Organizational and Capital Structure The organizational structure and capital structure of Holdings and its Subsidiaries shall be as set forth on Schedule 4.1.
Company Capital Structure (a) Immediately prior to the transactions contemplated hereunder, the authorized capital stock of the Company consists of (i) 10,000,000 shares of Company Common Stock, $0.00001 par value per share (“Common Stock”) of which 8,000,000 are issued and outstanding (which such amounts include the shares issuable upon exercise of the Company Options on the Closing Date). The Company Common Stock, including all shares subject to the Company’s right of repurchase, is held of record beneficially by the Persons with the addresses and in the amounts and represented by the certificates set forth on Schedule 3.4(a). All outstanding shares of Company Common Stock (i) have been duly authorized and validly issued and are fully paid, non-assessable and not subject to preemptive rights or similar rights created by statute, the Company’s Articles of Incorporation, the By-Laws of the Company or any agreement or document to which the Company is a party or by which it is bound, and (ii) have been offered, sold, issued and delivered by the Company in all material respects in compliance with all applicable Laws, including federal and state corporate and securities Laws. There are no declared or accrued but unpaid dividends with respect to any shares of Company Common Stock. Except as set forth in this Section 3.4, as of the date of this Agreement no shares of Company Common Stock, other equity securities, partnership interests or similar ownership interests or other voting securities of the Company or any securities exchangeable or convertible into or exercisable for such capital stock, other equity securities, partnership interests or similar ownership interests or other voting securities of the Company, were issued, reserved for issuance or outstanding. Except as set forth on Schedule 3.4(a), there are no bonds, debentures, notes or other indebtedness of the Company having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which Shareholders of the Company may vote. Except as set forth on Schedule 3.4, the Company has never repurchased, redeemed or otherwise acquired or caused the repurchase, redemption or acquisition of any shares of Company Common Stock or other securities of the Company, and there are no amounts owed or which may be owed to any Person by the Company as a result of any repurchase, redemption or acquisition of any shares of Company Common Stock or other securities of the Company. There is no claim or basis for such a claim to any portion of the Merger Consideration except as set forth in Schedule 1.2 by any current or former Shareholder, option holder or warrant holder of the Company, or any other Person.
(i) Except for the Company’s 2006 Stock Plan (the “Company Option Plan”), as amended, the Company has never adopted, sponsored or maintained any stock option plan or any other plan or agreement providing for equity compensation to any Person. The Company Option Plan has been duly authorized, approved and adopted by the Company’s Board of Directors and the Shareholders and is in full force and effect. The Company has reserved for issuance to Employees of and consultants to the Company 2,000,000 shares of Company Common Stock under the Company Option Plan, of which options to purchase 430,000 shares of Company Common Stock have been granted and are outstanding (each, a “Company Option”). Except as set forth on Schedule 3.4, all outstanding Company Options have been offered, issued and delivered by the Company in all material respects in compliance with all applicable Laws, including federal and state corporate and securities Laws, and in compliance with the terms and conditions of the Company Option Plan. Schedule 3.4(a)(i) sets forth for each outstanding Company Option, the name of the holder of such option, the domicile address of such holder, an indication of whether such holder is an Employee of the Company, the date of grant or issuance of such option, the number of shares of Company Common Stock subject to such option, the exercise price of such option, the vesting schedule for such option, including the extent vested on the date of this Agreement and whether and to what extent the exercisability of such option will be accelerated and become exercisable as a result of the transactions contemplated by this Agreement, and whether such Company Option is or is not an incentive stock option as defined in Section 422 of the Code.
(ii) The Company has outstanding warrants for the purchase of shares of Company Common Stock (each, a “Company Warrant”). All Company Warrants have been offered, issued and delivered by the Company in all material respects in compliance with all applicable Laws, including federal and state corporate and securities Laws. Schedule 3.4(a)(ii) sets forth for each outstanding Company Warrant, the name of the holder of such Company Warrant, the domicile address of such holder, an indication of whether such holder is an Employee of the Company, the date of grant or issuance of such Company Warrant, the number of shares of Company Common Stock subject to such Company Warrant, the exercise price of such Company Warrant, the vesting schedule for such Company Warrant, including the extent vested to the date of this Agreement and whether and to what extent the exercisability of such Company Warrant will be accelerated and become exercisable as a result of the transactions contemplated by this Agreement.
(iii) Except for the Company Options and Company Warrants, there are no Company Stock Rights or agreements of any character, written or oral, obligating the Company to issue, deliver, sell, repurchase or redeem, or cause to be issued, delivered, sold, repurchased or redeemed, any Company Common Stock or any capital stock or equity or other ownership interest of the Company or obligating the Company to grant, extend, accelerate the vesting of, change the price of, otherwise amend or enter into any such Company Stock Right. There are no outstanding or authorized stock appreciation, phantom stock, profit participation, or other similar rights with respect to the Company.
