Interim Operations of the Business. (a) From the Execution Date until the earlier of the Closing and the termination of this Agreement in accordance with its terms, except (i) as set forth in Section 4.1(a) of the Seller Disclosure Letter, (ii) as otherwise required by this Agreement (including the Pre-Closing Reorganization), (iii) as required by an Order or applicable Law, or (iv) as approved by Buyers in writing (such approval not to be unreasonably withheld or delayed solely with respect to any actions that would have been required to be disclosed in Sections 4.1(a)(B)(i)-(vii) or (xi)-(xxiv) of the Seller Disclosure Letter), Sellers shall, and shall cause the Companies and their Affiliates (as applicable) to use commercially reasonable efforts to (A) (w) conduct the Business in the ordinary course of business consistent with past practice, (x) maintain and preserve the Business’s relationships and good will with customers, suppliers and others having business dealings with the Business, (y) not renew any Commingled Contracts that may be identified with any effect that would be inconsistent with Sellers’ obligations with respect thereto under Section 4.20(a), (z) maintain and operate the Owned Real Property and Transferred Assets in the ordinary course in all material respects, and (B) not, and shall cause each of its Affiliates not to, in each case with respect to the Business: (i) adopt any change in either Company’s Organizational Documents or create any Subsidiary of a Company; (ii) declare, set aside, make or pay a non-cash dividend on, or make any other non-cash distribution in respect of the equity interests of either Company (provided that any payment or prepayment (Vorabgewinnabführung / Vorabverlustausgleich) under and in accordance with the DPLTA shall be permitted, whether effected in cash or as non-cash payment); (iii) merge or consolidate either Company with any other Person, or restructure, reorganize, dissolve or completely or partially liquidate either Company or adopt any plan of restructuring, reorganization, dissolution, liquidation or plan of merger, amalgamation or consolidation or otherwise enter into any agreements or arrangements imposing material changes or restrictions on either Company’s or the Business’s assets, operations or businesses; (iv) (A) permit either Company or the Business to acquire any business or Person, by merger or consolidation, purchase of substantially all assets, properties, rights of, or equity or debt interests or by any other manner, in each case, in any transaction or series of related transactions or (B) enter into any new joint venture, strategic alliance, partnership or similar venture; (v) other than sales of Inventory pursuant to Contracts with customers to which a Company is a party that are in effect as of the Execution Date, transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, subject to a Lien (other than a Permitted Lien), abandon or allow to lapse or expire or otherwise dispose of any material assets, properties, licenses, operations, rights, product lines, businesses or interests therein used or held for use by the Business or the Companies in connection with the Business, except for (A) sales or other dispositions of obsolete assets in the ordinary course of business consistent with past practice, (B) sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $3,000,000 in the aggregate, or (C) non-exclusive licenses or similar rights granted with respect to Intellectual Property Rights in the ordinary course of business consistent with past practice, provided that, for the avoidance of doubt, the foregoing clause (v) shall not apply to the abandonment or allowing to lapse or expire any Intellectual Property Rights other than Intellectual Property Rights that are material to the Business, including the Transferred Intellectual Property; (vi) issue, sell, pledge, dispose of, grant, transfer, encumber, subject to a Lien or authorize the issuance, sale, pledge, disposition, grant, transfer, granting of a security interest in, or encumbrance of, any equity interests of either Company, or securities convertible or exchangeable into or exercisable for any shares of such equity interests, or any options, warrants or other rights of any kind to acquire any such equity interests; (vii) recapitalize, reclassify, distribute, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of the equity interests of either Company; (viii) permit either Company or the Business to make any loans, advances, guarantees or capital contributions to or investments in any Person (other than to satisfy the requirements in Section 4.22); (ix) permit (A) either Company (other than to satisfy the requirements in Section 4.22) to incur, assume or become liable for any Indebtedness of the type referenced in clauses (a) through (e) of the definition thereof or guarantee any such Indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of such Company, except for prepayable indebtedness for borrowed money incurred in the ordinary course of business consistent with past practice for working capital purposes, not to exceed $3,000,000 in the aggregate; or (B) any of its assets or properties to become subject to a Lien (other than a Permitted Lien); (x) forgive, compromise, satisfy, pay, discharge, settle or cancel any third-party indebtedness owed to the Business or the Companies, or waive any claim of rights of value in favor of the Business or the Companies, in each case with a value in excess of $500,000 in a single instance or $1,000,000 in the aggregate; (xi) (A) except as set forth in the capital budget set forth in Section 4.1(a)(xi) of the Seller Disclosure Letter (the “Capex Budget”), make or authorize any capital expenditures in excess of $2,500,000 individually, or $5,000,000 in the aggregate, other than any capital expenditure (1) made or to be made from insurance proceeds for the repair and/or prevention of damage to any property of the Business, (2) necessary to repair and/or prevent damage to any property of the Business in the event of an emergency situation or force majeure event, or (3) necessary to address emergency human health and safety issues; or (B) fail to make, in calendar year 2023, payments in respect of at least 100% of the capital expenditures contemplated to have been made in the relevant time periods for 2023 as contemplated by the associated project plans underlying the Capex Budget for the months prior to the Closing or, if applicable, fail to make capital expenditure payments in calendar year 2024 substantially in accordance with a capital expenditures budget for 2024 prepared by Sellers in reasonable consultation with Xxxxxx on a basis consistent with the Business’s long range plan delivered to Buyers prior to the date hereof, which budget shall be delivered to Buyers no later than December 31, 2023; (xii) enter into any Contract that would have been a Material Contract (including any Lease or Insurance Policy) had it been entered into prior to the Execution Date other than in the ordinary course of business with respect to any customer or supplier (provided that, subject to applicable Law, Sellers shall reasonably consult with Buyers and consider in good faith the views of Buyer on the terms thereof prior to execution); (xiii) amend, modify, grant a waiver of any right or obligation under, terminate or fail to renew any Material Contract (for the avoidance of doubt, the renewal of a Material Contract upon the expiration of such contract on terms that are substantially consistent with, or more favorable than, the Material Contract it is replacing shall be permitted hereunder); (xiv) enter into any Commingled Contracts; (xv) enter into any new line of business or abandon or discontinue any existing line of business; (xvi) make any changes with respect to its accounting policies or procedures, except as (y) may be initiated by Seller Parent with respect to Seller Parent’s business generally (provided that such change is not implemented to, or intended to, specifically affect the accounting policies or procedures of the Business) or (z) required by changes in Law or GAAP; (xvii) make any changes in its policies or general practices with respect to cash management, management of Inventory, the payment of accounts payable or accrued expenses or the issuance of invoices or the collection of the accounts receivable or other receivables, including the acceleration or deferral of the payment or collection thereof or failure to properly categorize Inventory, in each case, other than (i) in the ordinary course of business, (ii) pursuant to Contracts to which a Company is a party that are in effect as of the Execution Date or (iii) to satisfy the requirements in Section 4.22; (xviii) settle any Action other than any settlement in the ordinary course of business for an amount not in excess of $3,000,000 in the aggregate that does not involve non-monetary relief; (xix) (A) file any amended material Tax Return, (B) make or change any material Tax election, (C) agree to any material adjustment of any Tax attribute, (D) surrender any material right or claim to a refund of Taxes, (E) consent to any extension or waiver of the statute of limitations period applicable to any material Taxes, (F) enter into any closing agreement with respect to material Taxes, (G) settle or compromise any material Tax liability, or (H) jeopardize the validity of the CIT/TT Fiscal Unity, it being understood that any filing of a Tax Return or other measures required for the termination and settlement of the domination and profit and loss transfer agreement entered into between BOG and BOG Seller 1 (“DPLTA”) (including effecting (pre)payments in cash or as non-cash payments, as the case may be) shall be as set forth in Section 4.22(c) and in Section 4.22(c) of the Seller Disclosure Letter and, thereby, the fiscal unity for corporate income Tax and trade Tax purposes between BOG as controlled company and the BOG Seller 1 as controlling company (the “CIT/TT Fiscal Unity”) as of the Closing shall be permitted; (xx) other than (i) as may be required by any Benefit Plan, or (ii) in connection with any action that applies uniformly to Business Employees and all other similarly situated employees of Sellers and their Affiliates, (A) promise, announce or grant to any Business Employee or Service Provider any material increase in compensation or benefits, including, without limitation, severance or termination pay, other than such increases in compensation or benefits (but not severance or termination pay) as are in the ordinary course of business, as to timing and amount, in connection with Sellers’ annual review of compensation, (B) as applicable to the Business Employees, adopt, establish, enter into, terminate, waive or materially amend any Benefit Plan (or any plan, policy, agreement, arrangement, program or contract that would be a Benefit Plan if in effect on the date hereof) that will be a Transferred Benefit Plan as of the Closing Date, (C) take any action to accelerate the timing of payment, vesting or funding of any compensation or benefits, payable or to become payable to any Business Employee, Former Business Employees or Service Provider, (D) transfer any Business Employee out of the Business or transfer any employee of Sellers that is not a Business Employee as of the Execution Date into either of the Companies, (E) hire or engage any Person to become a Business Employee or Service Provider, other than hiring an individual, in the ordinary course of business consistent with past practice, or to fill a position, in each case, with an annual base salary of less than $150,000, or (F) terminate (other than for cause, as determined by the Sellers and the Companies in the ordinary course of business consistent with past practice) any Key Employee; (xxi) (i) amend, modify, negotiate, adopt, enter into, extend, renew or terminate any Labor Agreement, (ii) recognize or certify any labor organization, works council, labor union or group of employees of any of the Companies as the bargaining representative for any employees of the Companies or (iii) engage in or announce any employee layoffs, furloughs, reductions in force, reductions in compensation, hours or benefits, work schedule changes or similar actions that could implicate the WARN Act; (xxii) permit any Material Permits to lapse or be cancelled (other than to the extent the applicable Material Permit becomes obsolete, redundant or no longer required by or advisable under applicable Law); (xxiii) except as may be initiated by Seller Parent with respect to Seller Parent’s groupwide insurance policies (provided that such lapse or cancellation is not initiated to, or intended to, specifically affect the coverage available under such insurance policies relating to the Business), permit any insurance policy relating to the Business, the Companies (or their respective assets, properties, rights or liabilities), the Transferred Assets or the Assumed Liabilities to lapse or be cancelled; or (xxiv) agree, authorize or commit to do any of the foregoing with respect to the conduct of the Business. (b) Notwithstanding anything to the contrary in Section 4.1 (but without limiting Section 4.1(a)(B) above), none of Sellers, the Companies and any of their respective Affiliates shall be prevented from undertaking, or be required to obtain Buyers’ consent with respect to, the following actions and inactions: (i) any action or inaction in connection with any action or inaction required by Law or by any quarantine, “shelter in place,” “stay at home,” workforce reduction, social distancing, shutdown, closure, sequester, or any other similar Law or Order by any Governmental Entity in connection with or in response to COVID-19 (“COVID-19 Measures”) or required or requested by any Governmental Entity in connection with or in response to COVID-19 (provided that, to the extent reasonably practicable and permitted by applicable Law, Sellers shall promptly notify Buyers of any such action or inaction if it would otherwise violate Section 4.1(a)); and (ii) any action or inaction required or reasonably necessary to (x) protect the health and safety of the Business’ employees, customers or suppliers and other individuals having business dealings with the Business in connection with COVID-19 or (y) respond to service disruptions caused by COVID-19 or any COVID-19 Measures, in each case to the extent reasonably consistent with actions that have been taken or not taken by Sellers or its Affiliates in connection therewith prior to the date hereof (provided that, to the extent reasonably practicable and permitted by applicable Law, Sellers shall promptly notify Buyers of any such action or inaction if it would otherwise violate Section 4.1(a)). (c) Without limiting Section 4.1(a)(B)(xi) hereof, from the Execution Date until the earlier of the Closing and the termination of this Agreement in accordance with its terms, Sellers shall, and shall cause their Affiliates to use commercially reasonably efforts to take the actions set forth on Section 4.1(c)
