) that will remain outstanding after the Closing in accordance with Section 8.05;
(n) authorize any new capital expenditures which, individually, are greater than $100,000 or, in the aggregate, would cause total capital expenditures for year ending December 31, 2003 to exceed $500,000 (or, with respect to switch software upgrades for purposes of compliance with the Communication Assistance for Law Enforcement Act, $1,000,000), other than any capital expenditures in the ordinary course of business consistent with past practice;
(o) split, combine or reclassify any shares of its capital stock; declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, other than (i) cash dividends and distributions by a wholly-owned Subsidiary to the Company or to a Subsidiary all of the capital stock which is owned directly or indirectly by the Company or (ii) the issuance of Company Common Stock upon exercise of stock options or warrants, or conversion of Preferred Stock, outstanding on the date hereof in accordance with their present terms; or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its securities or any securities of the Subsidiaries;
(p) (i) increase the compensation or fringe benefits of any Company Employee (except for (x) increases in salary or wages in the ordinary course of business consistent with past practice, (y) the payment of accrued or earned but unpaid bonuses and (z) stay bonuses or similar retention payments in an amount not to exceed $10,000 with respect to any individual payment and $100,000 in the aggregate with respect to all such payments), (ii) grant any severance or termination pay to any Company Employee, (iii) loan or advance any money or other property to any Company Employee (other than routine salary, travel and expense advances to Company Employees in the ordinary course of business and consistent with past practice), (iv) establish, adopt, enter into, amend or terminate any Company Plan, collective bargaining or labor agreement 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 of this Agreement (other than as may be required by the terms of an existing Company Plan or collective bargaining agreement, or as may be required by applicable law or in order to qualify under Sections 401 and 501 of the Code), or (v) grant any equity or equity-based awards, other than in the cases of clauses (i) through (v) pursuant to commitments of the Company or any Subsidiary existing on the date hereof required by contracts set forth in Section 4.08(k) or Section 4.12 of the Company Disclosure Schedule;
(q) Letter, pay, discharge or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction satisfaction, in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reflected or reserved against in in, or contemplated by, the most recent consolidated financial statements (or the notes thereto) of the Company referred to in Section 4.07 or liabilities incurred included in the ordinary course of business;
(r) make Company SEC Documents or change any tax election or settle or compromise any income tax liability;
(s) other than incurred in the ordinary course of business consistent with past practice, change any method of accounting, accounting policy or accounting practice, except for any such change required by reason of a concurrent change in GAAP as concurred with by the Company's independent auditors;
(tn) fail to maintain insurance coverage at presently existing levelssettle or compromise any material liability under any federal, state, local or foreign tax law or under any Environmental Law;
(uo) make except for contracts, arrangements or understandings relating to the lease or purchase of equipment, materials, supplies or services, (i) included in the budgets for the Development Projects set forth in Section 4.1(f)(ii) of the Company Letter, (ii) set forth in the capital expenditure budget of the Company and its Subsidiaries for 1999 previously disclosed to Parent, or (iii) which will be paid or reimbursed by the VOI owner associations, enter into any repayments contract, arrangement or understanding requiring the lease or purchase of principal to W equipment, materials, supplies or its Affiliates services in respect excess of any Indebtedness owed to W $100,000 individually or its Affiliates $1,000,000 in the aggregate, over a period greater than 12 months, which is not cancellable without penalty on 90 or any payment of interest accrued in respect of such Indebtedness;fewer days' notice; or
(vp) agree authorize, recommend, propose or commit announce an intention to do any of the foregoing; or
(w) knowingly take or agree or commit to take any action that would make any representation and warranty of W or the Company hereunder inaccurate in any material respect at, or as enter into any contract, agreement, commitment or arrangement to do any of any time prior to, the Closing, except for any representations or warranties that are made as of a specified dateforegoing.
Appears in 1 contract
Samples: Merger Agreement (Vistana Inc)