(b) Except for the agreements or understandings set forth on Schedule 3.4(b) (collectively, the “Shareholder Voting Agreements”), there are no (i) voting trusts, proxies, or other agreements or understandings with respect to the voting stock of the Company to which the Company is a party, by which the Company is bound, or of which the Company has knowledge, or (ii) agreements or understandings to which the Company is a party, by which the Company is bound, or of which the Company has knowledge relating to the registration, sale or transfer (including agreements relating to rights of first refusal, “co-sale” rights or “drag-along” rights) of any Company Common Stock. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby and thereby does not implicate any rights or obligations under the Shareholder Voting Agreements that have not been complied with or waived. The Shareholders of Company Common Stock and Company Stock Rights have been or will be properly given, or shall have properly waived, any required notice prior to the transactions contemplated herein.
Capital Structure The authorized capital stock of the Company consists of (i) 100,000,000 shares of Company Common Stock (of which, as of July 21, 2000, 32,757,155 shares were issued and outstanding) and (ii) 10,000,000 shares of preferred stock, par value $0.01 per share (of which no shares are issued and outstanding). No other capital stock of the Company is authorized or issued and outstanding. SECTION 3.01(c) OF THE COMPANY DISCLOSURE SCHEDULE sets forth (u) all plans or agreements (the "STOCK PLANS") pursuant to which the Company or any of its Subsidiaries has granted or committed to grant any option or right to acquire stock or any other award payable in or based upon Company Common Stock; (v) the number of shares of Company Common Stock reserved for issuance under the Stock Plans, as of July 21, 2000, (w) the number of shares of Company Common Stock subject to outstanding stock options, as of July 21, 2000 (the "STOCK OPTIONS"); (x) the grant dates and exercise prices of each such Stock Option and the names of the holders thereof; (y) the number of shares of Company Common Stock subject to restrictions based on satisfaction of performance criteria (the "RESTRICTED STOCK") and the names of the holders thereof; and (z) all other rights to purchase or receive Company Common Stock under the Stock Plans. Except as set forth in SECTION 3.01(c) OF THE COMPANY DISCLOSURE SCHEDULE, there are no outstanding options, warrants or other securities or subscription, preemptive or other rights convertible into or exchangeable or exercisable for any shares of capital stock or other equity or voting interests of the Company and there are no "phantom stock" rights, stock appreciation rights or other similar rights with respect to the Company. No shares of Company Common Stock are owned by any Subsidiary of the Company. During the period from July 21, 2000 to the date of this Agreement, (A) there have been no issuances by the Company of shares of capital stock of, or other equity or voting interests in, the Company, other than issuances of shares of Company Common Stock pursuant to the exercise of Stock Options outstanding on such date as required by their terms as in effect on such date and (B) there have been no issuances by the Company of options, warrants or other rights to acquire shares of capital stock or other equity or voting interests from the Company. All outstanding shares of Company Common Stock are, and all shares of Company Common Stock that may be issued pursuant to the Option Plans or rights or agreements set forth in SECTION 3.01(c) OF THE COMPANY DISCLOSURE SCHEDULE will be when issued in accordance with the terms thereof, duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive rights. There are no bonds, debentures, notes or other indebtedness of the Company or any of its Subsidiaries, and no securities or other instruments or obligations of the Company or any of its Subsidiaries, the value of which is in any way based upon or derived from any capital or voting stock of the Company or any such Subsidiary or having the right to vote (or convertible into, or exchangeable or exercisable for, securities having the right to vote) on any matters on which the Shareholders or the shareholders of any such subsidiary may vote. Except as set forth above or in SECTION 3.01(c) OF THE COMPANY DISCLOSURE SCHEDULE or as specifically permitted under Section 4.01(a), there are no Contracts of any kind to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound, obligating the Company or any of its Subsidiaries to issue, deliver, grant or sell, or cause to be issued, delivered, granted or sold, additional shares of capital stock of, or other equity or voting interests in, or options, warrants or other securities or subscription, preemptive or other rights convertible into, or exchangeable or exercisable for, shares of capital stock of, or other equity or voting interests in, the Company or any of its Subsidiaries, or any "phantom stock" right, stock appreciation right or other similar right with respect to the Company or any of its Subsidiaries, or obligating the Company or any of its Subsidiaries to enter into any such Contract. There are no Contracts obligating the Company or any of its Subsidiaries to (x) repurchase, redeem or otherwise acquire any shares of capital stock of, or other equity or voting interests in, the Company or any of its Subsidiaries or (y) vote or dispose of any shares of the capital stock of, or other equity or voting interests in, any of its Subsidiaries. To the knowledge of the Company, as of the date of this Agreement, there are no irrevocable proxies and no voting agreements with respect to any shares of the capital stock or other voting securities of the Company or any of its Subsidiaries. Except as set forth in SECTION 3.01(c) OF THE COMPANY DISCLOSURE SCHEDULE, each outstanding share of capital stock of each Subsidiary of the Company is duly authorized, validly issued, fully paid and nonassessable, and each such share is owned by the Company or another Subsidiary of the Company free and clear of all liens, rights of first refusal or other contractual transfer restrictions, agreements and limitations on the Company's or any of its Subsidiaries' voting rights of any nature whatsoever.