Appears in 1 contract
Samples: Equity Purchase Agreement (Baxter International Inc)
Interim Operations of the Business. (a) From the Execution Date date hereof until the Closing or the earlier of the Closing and the termination of this Agreement in accordance with its termsAgreement, except (i) as set forth in Section 4.1(a) of the Seller Disclosure Letter, (ii) as otherwise required by this Agreement (including the Pre-Closing Reorganization), (iii) as required by an Order or applicable Lawon Schedule 5.9, or (iv) as approved by Buyers Parent has previously consented thereto in writing (such approval consent not to be unreasonably withheld withheld, conditioned or delayed solely with respect to any actions that would have been required to be disclosed in Sections 4.1(a)(B)(i)-(viidelayed):
(a) or (xi)-(xxiv) of the Seller Disclosure Letter), Sellers Company shall, and the Company and Representative shall cause the other Acquired Companies and their Affiliates (as applicable) to use commercially reasonable efforts to (A) (w) conduct the Business in the ordinary course of business consistent with past practice, (x) maintain and preserve the Business’s relationships and good will with customers, suppliers and others having business dealings with the Business, (y) not renew any Commingled Contracts that may be identified with any effect that would be inconsistent with Sellers’ obligations with respect thereto under Section 4.20(a), (z) maintain and operate the Owned Real Property and Transferred Assets in the ordinary course in all material respects, and (B) not, and shall cause each of its Affiliates not to, in each case with respect to the Business:
: (i) adopt any change in either Company’s Organizational Documents or create any Subsidiary of a Company;
(ii) declare, set aside, make or pay a non-cash dividend on, or make any other non-cash distribution in respect of the equity interests of either Company (provided that any payment or prepayment (Vorabgewinnabführung / Vorabverlustausgleich) under conduct their respective business and in accordance with the DPLTA shall be permitted, whether effected in cash or as non-cash payment);
(iii) merge or consolidate either Company with any other Person, or restructure, reorganize, dissolve or completely or partially liquidate either Company or adopt any plan of restructuring, reorganization, dissolution, liquidation or plan of merger, amalgamation or consolidation or otherwise enter into any agreements or arrangements imposing material changes or restrictions on either Company’s or the Business’s assets, operations or businesses;
(iv) (A) permit either Company or the Business to acquire any business or Person, by merger or consolidation, purchase of substantially all assets, properties, rights of, or equity or debt interests or by any other manner, in each case, in any transaction or series of related transactions or (B) enter into any new joint venture, strategic alliance, partnership or similar venture;
(v) other than sales of Inventory pursuant to Contracts with customers to which a Company is a party that are in effect as of the Execution Date, transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, subject to a Lien (other than a Permitted Lien), abandon or allow to lapse or expire or otherwise dispose of any material assets, properties, licenses, operations, rights, product lines, businesses or interests therein used or held for use by the Business or the Companies in connection with the Business, except for (A) sales or other dispositions of obsolete assets in the ordinary course of business consistent with past practice, (B) sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $3,000,000 in the aggregate, or (C) non-exclusive licenses or similar rights granted with respect to Intellectual Property Rights in the ordinary course of business consistent with past practice, provided that, for the avoidance of doubt, the foregoing clause (v) shall not apply to the abandonment or allowing to lapse or expire any Intellectual Property Rights other than Intellectual Property Rights that are material to the Business, including the Transferred Intellectual Property;
(vi) issue, sell, pledge, dispose of, grant, transfer, encumber, subject to a Lien or authorize the issuance, sale, pledge, disposition, grant, transfer, granting of a security interest in, or encumbrance of, any equity interests of either Company, or securities convertible or exchangeable into or exercisable for any shares of such equity interests, or any options, warrants or other rights of any kind to acquire any such equity interests;
(vii) recapitalize, reclassify, distribute, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of the equity interests of either Company;
(viii) permit either Company or the Business to make any loans, advances, guarantees or capital contributions to or investments in any Person (other than to satisfy the requirements in Section 4.22);
(ix) permit (A) either Company (other than to satisfy the requirements in Section 4.22) to incur, assume or become liable for any Indebtedness of the type referenced in clauses (a) through (e) of the definition thereof or guarantee any such Indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of such Company, except for prepayable indebtedness for borrowed money incurred in the ordinary course of business consistent with past practice for working capital purposes, not to exceed $3,000,000 in the aggregate; or (B) any of its assets or properties to become subject to a Lien (other than a Permitted Lien);
(x) forgive, compromise, satisfy, pay, discharge, settle or cancel any third-party indebtedness owed to the Business or the Companies, or waive any claim of rights of value in favor of the Business or the Companies, in each case with a value in excess of $500,000 in a single instance or $1,000,000 in the aggregate;
(xi) (A) except as set forth in the capital budget set forth in Section 4.1(a)(xi) of the Seller Disclosure Letter (the “Capex Budget”), make or authorize any capital expenditures in excess of $2,500,000 individually, or $5,000,000 in the aggregate, other than any capital expenditure (1) made or to be made from insurance proceeds for the repair and/or prevention of damage to any property of the Business, (2) necessary to repair and/or prevent damage to any property of the Business in the event of an emergency situation or force majeure event, or (3) necessary to address emergency human health and safety issues; or (B) fail to make, in calendar year 2023, payments in respect of at least 100% of the capital expenditures contemplated to have been made in the relevant time periods for 2023 as contemplated by the associated project plans underlying the Capex Budget for the months prior to the Closing or, if applicable, fail to make capital expenditure payments in calendar year 2024 substantially in accordance with a capital expenditures budget for 2024 prepared by Sellers in reasonable consultation with Xxxxxx on a basis consistent with the Business’s long range plan delivered to Buyers prior to the date hereof, which budget shall be delivered to Buyers no later than December 31, 2023;
(xii) enter into any Contract that would have been a Material Contract (including any Lease or Insurance Policy) had it been entered into prior to the Execution Date other than in the ordinary course of business with respect to any customer or supplier (provided that, subject to applicable Law, Sellers shall reasonably consult with Buyers and consider in good faith the views of Buyer on the terms thereof prior to execution);
(xiii) amend, modify, grant a waiver of any right or obligation under, terminate or fail to renew any Material Contract (for the avoidance of doubt, the renewal of a Material Contract upon the expiration of such contract on terms that are substantially consistent with, or more favorable than, the Material Contract it is replacing shall be permitted hereunder);
(xiv) enter into any Commingled Contracts;
(xv) enter into any new line of business or abandon or discontinue any existing line of business;
(xvi) make any changes with respect to its accounting policies or procedures, except as (y) may be initiated by Seller Parent with respect to Seller Parent’s business generally (provided that such change is not implemented to, or intended to, specifically affect the accounting policies or procedures of the Business) or (z) required by changes in Law or GAAP;
(xvii) make any changes in its policies or general practices with respect to cash management, management of Inventory, the payment of accounts payable or accrued expenses or the issuance of invoices or the collection of the accounts receivable or other receivables, including the acceleration or deferral of the payment or collection thereof or failure to properly categorize Inventory, in each case, other than (i) in the ordinary course of business, (ii) pursuant to Contracts to which a Company is a party that are in effect preserve intact and maintain, as of the Execution Date or applicable, their respective existence, business organization, properties and assets, (iii) preserve and maintain all of their respective permits and licenses, (iv) pay their respective debts, Taxes and other obligations when due (taking into account extensions), (v) continue in full force and effect without modification all insurance policies, except as required by applicable Law and (vi) use commercially reasonable efforts to satisfy keep available the requirements in Section 4.22;services of its employees and to preserve the goodwill and present relationships (contractual or otherwise) with all customers, suppliers, employees, licensors and other Persons doing business with the applicable Acquired Company, and
(xviiib) settle without limiting the foregoing clause (a), the Company shall not, and the Company and the Representative shall not permit any Action Acquired Company to (i) take any action, or agree, authorize or commit (whether in writing or otherwise) to take any action that, if taken prior to the date hereof, would be required to be disclosed on Schedule 3.13 (other than any settlement in the ordinary course of business for an amount not in excess of $3,000,000 in the aggregate that does not involve non-monetary relief;
(xix) (A) file any amended material such action taken with respect to a UK Tax ReturnContest), (Bii) make or change promise any material Tax electionincrease in compensation of any Acquired Company’s directors, managers, officers or employees, (Ciii) agree to hire any material adjustment of any Tax attributeindividual with salary or overall compensation greater than $50,000, (D) surrender any material right or claim to a refund of Taxes, (E) consent to any extension or waiver of the statute of limitations period applicable to any material Taxes, (Fiv) enter into any closing agreement Contract with respect to material Taxes, (G) settle a customer or compromise any material Tax liability, or (H) jeopardize the validity of the CIT/TT Fiscal Unity, it being understood that any filing of a Tax Return or other measures required for the termination and settlement of the domination and profit and loss transfer agreement entered into between BOG and BOG Seller 1 (“DPLTA”) (including effecting (pre)payments in cash or as non-cash payments, as the case may be) shall be as set forth in Section 4.22(c) and in Section 4.22(c) of the Seller Disclosure Letter and, thereby, the fiscal unity for corporate income Tax and trade Tax purposes between BOG as controlled company and the BOG Seller 1 as controlling company (the “CIT/TT Fiscal Unity”) as of the Closing shall be permitted;
(xx) other supplier involving more than (i) as may be required by any Benefit Plan, or (ii) in connection with any action that applies uniformly to Business Employees and all other similarly situated employees of Sellers and their Affiliates, (A) promise, announce or grant to any Business Employee or Service Provider any material increase in compensation or benefits, including, without limitation, severance or termination pay$100,000, other than such increases in compensation or benefits (but not severance or termination pay) as are purchase and sale orders made in the ordinary course of business, as to timing and amount(v) enter into any lease, in connection with Sellers’ annual review of compensationsublease, license or other occupancy agreement, (Bvi) as applicable to the Business Employees, adopt, establish, enter into, terminate, waive or materially amend into any Benefit Plan (Contract with another Acquired Company or any plan, policy, agreement, arrangement, program of their Affiliates; (vii) make or contract that would be a Benefit Plan if commit to make any capital expenditures in effect on the date hereof) that will be a Transferred Benefit Plan as excess of the Closing Date, (C) take any action to accelerate the timing of payment, vesting or funding of any compensation or benefits, payable or to become payable to any Business Employee, Former Business Employees or Service Provider, (D) transfer any Business Employee out of the Business or transfer any employee of Sellers that is not a Business Employee as of the Execution Date into either of the Companies, (E) hire or engage any Person to become a Business Employee or Service Provider, other than hiring an individual, in the ordinary course of business consistent with past practice, or to fill a position, in each case, with an annual base salary of less than $150,000, or (F) terminate (other than for cause, as determined by the Sellers and the Companies in the ordinary course of business consistent with past practice) any Key Employee;
(xxi) (i) amend, modify, negotiate, adopt, enter into, extend, renew or terminate any Labor Agreement, (ii) recognize or certify any labor organization, works council, labor union or group of employees of any of the Companies as the bargaining representative for any employees of the Companies or (iii) engage in or announce any employee layoffs, furloughs, reductions in force, reductions in compensation, hours or benefits, work schedule changes or similar actions that could implicate the WARN Act;
(xxii) permit any Material Permits to lapse or be cancelled (other than to the extent the applicable Material Permit becomes obsolete, redundant or no longer required by or advisable under applicable Law);
(xxiii) except as may be initiated by Seller Parent with respect to Seller Parent’s groupwide insurance policies (provided that such lapse or cancellation is not initiated to, or intended to, specifically affect the coverage available under such insurance policies relating to the Business), permit any insurance policy relating to the Business, the Companies (or their respective assets, properties, rights or liabilities), the Transferred Assets or the Assumed Liabilities to lapse or be cancelled50,000 per Acquired Company; or (xxivviii) agree, authorize or commit to do make any NPI & EPI Development expenditures in excess of the foregoing with respect to the conduct currently planned amount of the Business$1,463,000.
(b) Notwithstanding anything to the contrary in Section 4.1 (but without limiting Section 4.1(a)(B) above), none of Sellers, the Companies and any of their respective Affiliates shall be prevented from undertaking, or be required to obtain Buyers’ consent with respect to, the following actions and inactions:
(i) any action or inaction in connection with any action or inaction required by Law or by any quarantine, “shelter in place,” “stay at home,” workforce reduction, social distancing, shutdown, closure, sequester, or any other similar Law or Order by any Governmental Entity in connection with or in response to COVID-19 (“COVID-19 Measures”) or required or requested by any Governmental Entity in connection with or in response to COVID-19 (provided that, to the extent reasonably practicable and permitted by applicable Law, Sellers shall promptly notify Buyers of any such action or inaction if it would otherwise violate Section 4.1(a)); and
(ii) any action or inaction required or reasonably necessary to (x) protect the health and safety of the Business’ employees, customers or suppliers and other individuals having business dealings with the Business in connection with COVID-19 or (y) respond to service disruptions caused by COVID-19 or any COVID-19 Measures, in each case to the extent reasonably consistent with actions that have been taken or not taken by Sellers or its Affiliates in connection therewith prior to the date hereof (provided that, to the extent reasonably practicable and permitted by applicable Law, Sellers shall promptly notify Buyers of any such action or inaction if it would otherwise violate Section 4.1(a)).
(c) Without limiting Section 4.1(a)(B)(xi) hereof, from the Execution Date until the earlier of the Closing and the termination of this Agreement in accordance with its terms, Sellers shall, and shall cause their Affiliates to use commercially reasonably efforts to take the actions set forth on Section 4.1(c)
Appears in 1 contract
Interim Operations of the Business. (a) From the Execution Date until the earlier of the Closing and the termination of this Agreement in accordance with its terms, except (i) as set forth in Section 4.1(a) of the Seller Disclosure Letter, (ii) as otherwise required by this Agreement (including the Pre-Closing Reorganization), (iii) as required by an Order or applicable Law, Law or (iv) as approved by Buyers Buyer in writing (such approval not to be unreasonably withheld or delayed solely with respect to any actions that would have been required to be disclosed in Sections 4.1(a)(B)(i)-(vii) or (xi)-(xxiv) of the Seller Disclosure Letterdelayed), Sellers Seller shall, and shall cause the Companies Vantive Group Entities and its and their Affiliates respective Subsidiaries (as applicable) to use commercially reasonable efforts to (A) (wA)(x) conduct the Business in the ordinary course of business consistent with past practicein all material respects, (xy) maintain and preserve the Business’s relationships and good will with customers, suppliers and others having business dealings with the Business, (y) not renew any Commingled Contracts that may be identified with any effect that would be inconsistent with Sellers’ obligations with respect thereto under Section 4.20(a), and (z) maintain and operate the Owned Real Property and Transferred Assets in the ordinary course in all material respects, and (B) not, and shall cause each of the Vantive Group Entities and its Affiliates and their respective Subsidiaries not to, in each case with respect to the Business:
(i) adopt any change in either Companyany Vantive Group Entity’s Organizational Documents or or, other than in connection with the Pre-Closing Reorganization, create any Subsidiary of a CompanyVantive Group Entity;
(ii) declare, set aside, make or pay a non-cash dividend on, or make any other non-cash distribution in respect of the equity interests of either Company (provided that any payment or prepayment (Vorabgewinnabführung / Vorabverlustausgleich) under and in accordance with the DPLTA shall be permitted, whether effected in cash or as non-cash payment);
(iii) merge or consolidate either Company any Vantive Group Entity or the Business with any other Person, or restructure, reorganize, dissolve or completely or partially liquidate either Company any Vantive Group Entity or adopt any plan of restructuring, reorganization, dissolution, liquidation liquidation, or plan of merger, amalgamation or consolidation or otherwise enter into any agreements or arrangements imposing material changes or restrictions on either Companyany Vantive Group Entity’s or the Business’s assets, operations or businesses;
(iv) (A) permit either Company any Vantive Group Entity or the Business to acquire any business or Person, by merger or consolidation, purchase of substantially all assets, properties, rights of, of or equity or debt interests or by any other manner, in each case, in any transaction or series of related transactions or (B) enter into any new joint venture, strategic alliance, partnership or similar venture;
(viv) other than sales of Inventory pursuant to Contracts with customers to which a Company is a party that are in effect as of the Execution Date, transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, subject to a Lien (other than a Permitted Lien), abandon or allow to lapse or expire or otherwise dispose of any material assets, properties, licenses, operations, rights, product lines, businesses or interests therein Transferred Asset used or held for use by the Business or the Companies Seller or any of its Subsidiaries in connection with the Business, except for (A) sales or other dispositions of obsolete assets in the ordinary course of business consistent with past practicebusiness, (B) sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $3,000,000 10,000,000 in the aggregate, or (C) non-exclusive licenses or similar rights granted with respect to Intellectual Property Rights in the ordinary course of business consistent with past practice, or (D) sales of Inventory in the ordinary course of business; provided that, for the avoidance of doubt, the foregoing clause (viv) shall not apply to restrict the abandonment or allowing to lapse or expire of any Intellectual Property Rights other than Intellectual Property Rights that are material to Registered IP at the Business, including the Transferred Intellectual Propertyend of their maximum statutory term;
(viv) issue, sell, pledge, dispose of, grant, transfer, encumber, subject to a Lien (other than a Permitted Lien) or authorize the issuance, sale, pledge, disposition, grant, transfer, granting of a security interest in, or encumbrance of, any equity interests of either Companyany Vantive Group Entity, or securities convertible or exchangeable into or into, exercisable for any shares of such equity interests, or any options, warrants or other rights of any kind to acquire any such equity interests;
(viivi) recapitalize, reclassify, distribute, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of the equity interests of either Companyany Vantive Group Entity;
(viiivii) permit either Company any Vantive Group Entity or the Business to make any loans, advances, guarantees or capital contributions to or investments in any Person (other than to satisfy in excess of $5,000,000 in the requirements in Section 4.22)aggregate;
(ixviii) permit (A) either Company (other than to satisfy any Vantive Group Entity or the requirements in Section 4.22) Business to incur, assume or become liable for any Indebtedness of the type referenced in clauses (a) through (e) of the definition thereof indebtedness for borrowed money or guarantee any such Indebtedness indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of such Companyany Vantive Group Entity, except for prepayable indebtedness for borrowed money incurred in the ordinary course of business consistent with past practice for working capital purposes, not to exceed $3,000,000 in the aggregate; or (B) any of its assets or properties to become subject to a Lien (other than a Permitted Lien);
(x) forgive, compromise, satisfy, pay, discharge, settle or cancel any third-party indebtedness owed to the Business or the Companies, or waive any claim of rights of value in favor of the Business or the Companies, in each case with a value in excess of $500,000 in a single instance or $1,000,000 in the aggregate;
(xi) (Aix) except as set forth in the capital budget set forth in Section 4.1(a)(xi4.1(a)(ix) of the Seller Disclosure Letter (the “Capex Budget”)Letter, make or authorize any capital expenditures in excess of $2,500,000 individually, or $5,000,000 10,000,000 in the aggregate, other than any capital expenditure expenditure, (1A) made or to be made from insurance proceeds for the repair and/or prevention of damage to any property of the Business, (2B) necessary to repair and/or prevent damage to any property of the Business in the event of an emergency situation or force majeure eventsituation, or (3C) necessary to address emergency human health and safety issues; issues or (BD) fail necessary to makeaddress the consequences of any civil disturbance, in calendar year 2023hurricane, payments in respect of at least 100% of the capital expenditures contemplated to have been made in the relevant time periods for 2023 as contemplated by the associated project plans underlying the Capex Budget for the months prior to the Closing orsuperstorm, if applicableflood, fail to make capital expenditure payments in calendar year 2024 substantially in accordance with a capital expenditures budget for 2024 prepared by Sellers in reasonable consultation with Xxxxxx on a basis consistent with the Business’s long range plan delivered to Buyers prior to the date hereoftornado, which budget shall be delivered to Buyers no later than December 31earthquake or other natural disaster, 2023or any other force majeure event;
(xiix) enter into any Contract that would have been a Material Contract (including any Lease or Insurance Policy) had it been entered into prior to the Execution Date Date, other than in the ordinary course of business with respect to any customer or supplier (provided that, subject to applicable Law, Sellers shall reasonably consult with Buyers and consider in good faith the views of Buyer on the terms thereof prior to execution)supplier;
(xiiixi) amend, modifyamend or modify in any material respect, grant a material waiver of any right or obligation under, or terminate or fail to renew any Material Contract (other than in the ordinary course of business) (for the avoidance of doubt, the renewal of a Material Contract upon the expiration of such contract on terms that are substantially consistent with, or more favorable than, the Material Contract it is replacing shall be permitted hereunder);
(xiv) enter into any Commingled Contracts;
(xvxii) enter into any new line of business or abandon or discontinue any existing line of business;
(xvixiii) make any changes with respect to its accounting policies or procedures, except as (yx) may be initiated by Seller Parent with respect to Seller ParentSeller’s business generally (provided that such change is not implemented to, or intended to, specifically affect the accounting policies or procedures of the Business) or (zy) required by changes in Law or GAAP;
(xiv) subject to Section 4.2 and Section 4.3, settle any Action, other than any settlement in the ordinary course of business for an amount not in excess of $5,000,000 in the aggregate that does not involve non-monetary relief;
(A) file any amended material Tax Return, (B) make, change or revoke any material Tax election, (C) agree to any material adjustment of any Tax attribute; (D) surrender any material right or claim to a refund of Taxes, (E) enter into any closing agreement with respect to material Taxes, (F) settle or compromise any material Tax liability, (G) change any annual accounting period, (H) change any material method of accounting for Tax purposes, (I) surrender any right to obtain a material Tax refund, (J) other than any filings or submissions to update factual developments with respect to the rulings described in Section 4.1(a)(xv)(J) of the Seller Disclosure Letter, apply for or request any material Tax ruling from any Tax authority or (K) other than with respect to automatic or automatically granted extensions or customary filing extensions applied in the ordinary course of business, waive or extend the statutory limitation period applicable to any material Tax claim or material Tax assessment, in each case, other than with respect to any Tax matters that would not reasonably be expected to increase, in a non-de minimis manner, the Tax liability of the Vantive Group Entities or the Deferred Vantive Local Businesses for any Post-Closing Tax Period, it being agreed and understood that this clause (xv) contains the sole and exclusive restrictions in this Section 4.1 relating to Taxes and Tax matters;