Organizational Structure The ISO will be governed by a ten (10) person unaffiliated Board of Directors, as per Article 5 herein. The day-to-day operation of the ISO will be managed by a President, who will serve as an ex-officio member of the ISO Board, in accordance with Article 5 herein. There shall be a Management Committee as per Article 7 herein, which shall report to the ISO Board, and shall be comprised of all Parties to the Agreement. There shall be at least two additional standing committees, the Operating Committee, as provided for in Article 8, and the Business Issues Committee, as provided for in Article 9, both of which shall report to the Management Committee. A Dispute Resolution Process will be established and administered by the ISO Board in accordance with Article 10.
Financial Statements; Financial Condition; Undisclosed Liabilities; Projections; etc (a) The audited annual and unaudited interim financial statements (as to the Borrower and as to its Subsidiaries on a combined basis) delivered to the Banks pursuant to Section 5.14(i) or Sections 8.01(b) and (c), as applicable, present fairly in all material respects the financial condition of the relevant Persons at the dates of said statements and the results for the periods covered thereby. All such financial statements have been prepared in accordance with GAAP consistently applied and the financial statements as of and for the fiscal years have been audited by and accompanied by the opinion of Ernst & Young LLP, independent public accountants, or such other independent certified public accountants of recognized national standing reasonably acceptable to the Agents.
(b) Since September 30, 2001, after giving effect to the Transactions, nothing has occurred that has had or could reasonably be expected to have a Material Adverse Effect.
(c) On and as of the Effective Date, after giving effect to the Indebtedness (including the Loans) being incurred and Liens created by the Borrower in connection therewith (assuming the full utilization of all Commitments on the Effective Date), (a) the sum of the assets, at a going business value (i.e., the amount that may be realized within a reasonable time, considered to be six months to one year, either through collection or sale at the regular market value, conceiving the latter as the amount that would be obtained for such assets within such period by a capable and diligent businessman from an interested buyer who is willing to purchase under ordinary selling conditions), of the Borrower will exceed its debts; (b) the Borrower has not incurred and does not intend to incur, and does not believe that it will incur, debts beyond its ability to pay such debts as such debts mature; and (c) the Borrower will have sufficient capital with which to conduct its business. For purposes of this Section 7.05(c), "debt" means any liability on a claim, and "claim" means (i) right to payment, whether or not such a right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured or (ii) right to an equitable remedy for breach of performance if such breach gives rise to a payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured or unsecured; provided that to the extent any such "claim" is not fixed, liquidated and contingent, the amount thereof shall equal the Borrower's good faith estimate of the maximum amount thereof.
Changes in Capital Structure of Issuers Such Grantor will not (i) permit or suffer any issuer of Capital Stock constituting Pledged Collateral owned by it to dissolve, merge, liquidate, retire any of its Capital Stock or other Instruments or Securities evidencing ownership, reduce its capital, sell or encumber all or substantially all of its assets (except for Permitted Liens and sales of assets permitted pursuant to Section 4.1(d)) or merge or consolidate with any other entity, or (ii) vote any such Pledged Collateral in favor of any of the foregoing.
Investments and Acquisitions Neither the Company nor any of its Subsidiaries shall have outstanding, acquire, commit itself to acquire or hold any Investment (including any Investment consisting of the acquisition of any business) (or become contractually committed to do so) except for the following:
(a) Investments of the Company and its Subsidiaries in Wholly Owned Subsidiaries (a) which are domestic Subsidiaries as of the date of this Agreement or (b) which become domestic Wholly Owned Subsidiaries after the Closing Date and become Guarantors to the extent required by Section 10.09; provided, however, that the aggregate book value of all assets (other than intercompany obligations) owned by Immaterial Subsidiaries shall not exceed $10,000,000.