(xvi) other than as required by any existing Benefit Plan in effect as of the Execution Date or in connection with any action that applies uniformly to Business Employees and all other similarly situated employees of Seller and its Affiliates, (A) promise, announce or grant to any Business Employee (1) at the level of Senior Director and above any increase in compensation or benefits, including severance or termination pay, other than increases in compensation or benefits (but not severance or termination pay or equity-based compensation) in the ordinary course of business and in connection with Seller’s annual review of compensation, or (2) equity-based compensation, (B) as applicable to the Business Employees, adopt, establish, enter into, terminate, waive or materially amend any Benefit Plan that will be a Transferred Benefit Plan (or any plan, policy, agreement, arrangement, program or contract that would be a Transferred Benefit Plan if in effect on the Execution Date) as of the Closing Date, (C) take any action to accelerate the timing of payment, vesting or funding of any compensation or benefits, payable or to become payable to any Business Employee or Service Provider, (D) transfer any Business Employee or Deferred Vantive Local Business Employee out of the Business or transfer any employee of Seller that is not a Business Employee as of the Execution Date into a Vantive Group Entity, other than as expressly contemplated pursuant to Section 4.8, (E) hire or engage any Person to become a Business Employee or Deferred Vantive Local Business Employee, other than hiring an individual, in the ordinary course of business consistent with past practice, or to fill a position, in each case, below the level of Senior Director or (F) terminate (other than for cause, as determined by Seller and the Companies in the ordinary course of business consistent with past practice) any Business Employee or Deferred Vantive Local Business Employee at the level of Senior Director and above;
(xvii) (i) amend, modify, negotiate, adopt, enter into, extend, renew or terminate any Labor Agreement, (ii) recognize or certify any labor organization, works council, labor union or group of employees as the bargaining representative for any Business Employees, Deferred Vantive Local Business or employees of the Vantive Group Entities or (iii) engage in or announce any employee layoffs, furloughs, reductions in force, reductions in compensation, hours or benefits, work schedule changes or similar actions affecting any site of employment or one or more facilities or operating units within any site of employment or facility where any Business Employees, Deferred Vantive Local Business Employees or Former Business Employees are or were located that would reasonably be expected to implicate the WARN Act;
(xviii) permit any Material Permits to lapse or be cancelled (other than to the extent the applicable Material Permit becomes obsolete, redundant or no longer required by or advisable under applicable Law);
(xix) declare, set aside, make or pay a non-cash dividend on, or make any other non-cash distribution in respect of the equity interests of any Vantive Group Entity;
(xx) forgive, compromise, satisfy, pay, discharge, settle or cancel any third-party indebtedness owed to the Business or the Vantive Group Entities, or waive any claim of rights of value in favor of the Business or the Vantive Group Entities, in each case with a value in excess of $5,000,000 in the aggregate;
(xxi) make any changes in its policies or general practices with respect to cash management, management of Inventory, the payment of accounts payable or accrued expenses or the issuance of invoices or the collection of the accounts receivable or other receivables, including the acceleration or deferral of the payment or collection thereof or failure to properly categorize Inventory, in each case, other than (i) in the ordinary course of business, or (ii) pursuant to Contracts to which a Company Vantive Group Entity is a party that are in effect as of the Execution Date or (iii) to satisfy the requirements in Section 4.22;
(xviii) settle any Action other than any settlement in the ordinary course of business for an amount not in excess of $3,000,000 in the aggregate that does not involve non-monetary relief;
(xix) (A) file any amended material Tax Return, (B) make or change any material Tax election, (C) agree to any material adjustment of any Tax attribute, (D) surrender any material right or claim to a refund of Taxes, (E) consent to any extension or waiver of the statute of limitations period applicable to any material Taxes, (F) enter into any closing agreement with respect to material Taxes, (G) settle or compromise any material Tax liability, or (H) jeopardize the validity of the CIT/TT Fiscal Unity, it being understood that any filing of a Tax Return or other measures required for the termination and settlement of the domination and profit and loss transfer agreement entered into between BOG and BOG Seller 1 (“DPLTA”) (including effecting (pre)payments in cash or as non-cash payments, as the case may be) shall be as set forth in Section 4.22(c) and in Section 4.22(c) of the Seller Disclosure Letter and, thereby, the fiscal unity for corporate income Tax and trade Tax purposes between BOG as controlled company and the BOG Seller 1 as controlling company (the “CIT/TT Fiscal Unity”) as of the Closing shall be permitted;
(xx) other than (i) as may be required by any Benefit Plan, or (ii) in connection with any action that applies uniformly to Business Employees and all other similarly situated employees of Sellers and their Affiliates, (A) promise, announce or grant to any Business Employee or Service Provider any material increase in compensation or benefits, including, without limitation, severance or termination pay, other than such increases in compensation or benefits (but not severance or termination pay) as are in the ordinary course of business, as to timing and amount, in connection with Sellers’ annual review of compensation, (B) as applicable to the Business Employees, adopt, establish, enter into, terminate, waive or materially amend any Benefit Plan (or any plan, policy, agreement, arrangement, program or contract that would be a Benefit Plan if in effect on the date hereof) that will be a Transferred Benefit Plan as of the Closing Date, (C) take any action to accelerate the timing of payment, vesting or funding of any compensation or benefits, payable or to become payable to any Business Employee, Former Business Employees or Service Provider, (D) transfer any Business Employee out of the Business or transfer any employee of Sellers that is not a Business Employee as of the Execution Date into either of the Companies, (E) hire or engage any Person to become a Business Employee or Service Provider, other than hiring an individual, in the ordinary course of business consistent with past practice, or to fill a position, in each case, with an annual base salary of less than $150,000, or (F) terminate (other than for cause, as determined by the Sellers and the Companies in the ordinary course of business consistent with past practice) any Key Employee;
(xxi) (i) amend, modify, negotiate, adopt, enter into, extend, renew or terminate any Labor Agreement, (ii) recognize or certify any labor organization, works council, labor union or group of employees of any of the Companies as the bargaining representative for any employees of the Companies or (iii) engage in or announce any employee layoffs, furloughs, reductions in force, reductions in compensation, hours or benefits, work schedule changes or similar actions that could implicate the WARN Act;; or
(xxii) permit any Material Permits to lapse or be cancelled (other than to the extent the applicable Material Permit becomes obsolete, redundant or no longer required by or advisable under applicable Law);
(xxiii) except as may be initiated by Seller Parent with respect to Seller Parent’s groupwide insurance policies (provided that such lapse or cancellation is not initiated to, or intended to, specifically affect the coverage available under such insurance policies relating to the Business), permit any insurance policy relating to the Business, the Companies (or their respective assets, properties, rights or liabilities), the Transferred Assets or the Assumed Liabilities to lapse or be cancelled; or (xxiv) agree, authorize or commit to do any of the foregoing with respect to the conduct of the Business.
(b) Notwithstanding anything to the contrary in Section 4.1 4.1(a) (but without limiting Section 4.1(a)(B) above)), none of SellersSeller (solely with respect to the Business), the Companies and Vantive Group Entities or any other Subsidiaries of their respective Affiliates Seller (solely with respect to the Business) shall be prevented from undertaking, or be required to obtain Buyers’ Buyer’s consent with respect to, the following actions and inactions:
(i) any action or inaction in connection with any action or inaction required by Law or by any quarantine, “shelter in place,” “stay at home,” workforce reduction, social distancing, distancing shutdown, closure, sequester, safety or any other similar Law or Order by any Governmental Entity in connection with or in response to COVID-19 any Contagion Event (the “COVID-19 Pandemic Measures”) or required or requested by any Governmental Entity in connection with or in response to COVID-19 any Contagion Event (provided provided, that, (A) to the extent reasonably practicable and permitted by applicable Law, Sellers Seller shall promptly notify Buyers Buyer of any such action or inaction if it would otherwise violate Section 4.1(a)) and (B) Seller, the Vantive Group Entities, and any other Subsidiaries of Seller shall use commercially reasonable efforts to mitigate the effects of such action or inaction); andor
(ii) any action or inaction required or reasonably necessary to (x) protect the health and safety of the Business’ ’s employees, customers or suppliers and other individuals having business dealings with the Business in connection with COVID-19 a Contagion Event or (y) respond to service disruptions caused by COVID-19 a Contagion Event or any COVID-19 Pandemic Measures, in each case to the extent reasonably consistent with actions that have been taken or not taken by Sellers Seller or its Affiliates Subsidiaries in connection therewith prior to the date hereof Execution Date (provided provided, that, (A) to the extent reasonably practicable and permitted by applicable Law, Sellers Seller shall promptly notify Buyers Buyer of any such action or inaction if it would otherwise violate Section 4.1(a)) and (B) Seller, the Vantive Group Entities, and any other Subsidiaries of Seller shall use commercially reasonable efforts to mitigate the effects of such action or inaction).
(c) Without limiting Section 4.1(a)(B)(xi) hereofNotwithstanding anything to the contrary contained herein, from the Execution Date until the earlier of the Closing and the termination of this Agreement in accordance with its terms, Sellers shallSeller shall use reasonable best efforts to ensure that, in respect of each of the jurisdictions specified in Section A.13 of the Seller Disclosure Letter, Cash at least equal to the Minimum Cash Target for such jurisdiction is delivered to Buyer as of the Effective Time and, in furtherance of the foregoing, shall not, and shall cause each of their Affiliates Subsidiaries not to, declare, set aside, make or pay a cash dividend on, or make any other cash distribution in respect of the equity interests of any Vantive Group Entity, to use commercially the extent that such action would result or would reasonably efforts be expected to take result in the actions set forth on Minimum Cash Target for such jurisdiction not being met as of the Effective Time. Notwithstanding anything to the contrary contained herein, to the extent Closing Cash in any applicable jurisdiction in Section 4.1(cA.13 of the Seller Disclosure Letter is reasonably expected to exceed the Minimum Cash Target for such jurisdiction, then Seller shall have the right, subject to compliance with all applicable Laws, to withdraw all or a portion of such excess cash of any Vantive Group Entity prior to the Closing, including by causing the Companies or any other Vantive Group Entity to make any such payment in the form of a dividend, distribution, contribution or otherwise to Seller or any of its Subsidiaries (the “Cash Sweep”).
(d) Nothing contained in this Agreement is intended to give Buyer, directly or indirectly, the right to control or direct Seller’s or any Vantive Group Entity’s operations prior to the Closing Date. Prior to the Closing Date, Seller shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over the operations of the Vantive Group Entities.
Appears in 1 contract
Samples: Equity Purchase Agreement (Baxter International Inc)
Interim Operations of the Business. (a) From During the period from the Execution Date until the earlier of the Closing and the valid termination of this Agreement in accordance with its terms, except (i) as set forth in Section 4.1(a) 5.1 of the Seller Disclosure Letter, (ii) as required or otherwise required contemplated by this Agreement (including the Pre-Closing Reorganization)Agreement, (iii) as required by an Order or applicable Law, or (iv) as approved by Buyers Buyer in writing (such approval not to be unreasonably withheld withheld, conditioned or delayed solely with respect to any actions that would have been required to be disclosed in Sections 4.1(a)(B)(i)-(vii) or (xi)-(xxiv) of the Seller Disclosure Letterdelayed), Sellers shall, and shall cause the Companies and their Affiliates (as applicable) to use commercially reasonable efforts to Seller (A) shall (w1) conduct the Business in the ordinary course of business Ordinary Course in all material respects and (2) use its commercially reasonable efforts to the extent consistent with past practiceclause (1), (x) maintain and to preserve the Business’s relationships Business intact and good will maintain existing relations with Governmental Entities, customers, suppliers suppliers, distributors, creditors, lessors and others having business dealings with the Businessemployees, (y) not renew any Commingled Contracts that may be identified with any effect that would be inconsistent with Sellers’ obligations with respect thereto under Section 4.20(a), (z) maintain and operate the Owned Real Property and Transferred Assets in the ordinary course each case in all material respects, and (B) shall not, and shall cause each of its Affiliates not to, in each case with respect case, solely to the Businessextent in respect of the Business and the Transferred Assets:
(i) adopt acquire any change in either Company’s Organizational Documents corporation, partnership, limited liability company, other business organization or create division thereof if any Subsidiary of a Companythe Liabilities of such organization would constitute Assumed Liabilities;
(ii) declare, set aside, make create or pay a non-cash dividend on, or make incur any Encumbrance other non-cash distribution in respect of the equity interests of either Company (provided that any payment or prepayment (Vorabgewinnabführung / Vorabverlustausgleich) under and in accordance with the DPLTA shall be permitted, whether effected in cash or as non-cash payment)than Permitted Encumbrances;
(iii) merge create, incur, assume or consolidate either Company with any other Personguarantee, or restructureallow the Business to create, reorganizeincur, dissolve assume or completely guarantee, any Indebtedness for Borrowed Money (other than any such Indebtedness for Borrowed Money that will be discharged on or partially liquidate either Company or adopt any plan of restructuring, reorganization, dissolution, liquidation or plan of merger, amalgamation or consolidation or otherwise enter into any agreements or arrangements imposing material changes or restrictions on either Company’s or prior to the Business’s assets, operations or businesses;Closing) that would be an Assumed Liability;
(iv) (A) permit either Company or fail to make any material capital expenditures necessary to operate the Business to acquire any business or Person, by merger or consolidation, purchase in the Ordinary Course of substantially all assets, properties, rights of, or equity or debt interests or by any other mannerBusiness (including, in each case, in any transaction or series the timing of related transactions or (B) enter into any new joint venture, strategic alliance, partnership or similar venturesuch payments);
(v) other than sales in the Ordinary Course of Inventory pursuant Business, enter into any Contract that would have been a Material Contract had it been entered into prior to Contracts with customers to which a Company is a party that are in effect as of the Execution Date;
(vi) terminate or amend, modify, supplement or waive in a manner that is materially adverse to the Business (or assign, convey, encumber or otherwise transfer, in whole or in part, rights or interest pursuant to or in) any Material Contract, other than expirations of any such Material Contract in the Ordinary Course of Business in accordance with the terms of such Material Contract, or licenses or other grants of rights under Intellectual Property Rights in the Ordinary Course of Business (it being understood that all Material Contracts related to Indebtedness for Borrowed Money shall be governed by Section 5.1(a)(iii);
(vii) except in the Ordinary Course of Business, transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, subject to a Lien (other than a Permitted Lien), abandon or allow to lapse or expire or otherwise dispose of any material assets, properties, licenses, operations, rights, product lines, businesses or interests therein used or held for use by the Business or the Companies in connection with of the Business, except for (A) sales or other dispositions of obsolete assets in the ordinary course of business consistent with past practiceassets, (B) sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $3,000,000 in the aggregate, or (C) non-exclusive licenses or similar other non-exclusive grants of rights granted with respect to under Intellectual Property Rights in the ordinary course Ordinary Course of business consistent with past practiceBusiness and (C) abandonment, provided that, for the avoidance of doubt, the foregoing clause (v) shall not apply to the abandonment or allowing to lapse or expire any expiry of, Intellectual Property Rights other than Intellectual Property Rights that are material to in the Ordinary Course of Business, including the Transferred Intellectual Property;
(vi) issue, sell, pledge, dispose of, grant, transfer, encumber, subject to a Lien or authorize the issuance, sale, pledge, disposition, grant, transfer, granting of a security interest in, or encumbrance of, any equity interests of either Company, or securities convertible or exchangeable into or exercisable for any shares of such equity interests, or any options, warrants or other rights of any kind to acquire any such equity interests;
(vii) recapitalize, reclassify, distribute, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of the equity interests of either Company;
(viii) permit either Company except as required pursuant to the terms of any Benefit Plan in effect prior to the Execution Date or as otherwise required by applicable Law, (A) enter into or materially amend or supplement any employment, severance, termination or similar type of Contract with any Business Employee, including giving or agreeing to give any increase in the compensation or consulting fees, bonus or pension, welfare, severance or other benefits, severance or termination pay of any Business Employee, except (1) for increases in base salary or wage rate in the Ordinary Course of Business, (2) for the payment of annual bonuses for completed periods based on actual performance in the Ordinary Course of Business and (3) to make the extent permitted by Section 5.1(a)(viii)(B)(1) or Section 5.1(a)(viii)(B)(2) herein or (B) become a party to, enter into, establish, adopt, amend, supplement, commence participation in or terminate any loans, advances, guarantees Benefit Plan or capital contributions any arrangement that would have been a Benefit Plan had it been entered into prior to or investments in any Person (this Agreement other than (1) with respect to satisfy Benefit Plans in which employees of Seller and/or its Affiliates (in addition to Business Employees) generally are eligible to participate or with respect to amendments or modifications that apply to service providers of Seller and/or its Affiliates (in addition to Business Employees) generally, in each case, that are not targeted at Business Employees (except that Seller will not amend or modify any broad-based Benefit Plans that provide for the requirements in Section 4.22)payment of severance benefits to Business Employees) or (2) to conduct any annual renewal or reenrollment of health and welfare plans;
(ix) permit (A) either Company terminate the employment of any Business Employee (other than to satisfy the requirements in Section 4.22) to incur, assume for cause or become liable for any Indebtedness of the type referenced in clauses (a) through (e) of the definition thereof or guarantee any such Indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of such Company, except for prepayable indebtedness for borrowed money incurred in the ordinary course Ordinary Course of business consistent with past practice for working capital purposesBusiness), not to exceed $3,000,000 in the aggregate; or (B) hire any of its assets or properties to become subject to individual who after such hiring is a Lien (Business Employee other than (1) to replace Business Employees whose employment is terminated by Seller in accordance with this Section 5.1(a)(ix) or who resign or retire after the date of this Agreement, or (2) to fill requisitions open as of the Execution Date or to fulfill a Permitted Liencontractual obligation, in each case of clause (1) or (2) so long as such hire is made in the Ordinary Course of Business, at an annual salary or wage rate not in excess of a rate that is consistent with the Ordinary Course of Business and consistent with Seller’s existing compensation structure, and such annual salary or wage rate is not in excess of $200,000 (provided, however, Seller shall not hire any Business Employee without Buyer’s prior written consent if such employee’s compensation would be treated as an indirect cost), (C) modify the job duties of any Business Employee if such modification would result in that individual no longer being a Business Employee, or (D) modify the job duties of any employee of Seller who is not a Business Employee if such modification would result in that individual becoming a Business Employee;
(x) forgive, compromise, satisfy, pay, discharge, settle or cancel enter into any third-party indebtedness owed Contract Related to the Business for the purchase or the Companies, or waive any claim lease of rights of value in favor of the Business or the Companies, in each case with a value in excess of $500,000 in a single instance or $1,000,000 in the aggregatereal property;
(xi) (A) except as sell, license or otherwise distribute any Transferred Intellectual Property, or Seller Licensed Intellectual Property to any Person (or enter into any Contract for the sale or license of any Intellectual Property Rights of Seller with any Person), other than non-exclusive licenses granted to customers, end users, service providers or contractors entered into in the Ordinary Course of Business or, with respect to Seller Licensed Intellectual Property, licenses or distributions outside the scope of the Business that are not inconsistent with the rights granted to Buyer under this Agreement or any Ancillary Agreement, (B) purchase or license any material Intellectual Property Rights from any Person (or enter into any Contract for the purchase or license of Intellectual Property Rights with any Person) in relation to the Business, (C) enter into a Contract with respect to the development of any material Intellectual Property Rights or material products with a third party in relation to the Business or (D) change the pricing or royalties set or charged by Seller to its customers, end users or other licensees or pricing or royalties set or charged by Persons who have licensed material Intellectual Property Rights to Seller, where such pricing or royalties are Related to the Business (other than changes in pricing or royalties made in the Ordinary Course of Business);
(xii) fail to maintain any Intellectual Property Rights required to be set forth in the capital budget set forth in on Section 4.1(a)(xi) 3.15 of the Seller Disclosure Letter (or take reasonable efforts to maintain the “Capex Budget”), make or authorize confidentiality of any capital expenditures in excess of $2,500,000 individually, or $5,000,000 material Trade Secret included in the aggregate, other than any capital expenditure (1) made Transferred Intellectual Property or to be made from insurance proceeds for the repair and/or prevention of damage to any property of the Business, (2) necessary to repair and/or prevent damage to any property of the Business in the event of an emergency situation or force majeure event, or (3) necessary to address emergency human health and safety issues; or (B) fail to make, in calendar year 2023, payments in respect of at least 100% of the capital expenditures contemplated to have been made in the relevant time periods for 2023 as contemplated by the associated project plans underlying the Capex Budget for the months prior to the Closing or, if applicable, fail to make capital expenditure payments in calendar year 2024 substantially in accordance with a capital expenditures budget for 2024 prepared by Sellers in reasonable consultation with Xxxxxx on a basis consistent with the Business’s long range plan delivered to Buyers prior to the date hereof, which budget shall be delivered to Buyers no later than December 31, 2023;
(xii) enter into any Contract that would have been a Material Contract (including any Lease or Insurance Policy) had it been entered into prior to the Execution Date other than in the ordinary course of business with respect to any customer or supplier (provided that, subject to applicable Law, Sellers shall reasonably consult with Buyers and consider in good faith the views of Buyer on the terms thereof prior to execution)Seller Licensed Intellectual Property;
(xiii) amendother than in the Ordinary Course (A) make any loan, modifyadvance, grant a waiver capital contribution, guaranty or other extension of any right or obligation under, terminate or fail to renew any Material Contract (for the avoidance of doubt, the renewal of a Material Contract upon the expiration of such contract on terms that are substantially consistent withcredit to, or more favorable thaninvestment in, the Material Contract it is replacing shall be permitted hereunder)any Person which would constitute a Transferred Asset or Assumed Liability, or (B) transfer any Transferred Asset to any direct or indirect Subsidiary of Seller;
(xiv) enter into make any Commingled Contractsmaterial change in any method of financial accounting or financial accounting practice or policy applicable to the Business, other than such changes as are required by GAAP or applicable Law or are consistent with the Accounting Principles;
(xv) enter into make any new line of business or abandon or discontinue any existing line of businessmaterial Tax election;
(xvi) make amend, cancel or terminate any changes with respect material Permit Related to its accounting policies or proceduresthe Business, except as (y) may be initiated by Seller Parent with respect to Seller Parent’s business generally (provided that such change is not implemented to, or intended to, specifically affect the accounting policies or procedures of the Business) or (z) required by changes in Law or GAAPapplicable Law;