(b) Intercompany loans and advances from any Subsidiary to the Company or any Guarantor that, in the case of loans or advances from Foreign Subsidiaries, are subordinated to the Obligations in accordance with the Foreign Subsidiary Subordination Agreement.
(c) Investments in Cash Equivalents.
(d) Guarantees permitted by Section 6.06.
(e) So long as immediately before and after giving effect thereto no Default exists, and so long as the Company (if the Company is party thereto) or a Guarantor (if the Company is not party thereto) is the surviving entity, the Company and its Subsidiaries may acquire another entity in the same line of business as the Company as described in Section 6.02(a) if:
(i) at all times when the Consolidated Leverage Ratio is greater than 2.50 for the most recent period of four consecutive fiscal quarters (calculated on a pro forma basis giving effect to the proposed acquisition as if such acquisition had been consummated at the beginning of such period) for which financial reports have been (or are required to have been) furnished to the Lenders in accordance with Sections 6.04(a) or 6.04(b), the purchase price for all such acquisitions permitted pursuant to this clause (e)(i) does not exceed, except with the consent of the Required Lenders, $100,000,000 in cash (excluding consideration consisting of Capital Stock, the proceeds of the issuance of Capital Stock or Subordinated Indebtedness) in the aggregate over the term of the Agreement;
(ii) at all times when the Consolidated Leverage Ratio is less than or equal to 2.50 for the most recent period of four consecutive fiscal quarters (calculated on a pro forma basis giving effect to the proposed acquisition as if such acquisition had been consummated at the beginning of such period) for which financial reports have been (or are required to have been) furnished to the Lenders in accordance with Sections 6.04(a) or 6.04(b), the Company and its Subsidiaries may make unlimited acquisitions; provided, however that in the event a transaction permitted pursuant to this clause (e)(ii) would, on a pro forma basis after giving effect thereto, cause the Consolidated Leverage Ratio to exceed 2.50, the portion of the cash purchase price with respect to such transaction attributed to causing the Consolidated Leverage Ratio to be greater than 2.50 shall only be permitted to be paid to the extent the Company has sufficient availability in the $100,000,000 basket set forth in clause (e)(i) to take into account such excess amount; provided, further, that with respect to any acquisition permitted pursuant to this Section 6.08(e)(ii), (i) the acquisition must be approved by the target entity’s board of directors, (ii) the Company must be in compliance with the Computation Covenants immediately after giving effect to such acquisition, (iii) the acquired entity must not have any environmental liabilities which, after giving effect to such acquisition, would reasonably be expected to result in a Material Adverse Effect and (iv) any Subsidiary acquired under this Section 6.08(e) (other than (a) a Foreign Subsidiary or (b) any Immaterial Subsidiary if the aggregate book value of the assets (other than intercompany obligations) of all Immaterial Subsidiaries acquired under this Section 6.08(e) since the Closing Date does not exceed $10,000,000) shall guarantee the Obligations, as contemplated by Section 10.09.
(f) So long as immediately before and after giving effect thereto no Default exists, the Company and its Subsidiaries may make (i) Investments in Unrestricted Affiliates engaged in businesses contemplated by Section 6.02(a) and (ii) Investments consisting of contributions of Property to Unrestricted Affiliates, in an aggregate amount for all such Investments permitted pursuant to this clause (f) (calculated at net book value at the time of such Investment), when taken together with the aggregate amount of all Dispositions permitted pursuant to Section 6.10(e), not to exceed $100,000,000.
(g) Loans or advances to employees of the Company in an amount not to exceed (i) $1,000,000 in the aggregate outstanding at any time for the purchase of capital stock of the Company and (ii) $5,000,000 in the aggregate outstanding at any time for all other purposes.
(h) So long as immediately before and after giving effect thereto no Default exists, Investments of the Company and its Subsidiaries in foreign Wholly Owned Subsidiaries; provided, however, that other than with respect to Investments outstanding as of the Closing Date as described on Schedule 6.08(h), (i) such Investments shall not involve the transfer of substantial noncash assets from the Company and its domestic Subsidiaries to its Foreign Subsidiaries other than up to $35,000,000 in book value of foreign patents and foreign trademarks; and (ii) net cash Investments of the Company and its domestic Subsidiaries in Foreign Subsidiaries made pursuant to this Section 6.08(h) at any one time outstanding shall not exceed $125,000,000 in the aggregate.
(i) So long as immediately before and after giving effect thereto no Default exists, and provided that the Company complies with Section 10.09, the Company may create a Wholly Owned Subsidiary that constitutes a holding company for the Company’s European Subsidiaries.