(xvii) make any changes in its policies accelerate or general practices with respect to cash management, management of Inventory, delay the payment of of, or agree to any change in the payment terms of, any accounts payable or accrued expenses other Liabilities or the issuance of invoices or the collection of the accounts receivable or other receivables, including the acceleration or deferral of the payment or collection thereof or failure to properly categorize Inventory, in each case, notes payable (other than (i) in connection with a good faith dispute or in the ordinary course Ordinary Course of business, (ii) pursuant to Contracts to which a Company is a party that are in effect as of the Execution Date or (iii) to satisfy the requirements in Section 4.22Business);
(xviii) settle any Action other than any settlement in the ordinary course of business for an amount not in excess of $3,000,000 in the aggregate that does not involve non-monetary relief;
(xix) (A) file any amended material Tax Return, (B) make or change any material Tax election, (C) agree to any material adjustment of any Tax attribute, (D) surrender any material right or claim to a refund of Taxes, (E) consent to any extension or waiver of the statute of limitations period applicable to any material Taxes, (F) enter into any closing agreement with respect to material Taxes, (G) settle or compromise any material Tax liability, or (H) jeopardize the validity of the CIT/TT Fiscal Unity, it being understood Action on a basis that any filing of a Tax Return or other measures required for the termination and settlement of the domination and profit and loss transfer agreement entered into between BOG and BOG Seller 1 (“DPLTA”) (including effecting (pre)payments in cash or as non-cash payments, as the case may be) shall be as set forth in Section 4.22(c) and in Section 4.22(c) of the Seller Disclosure Letter and, thereby, the fiscal unity for corporate income Tax and trade Tax purposes between BOG as controlled company and the BOG Seller 1 as controlling company (the “CIT/TT Fiscal Unity”) as of the Closing shall be permitted;
(xx) other than (i) as may be required by any Benefit Plan, or (ii) in connection with any action that applies uniformly to Business Employees and all other similarly situated employees of Sellers and their Affiliates, (A) promise, announce or grant to any Business Employee or Service Provider any material increase in compensation or benefits, including, without limitation, severance or termination pay, other than such increases in compensation or benefits (but not severance or termination pay) as are would result in the ordinary course imposition of business, as to timing and amount, in connection with Sellers’ annual review of compensation, (B) as applicable to the Business Employees, adopt, establish, enter into, terminate, waive or materially amend any Benefit Plan (or any plan, policy, agreement, arrangement, program or contract Order that would be a Benefit Plan if in effect on restrict the date hereof) that will be a Transferred Benefit Plan as of the Closing Date, (C) take any action to accelerate the timing of payment, vesting future activity or funding of any compensation or benefits, payable or to become payable to any Business Employee, Former Business Employees or Service Provider, (D) transfer any Business Employee out conduct of the Business or transfer any employee a finding or admission of Sellers that is not a Business Employee as violation of Law or violation of the Execution Date into either rights of any Person or which would reasonably be expected to (A) have a materially adverse impact on the operations of the Companies, (E) hire or engage any Person to become a Business Employee or Service Provider, other than hiring an individual, in the ordinary course of business consistent with past practice, or to fill a position, in each case, with an annual base salary of less than $150,000, or (FB) terminate (other than for causeinvolve any criminal liability, as determined non-monetary remedy, any admission of material wrongdoing or any material wrongful conduct by the Sellers and the Companies in the ordinary course of business consistent with past practice) any Key Employee;Business; or
(xxi) (i) amend, modify, negotiate, adopt, enter into, extend, renew or terminate any Labor Agreement, (ii) recognize or certify any labor organization, works council, labor union or group of employees of any of the Companies as the bargaining representative for any employees of the Companies or (iii) engage in or announce any employee layoffs, furloughs, reductions in force, reductions in compensation, hours or benefits, work schedule changes or similar actions that could implicate the WARN Act;
(xxii) permit any Material Permits to lapse or be cancelled (other than to the extent the applicable Material Permit becomes obsolete, redundant or no longer required by or advisable under applicable Law);
(xxiii) except as may be initiated by Seller Parent with respect to Seller Parent’s groupwide insurance policies (provided that such lapse or cancellation is not initiated to, or intended to, specifically affect the coverage available under such insurance policies relating to the Business), permit any insurance policy relating to the Business, the Companies (or their respective assets, properties, rights or liabilities), the Transferred Assets or the Assumed Liabilities to lapse or be cancelled; or (xxivxix) agree, authorize or commit to do any of the foregoing with respect to the conduct of the Businessforegoing.
(b) Notwithstanding anything to the contrary contained in this Agreement, nothing in this Section 4.1 (but without limiting Section 4.1(a)(B) above)5.1 shall prohibit or otherwise restrict in any way the operation of the business of Seller and its Affiliates, none of Sellers, the Companies and any of their respective Affiliates shall be prevented from undertaking, or be required to obtain Buyers’ consent except solely with respect to, the following actions and inactions:
(i) any action or inaction in connection with any action or inaction required by Law or by any quarantine, “shelter in place,” “stay at home,” workforce reduction, social distancing, shutdown, closure, sequester, or any other similar Law or Order by any Governmental Entity in connection with or in response to COVID-19 (“COVID-19 Measures”) or required or requested by any Governmental Entity in connection with or in response to COVID-19 (provided that, to the extent reasonably practicable and permitted by applicable Law, Sellers shall promptly notify Buyers of any such action or inaction if it would otherwise violate Section 4.1(a)); and
(ii) any action or inaction required or reasonably necessary to (x) protect the health and safety conduct of the Business’ employees, customers or suppliers Business by Seller and other individuals having business dealings with the Business in connection with COVID-19 or (y) respond to service disruptions caused by COVID-19 or any COVID-19 Measures, in each case to the extent reasonably consistent with actions that have been taken or not taken by Sellers or its Affiliates in connection therewith prior to the date hereof (provided that, to the extent reasonably practicable and permitted by applicable Law, Sellers shall promptly notify Buyers of any such action or inaction if it would otherwise violate Section 4.1(a))Affiliates.
(c) Without limiting Section 4.1(a)(B)(xi) hereof, from the Execution Date until the earlier of the Closing and the termination of this Agreement in accordance with its terms, Sellers shall, and shall cause their Affiliates to use commercially reasonably efforts to take the actions set forth on Section 4.1(c)
Appears in 1 contract
Samples: Asset Purchase Agreement (Science Applications International Corp)
Interim Operations of the Business. (a) From During the period from the Execution Date until the earlier of the Closing and the valid termination of this Agreement in accordance with pursuant to its terms, except as (i) as set forth in on Section 4.1(a) 5.1 of -72- the Seller Disclosure Letter, (ii) as otherwise expressly required by this Agreement (including the Pre-Closing Reorganization)Transaction Documents, (iii) as required by an Order or applicable Law, or (iv) as approved by Buyers Buyer in writing in advance (such approval not to be unreasonably conditioned, withheld or delayed solely with respect to any actions that would have been required to be disclosed in Sections 4.1(a)(B)(i)-(vii) or (xi)-(xxiv) of the Seller Disclosure Letterdelayed), Sellers Seller shall, and shall cause each of its Subsidiaries (including the Companies and Seller Entities) to, (A) use their Affiliates (as applicable) to use respective commercially reasonable efforts to (A) (wx) conduct the Business in the ordinary course of business consistent with past practice, (x) maintain and preserve the Business’s relationships and good will with customers, suppliers and others having business dealings with the BusinessOrdinary Course, (y) not renew any Commingled Contracts that may be identified with any effect that would be inconsistent with Sellers’ obligations with respect thereto under Section 4.20(apreserve intact the Business (including its goodwill, assets and properties (normal wear and tear excepted)), and (z) maintain and operate preserve intact, with respect to the Owned Real Property Business, the Seller’s and Transferred Assets in its Subsidiaries’ current relationships with employees, unions, customers, suppliers, distributors, landlords and other Persons with which the ordinary course in all Business has material respectsbusiness relations, and (B) not, and shall cause each of its Affiliates Subsidiaries not to, in each case with respect solely relating to the conduct of the Business:
(i) adopt sell, pledge, dispose of, grant (including any change in either Company’s Organizational Documents options, warrants or create rights to purchase or acquire), transfer, encumber or authorize the issuance, sale, pledge, disposition, grant (including any options, warrants or rights to purchase or acquire), transfer, encumbrance or exercise of the Transferred Subsidiary of a CompanyShares;
(ii) declare, set aside, make create or pay a non-cash dividend on, incur any Encumbrance (other than Permitted Encumbrances) on any Transferred Asset or make create or incur any other non-cash distribution in respect of the equity interests of either Company (provided that Encumbrances on any payment or prepayment (Vorabgewinnabführung / Vorabverlustausgleich) under and in accordance with the DPLTA shall be permitted, whether effected in cash or as non-cash payment)Transferred Subsidiary Share;
(iii) merge create, incur, assume or consolidate either Company with any other Personguarantee, or restructure, reorganize, dissolve or completely or partially liquidate either Company or adopt any plan of restructuring, reorganization, dissolution, liquidation or plan of merger, amalgamation or consolidation or otherwise enter into any agreements or arrangements imposing material changes or restrictions on either Company’s allow the Business or the Business’s assetsTransferred Subsidiaries to create, operations incur, assume or businesses;guarantee, any Indebtedness for borrowed money that would be an Assumed Liability, in excess of $2,500,000 in the aggregate (other than any such Indebtedness that shall be fully repaid and discharged on or prior to the Closing), provided, that the foregoing shall not restrict the ability of Seller or its Subsidiaries to incur any such Indebtedness under a revolving credit facility existing as of the Execution Date that is not an Assumed Liability;
(iv) other than with respect to Contracts to the extent resulting from the activities specifically permitted by any other clause of this Section 5.1(a), enter into any Contract that would have been a Transferred Material Contract had it been entered into prior to this Agreement or amend, modify, supplement, waive, terminate, assign, convey, encumber or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Transferred Material Contract or such Contract that would have been a Transferred Material Contract had it been entered into prior to this Agreement, other than (A) permit either Company expirations of any such Contract in the Ordinary Course pursuant to the terms of such Contract or (B) non-exclusive licenses under Intellectual Property granted in the Ordinary Course of Business;
(v) make any Changes with respect to accounting policies or procedures of the Business or the Transferred Subsidiaries, other than Changes as may be initiated by Seller or any Seller Entity with respect to Seller’s business generally and not otherwise targeted at the Business and implemented in a non-discriminatory manner, and other than as may be required to acquire comply with a change in GAAP (or Japanese GAAP, in the case of the Japanese Subsidiary) or applicable Law;
(A) file any business amended material Tax Return, (B) make, rescind or Personchange any material Tax election, by merger (C) settle or consolidationcompromise any material Tax Contest, purchase (D) enter into or request any Tax ruling, closing or similar agreement with respect to Taxes, (E) waive or amend any statute of substantially all assetslimitations with respect to Taxes (other than any such waivers or amendments which are routine, properties, rights ofautomatic, or equity arise by operation of law), or debt interests or by (F) surrender any other mannerright to claim a material refund of Taxes, in each case, in other than as will not increase to an extent that is more than de minimis any transaction or series Tax Liability of related transactions or (B) enter into the Transferred Subsidiaries for any new joint venture, strategic alliance, partnership or similar venturePost-Closing Period and other than as may be required to comply with applicable Law;
(vvii) other than sales of Inventory pursuant to Contracts with customers to which a Company is a party that are in effect as of the Execution Date, transfer, sell, lease, license, mortgage, pledge, surrender, encumberencumber (other than Permitted Encumbrances), divest, cancel, subject to a Lien (other than a Permitted Lien), abandon or allow to lapse or expire or otherwise dispose of any material assets, properties, licenses, operations, rights, product lines, businesses or interests therein used or held for use by the Business or the Companies in connection with of the Business, including the Transferred Subsidiary Shares, except for (A) sales or other dispositions of Inventory or obsolete assets, in each case, in the Ordinary Course of Business, (B) non-exclusive licenses under Intellectual Property granted in the Ordinary Course of Business, and (C) lapse or expiry of Intellectual Property at the end of the applicable statutory terms;