Changes in Capital Structure If all or any portion of the Option shall be exercised subsequent to any share dividend, split-up, recapitalization, merger, consolidation, combination or exchange of shares, separation, reorganization, or liquidation occurring after the date hereof, as a result of which shares of any class shall be issued in respect of outstanding Shares or Shares shall be changed into the same or a different number of shares of the same or another class or classes, the person or persons exercising the Option shall receive, for the aggregate price paid upon such exercise, the aggregate number and class of shares which, if the Shares (as authorized at the date hereof) had been purchased at the date hereof for the same aggregate price (on the basis of the price per share set forth in paragraph 2 hereof) and had not been disposed of, such person or persons would be holding at the time of such exercise as a result of such purchase and all such share dividends, split-ups, recapitalizations, mergers, consolidations, combinations or exchanges of shares, separations, reorganizations, or liquidations; provided, however, that no fractional shares shall be issued upon any such exercise, and the aggregate price paid shall be appropriately reduced on account of any fractional share not issued. In no event shall any adjustments be made to the Option as a result of the issuance or redemption of securities of the Corporation for cash or other consideration, or upon the exercise of any conversion rights of any securities of the Corporation.
ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE Subject to any required action by the stockholders of the Company and the requirements of Sections 409A and 424 of the Code to the extent applicable, in the event of any change in the Stock effected without receipt of consideration by the Company, whether through merger, consolidation, reorganization, reincorporation, recapitalization, reclassification, stock dividend, stock split, reverse stock split, split-up, split-off, spin-off, combination of shares, exchange of shares, or similar change in the capital structure of the Company, or in the event of payment of a dividend or distribution to the stockholders of the Company in a form other than Stock (excepting normal cash dividends) that has a material effect on the Fair Market Value of shares of Stock, appropriate and proportionate adjustments shall be made in the number, Exercise Price and kind of shares subject to the Option, in order to prevent dilution or enlargement of the Participant’s rights under the Option. For purposes of the foregoing, conversion of any convertible securities of the Company shall not be treated as “effected without receipt of consideration by the Company.” Any fractional share resulting from an adjustment pursuant to this Section shall be rounded down to the nearest whole number and the Exercise Price shall be rounded up to the nearest whole cent. In no event may the Exercise Price be decreased to an amount less than the par value, if any, of the stock subject to the Option. Such adjustments shall be determined by the Committee, and its determination shall be final, binding and conclusive.
Financial Statements; Undisclosed Liabilities (i) Schedule 4(j) sets forth (A) the unaudited consolidated balance sheet of the Company as of September 30, 1999 (the "Company Balance Sheet"), and the unaudited consolidated statement of income of the Company for the 9 month period ended September 30, 1999, and (B) the audited consolidated balance sheets of the Company as of December 31, 1997 and 1998, and the audited consolidated statements of income of the Company for the period August 25 to December 31, 1997 and for the year ended December 31, 1998, together with the notes to such financial statements (the financial statements described in clauses (A) and (B) above, together with any notes to such financial statements, are collectively referred to herein as the "Company Financial Statements"). The Company Financial Statements are in all material respects in accordance with the books and records of the Company and its consolidated Subsidiaries and have been prepared in conformity with generally accepted accounting principles consistently applied throughout the periods indicated (except in each case as described in the notes thereto) and on that basis fairly present in all material respects (subject, in the case of the unaudited statements referred to in (A) above, to normal, recurring year-end adjustments) the financial condition and results of operations of the Company and its consolidated Subsidiaries as of the respective dates thereof and for the respective periods indicated.
(ii) The Company and its consolidated Subsidiaries do not have any liabilities or obligations of any nature (whether accrued, absolute, contingent, threatened or otherwise), except (A) as disclosed, reflected or reserved against in the Company Balance Sheet, (B) items set forth in Schedule 4(j), (C) liabilities and obligations incurred in the ordinary course of business consistent with past practice since the date of the Company Balance Sheet that would not, individually or in the aggregate, result in a Company Material Adverse Effect and (D) Taxes (as defined in Section 4(A)(l)) with respect to the period after the date of the Company Balance Sheet. Without limiting the generality of the foregoing, the Company has no contingent obligations in excess of $60,000 with respect to any assets purchased by the Company pursuant to the agreement between the Company and DeKalb Office Environments with respect to purchases of Steelcase furniture.
(iii) Except as set forth in Schedule 4(j), the amount of all accounts receivable, including unbilled invoices which are reflected as accounts receivable on the Company Financial Statements, due, or recorded in the Company Balance Sheet as being due to the Company and its Subsidiaries (less the amount of any provision or reserve therefor made in the Company Balance Sheet), are fully collectible in the normal course of business.