(viii) transfer, sell, lease, license, pledge, encumber (other than Permitted Encumbrances), cancel, abandon or allow to lapse or expire or otherwise dispose of any Transferred IP, except for (A) non-exclusive licenses granted in the Ordinary Course of Business and (B) lapse or expiry of Intellectual Property at the end of the applicable statutory terms;
(ix) except (A) as required by the terms of the Benefit Plans currently in effect, (B) in the Ordinary Course or (C) as otherwise required by applicable Law, (i) materially increase the compensation or severance benefits payable to any Applicable Employee or grant any new equity-based award, except for increases in base salary in the Ordinary Course of Business, (ii) establish, adopt, amend or terminate any Assumed Plan or amend the terms of any outstanding equity-based awards, (iii) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Benefit Plan or (iv) materially Change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or Change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP;
(x) other than in the Ordinary Course, hire any Person who would be an Employee with an annual base salary in excess of $150,000, or enter into any service or collective agreement, terminate the employment or engagement of any Employee, other than for “cause” or for legitimate business reasons, in Seller’s reasonable good faith judgment and determined in a manner consistent with past practice;
(A) settle, compromise, waive or release any Action primarily affecting the Business or against any of the Transferred Subsidiaries other than if the Losses resulting from such waiver, release, assignment, settlement or compromise involve solely the payment of cash not in excess of $1,000,000 individually or in respect of a series of related claims and customary releases and such amount is fully paid prior to the Closing, or (B) enter into any consent decree or settlement agreement with any Governmental Entity;
(A) amend, assign, sublease, transfer, cancel, terminate or otherwise modify any Real Property Lease, in each case, other than amendments or modifications that are de minimis or ministerial in nature, (B) cause or permit any Transferred Subsidiary to (1) enter into any lease or other agreement for the use or occupancy of Real Property, in each case, in excess of $1,000,000, or (2) acquire any ownership interest in Real Property or enter into any agreement for the purchase or sale of Real Property (including options to purchase), in each case, in excess of $5,000,000, or (C) cause or permit a monetary Encumbrance or any other material Encumbrance (other than any Permitted Encumbrance) of any Real Property or Real Property Lease;
(xiii) cause or permit the Business or any Transferred Subsidiary to acquire (including by merger, consolidation, share exchange or purchase of all or substantially all the assets of) any Person or a material business unit thereof;
(xiv) make any change to the cash management, receivables collection, payables or working capital practices of the Business or the extension of any credits, discounts or rebates, in each case, other than in the Ordinary Course of Business;
(xv) cause or result in the Business or any Transferred Subsidiary to become legally committed to any capital expenditure requiring cash payments after the Closing in excess of an aggregate amount of $3,000,000;
(A) other than in the ordinary course of business consistent with past practice, discontinue any OTR Tire Products without prior consultation with Buyer (B) salesprovided, leases, licenses that not manufacturing or other dispositions of assets with selling an OTR Tire Product because it has not been ordered by a fair market value not in excess of $3,000,000 in the aggregate, or (C) non-exclusive licenses or similar rights granted with respect to Intellectual Property Rights in the ordinary course of business consistent with past practice, provided that, for the avoidance of doubt, the foregoing clause (v) customer shall not apply to the abandonment or allowing to lapse or expire any Intellectual Property Rights other than Intellectual Property Rights that are material to the Business, including the Transferred Intellectual Property;
(vi) issue, sell, pledge, dispose of, grant, transfer, encumber, subject to a Lien or authorize the issuance, sale, pledge, disposition, grant, transfer, granting of a security interest in, or encumbrance of, any equity interests of either Company, or securities convertible or exchangeable into or exercisable for any shares constitute discontinuance of such equity interests, or any options, warrants or other rights of any kind OTR Tire Product so long as such OTR Tire Product remains on the price list made available to acquire any such equity interests;
(vii) recapitalize, reclassify, distribute, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of the equity interests of either Company;
(viii) permit either Company or customers by the Business and is capable of being manufactured and sold to make any loans, advances, guarantees or capital contributions to or investments in any Person (other than to satisfy customers by the requirements in Section 4.22);
(ixBusiness upon customers’ request) permit (A) either Company (other than to satisfy the requirements in Section 4.22) to incur, assume or become liable for any Indebtedness of the type referenced in clauses (a) through (e) of the definition thereof or guarantee any such Indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of such Company, except for prepayable indebtedness for borrowed money incurred in the ordinary course of business consistent with past practice for working capital purposes, not to exceed $3,000,000 in the aggregate; or (B) exit any segment of the Business; or
(xvii) authorize or enter into an agreement or obligation to do any of its assets or properties to become subject to a Lien (other than a Permitted Lien);the foregoing.
(xb) forgive, compromise, satisfy, pay, discharge, settle Except as otherwise expressly required by the Transaction Documents or cancel any third-party indebtedness owed to the Business or the Companies, or waive any claim of rights of value in favor of the Business or the Companies, in each case with a value in excess of $500,000 in a single instance or $1,000,000 in the aggregate;
(xi) (A) except as otherwise set forth in the capital budget set forth in on Section 4.1(a)(xi5.1(b) of the Seller Disclosure Letter (the “Capex Budget”)Letter, make or authorize any capital expenditures in excess of $2,500,000 individually, or $5,000,000 in the aggregate, other than any capital expenditure (1) made or to be made from insurance proceeds for the repair and/or prevention of damage to any property of the Business, (2) necessary to repair and/or prevent damage to any property of the Business in the event of an emergency situation or force majeure event, or (3) necessary to address emergency human health and safety issues; or (B) fail to make, in calendar year 2023, payments in respect of at least 100% of the capital expenditures contemplated to have been made in the relevant time periods for 2023 as contemplated by the associated project plans underlying the Capex Budget for the months prior to the Closing or, if applicable, fail to make capital expenditure payments in calendar year 2024 substantially in accordance with a capital expenditures budget for 2024 prepared by Sellers in reasonable consultation with Xxxxxx on a basis consistent with the Business’s long range plan delivered to Buyers prior to the date hereof, which budget shall be delivered to Buyers no later than December 31, 2023;
(xii) enter into any Contract that would have been a Material Contract (including any Lease or Insurance Policy) had it been entered into prior to the Execution Date other than in the ordinary course of business with respect to any customer or supplier (provided that, subject to applicable Law, Sellers shall reasonably consult with Buyers and consider in good faith the views of Buyer on the terms thereof prior to execution);
(xiii) amend, modify, grant a waiver of any right or obligation under, terminate or fail to renew any Material Contract (for the avoidance of doubt, the renewal of a Material Contract upon the expiration of such contract on terms that are substantially consistent with, or more favorable than, the Material Contract it is replacing shall be permitted hereunder);
(xiv) enter into any Commingled Contracts;
(xv) enter into any new line of business or abandon or discontinue any existing line of business;
(xvi) make any changes with respect to its accounting policies or procedures, except as (y) may be initiated by Seller Parent with respect to Seller Parent’s business generally (provided that such change is agrees not implemented to, or intended and to cause each of its Subsidiaries not to, specifically affect the accounting policies or procedures of the Business) or (z) required by changes in Law or GAAP;
(xvii) make any changes in its policies or general practices with respect to cash management, management of Inventory, the payment of accounts payable or accrued expenses or the issuance of invoices or the collection of the accounts receivable or other receivables, including the acceleration or deferral of the payment or collection thereof or failure to properly categorize Inventory, in each case, other than solely to the extent relating to the Transferred Subsidiaries: (i) in the ordinary course issue or sell any capital stock or other equity interests, notes, bonds or other securities or options, warrants, calls, subscriptions or equity rights to purchase any capital stock or other equity interests of business, any Transferred Subsidiary to any Person other than Seller and its Subsidiaries; (ii) pursuant redeem, split, combine or subdivide the capital stock or other equity interests of any Transferred Subsidiary, in each case to Contracts a Person other than to which a Company is a party that are in effect as of the Execution Date Seller or any Seller Entity; (iii) merge or consolidate any of the Transferred Subsidiaries with any other Person; (iv) authorize or effect any amendment to satisfy or otherwise change the requirements in Section 4.22;
Transferred Subsidiary Organizational Documents; (xviiiv) settle subject any Action other than any settlement in the ordinary course of business for an amount not in excess of $3,000,000 in the aggregate that does not involve non-monetary relief;
(xix) (A) file any amended material Tax Return, (B) make or change any material Tax election, (C) agree Transferred Subsidiary to any material adjustment voluntary bankruptcy, receivership, insolvency or similar proceeding or adopt a plan or agreement of any Tax attributeliquidation, (D) surrender any material right dissolution, merger, consolidation or claim other reorganization or consent to a refund of Taxes, bankruptcy petition that involves any Transferred Subsidiary; (Evi) consent to deposit any extension Transferred Subsidiary Shares into a voting trust or waiver of the statute of limitations period applicable to any material Taxes, (F) enter into any closing a voting agreement, stockholders agreement or similar arrangement with respect to material Taxes, any Transferred Subsidiary Shares or grant any proxy with respect thereto; (Gvii) settle declare or compromise pay any material Tax liability, or (H) jeopardize the validity of the CIT/TT Fiscal Unity, it being understood that any filing of a Tax Return dividends or other measures required for the termination and settlement of the domination and profit and loss transfer agreement entered into between BOG and BOG Seller 1 (“DPLTA”) (including effecting (pre)payments in cash or as non-cash payments, as the case may be) shall be as set forth in Section 4.22(c) and in Section 4.22(c) of the Seller Disclosure Letter and, thereby, the fiscal unity for corporate income Tax and trade Tax purposes between BOG as controlled company and the BOG Seller 1 as controlling company (the “CIT/TT Fiscal Unity”) as of the Closing shall be permitted;
(xx) other than (i) as may be required by any Benefit Plan, or (ii) in connection with any action that applies uniformly to Business Employees and all other similarly situated employees of Sellers and their Affiliates, (A) promise, announce or grant to any Business Employee or Service Provider any material increase in compensation or benefits, including, without limitation, severance or termination pay, other than such increases in compensation or benefits (but not severance or termination pay) as are in the ordinary course of business, as to timing and amount, in connection with Sellers’ annual review of compensation, (B) as applicable to the Business Employees, adopt, establish, enter into, terminate, waive or materially amend any Benefit Plan (or any plan, policy, agreement, arrangement, program or contract that would be a Benefit Plan if in effect on the date hereof) that will be a Transferred Benefit Plan as of the Closing Date, (C) take any action to accelerate the timing of payment, vesting or funding of any compensation or benefits, payable or to become payable to any Business Employee, Former Business Employees or Service Provider, (D) transfer any Business Employee out of the Business or transfer any employee of Sellers that is not a Business Employee as of the Execution Date into either of the Companies, (E) hire or engage any Person to become a Business Employee or Service Provider, other than hiring an individual, in the ordinary course of business consistent with past practice, or to fill a position, in each case, with an annual base salary of less than $150,000, or (F) terminate distributions (other than for causedividends or distributions consisting solely of cash, as determined by the Sellers and the Companies in the ordinary course of business consistent with past practice) any Key Employee;
(xxi) (i) amend, modify, negotiate, adopt, enter into, extend, renew cash equivalents or terminate any Labor Agreement, (ii) recognize or certify any labor organization, works council, labor union or group of employees of any of the Companies as the bargaining representative for any employees of the Companies or (iii) engage in or announce any employee layoffs, furloughs, reductions in force, reductions in compensation, hours or benefits, work schedule changes or similar actions that could implicate the WARN Act;
(xxii) permit any Material Permits to lapse or be cancelled (other than to the extent the applicable Material Permit becomes obsolete, redundant or no longer required by or advisable under applicable Lawinter-company receivables);
(xxiii) except as may be initiated by Seller Parent with respect to Seller Parent’s groupwide insurance policies (provided that such lapse or cancellation is not initiated to, or intended to, specifically affect the coverage available under such insurance policies relating to the Business), permit any insurance policy relating to the Business, the Companies (or their respective assets, properties, rights or liabilities), the Transferred Assets or the Assumed Liabilities to lapse or be cancelled; or (xxivviii) agree, authorize or commit enter into an agreement or obligation to do any of the foregoing with respect to the conduct of the Businessforegoing.
(b) Notwithstanding anything to the contrary in Section 4.1 (but without limiting Section 4.1(a)(B) above), none of Sellers, the Companies and any of their respective Affiliates shall be prevented from undertaking, or be required to obtain Buyers’ consent with respect to, the following actions and inactions:
(i) any action or inaction in connection with any action or inaction required by Law or by any quarantine, “shelter in place,” “stay at home,” workforce reduction, social distancing, shutdown, closure, sequester, or any other similar Law or Order by any Governmental Entity in connection with or in response to COVID-19 (“COVID-19 Measures”) or required or requested by any Governmental Entity in connection with or in response to COVID-19 (provided that, to the extent reasonably practicable and permitted by applicable Law, Sellers shall promptly notify Buyers of any such action or inaction if it would otherwise violate Section 4.1(a)); and
(ii) any action or inaction required or reasonably necessary to (x) protect the health and safety of the Business’ employees, customers or suppliers and other individuals having business dealings with the Business in connection with COVID-19 or (y) respond to service disruptions caused by COVID-19 or any COVID-19 Measures, in each case to the extent reasonably consistent with actions that have been taken or not taken by Sellers or its Affiliates in connection therewith prior to the date hereof (provided that, to the extent reasonably practicable and permitted by applicable Law, Sellers shall promptly notify Buyers of any such action or inaction if it would otherwise violate Section 4.1(a)).
(c) Without limiting Section 4.1(a)(B)(xi) hereof, from the Execution Date until the earlier of the Closing and the termination of this Agreement in accordance with its terms, Sellers shall, and shall cause their Affiliates to use commercially reasonably efforts to take the actions set forth on Section 4.1(c)
Appears in 1 contract
Samples: Share and Asset Purchase Agreement (Goodyear Tire & Rubber Co /Oh/)
Interim Operations of the Business. (a) From the Execution Date until the earlier of the Closing and the termination of this Agreement in accordance with its terms, except Except (i) as set forth in Section 4.1(a) of the Seller Disclosure Letterotherwise contemplated by this Agreement, (ii) as otherwise may be reasonably required by this Agreement in connection with the separation of the Business from the Seller's other activities (including and in respect of which the Pre-Closing ReorganizationSeller has provided to the Purchasing Parties written notice), (iii) as required disclosed on Schedule 7.1 (which, to the extent known as of the date of this Agreement, includes items covered by an Order or applicable Law(ii) above), or (iv) as approved by Buyers in writing with the prior written approval of the Purchasing Parties (such approval which shall not to be unreasonably withheld withheld, conditioned or delayed solely delayed), the Seller covenants that until the Closing it will continue to operate the Business in all material respects in the ordinary course consistent with respect to any actions that would have been required to be disclosed in Sections 4.1(a)(B)(i)-(vii) or (xi)-(xxiv) past practices of the Seller Disclosure Letter), Sellers shallBusiness, and shall cause the Companies and their Affiliates (as applicable) to use commercially reasonable efforts to (A) (w) conduct maintain and preserve intact the Business and its relationships with suppliers, customers, employees and others having business relationships with the Business. Until the Closing, the Seller shall not, and shall cause its Affiliates not to, without the prior written approval of the Purchasing Parties (which approval shall not be unreasonably withheld, conditioned or delayed), and except as contemplated by this Agreement or as described on Schedule 7.1, take any of the following actions:
(a) sell, transfer, modify or otherwise dispose of any material Asset, other than the sale of inventory or other assets in the ordinary course of business consistent with past practices, or fail to maintain in customary repair and condition any tangible material Asset, including the Owned Real Property, it being acknowledged and agreed to by the Seller that in the event of any casualty, loss or damage to any tangible material Asset prior to Closing, the Seller shall either repair or replace such Asset with an asset of comparable quality or transfer to the Kxxx at the Closing the proceeds of any insurance recovery (or the right to such proceeds) with respect thereto;
(b) modify, amend (other than such amendments that are immaterial or ministerial) or terminate any Material Agreement or fail to pay, perform and discharge all material obligations under the Material Agreements;
(c) enter into any Contract relating to the Business involving the annual payment of amounts greater than $200,000 (excluding customer sales and commitments related to customer sales and purchases of inventory, in each case in the ordinary course of business consistent with past practice, );
(xd) maintain and preserve grant any material increase in or commit to increase the Business’s relationships and good will with customers, suppliers and others having business dealings with compensation or bonus of any officer or employee who would constitute a Business Employee on the Business, date of this Agreement (y) not renew any Commingled Contracts that may be identified with any effect that would be inconsistent with Sellers’ obligations with respect thereto under Section 4.20(a), (z) maintain and operate the Owned Real Property and Transferred Assets except for increases in the ordinary course in all material respects, and (B) not, and shall cause each of its Affiliates not to, in each case business consistent with respect past practice or pursuant to the Business:
(i) adopt any change in either Company’s Organizational Documents or create any Subsidiary of a Company;
(ii) declare, set aside, make or pay a non-cash dividend on, or make any other non-cash distribution in respect of the equity interests of either Company (provided that any payment or prepayment (Vorabgewinnabführung / Vorabverlustausgleich) under and in accordance with the DPLTA shall be permitted, whether effected in cash or as non-cash paymentexisting employment arrangements);
(iiie) merge or consolidate either Company with any other Person, or restructure, reorganize, dissolve or completely or partially liquidate either Company or adopt any plan of restructuring, reorganization, dissolution, liquidation or plan of merger, amalgamation or consolidation or otherwise enter into any agreements or arrangements imposing material changes or restrictions on either Company’s or the Business’s assets, operations or businesses;
(iv) (A) permit either Company or the Business to acquire any business or Person, encumber by merger or consolidation, purchase of substantially all assets, properties, rights of, or equity or debt interests or by any other manner, in each case, in any transaction or series of related transactions or (B) enter into any new joint venture, strategic alliance, partnership or similar venture;
(v) other than sales of Inventory pursuant to Contracts with customers to which a Company is a party that are in effect as of the Execution Date, transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, subject to a Lien (other than a Permitted Lien), abandon or allow to lapse or expire or otherwise dispose (not including licenses of any material assets, properties, licenses, operations, rights, product lines, businesses or interests therein used or held for grants of rights to use by the Business or the Companies in connection with the Business, except for (A) sales or other dispositions of obsolete assets Intellectual Property in the ordinary course of business consistent with past practice, (B) sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $3,000,000 in the aggregate), or grant any security interest in or to, any Asset, except for Permitted Liens or Permitted Exceptions, as applicable;
(Cf) non-exclusive licenses enter into any union contract or similar rights granted collective bargaining agreement with any Business Employee;
(g) use the Business or the Assets in respect of a guarantee, surety or endorsement of the Liability of any other Person;
(h) cancel or compromise any debt or claim of the Business or the Assets or waive or release any material right of the Seller with respect to Intellectual Property Rights the Business or the Assets, in each case other than in the ordinary course of business consistent with past practice;
(i) change its methods, provided that, for practices or timing of (i) collecting Accounts Receivable or other amounts owed to Seller in respect of the avoidance Business or (ii) paying any amounts payable or other debts or obligations of doubt, the foregoing clause (v) shall not apply to the abandonment or allowing to lapse or expire any Intellectual Property Rights other than Intellectual Property Rights that are material to Seller in respect of the Business, including including, in either case, any changes intended to, or having the Transferred Intellectual effect of, accelerating the collection of any Accounts Receivable, delaying the payment of any Accounts Payable or changing from current to long-term or from long-term to current any liabilities of the Seller in respect of the Business;
(j) lease or dispose of any material interest in, or take any actions that would be materially detrimental to the current use, operation or value of the Owned Real Property;
(vi) issue, sell, pledge, dispose of, grant, transfer, encumber, subject to a Lien or authorize the issuance, sale, pledge, disposition, grant, transfer, granting of a security interest in, or encumbrance of, any equity interests of either Company, or securities convertible or exchangeable into or exercisable for any shares of such equity interests, or any options, warrants or other rights of any kind to acquire any such equity interests;
(vii) recapitalize, reclassify, distribute, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of the equity interests of either Company;
(viii) permit either Company or the Business to make any loans, advances, guarantees or capital contributions to or investments in any Person (other than to satisfy the requirements in Section 4.22);
(ix) permit (A) either Company (other than to satisfy the requirements in Section 4.22) to incur, assume or become liable for any Indebtedness of the type referenced in clauses (a) through (e) of the definition thereof or guarantee any such Indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of such Company, except for prepayable indebtedness for borrowed money incurred in the ordinary course of business consistent with past practice for working capital purposes, not to exceed $3,000,000 in the aggregate; or (B) any of its assets or properties to become subject to a Lien (other than a Permitted Lien);
(x) forgive, compromise, satisfy, pay, discharge, settle or cancel any third-party indebtedness owed to the Business or the Companies, or waive any claim of rights of value in favor of the Business or the Companies, in each case with a value in excess of $500,000 in a single instance or $1,000,000 in the aggregate;
(xi) (Ak) except as set forth required by Law or GAAP, change in any material respect the capital budget set forth in Section 4.1(a)(xi) of the Seller Disclosure Letter (the “Capex Budget”), make or authorize any capital expenditures in excess of $2,500,000 individually, or $5,000,000 in the aggregate, other than any capital expenditure (1) made or to be made from insurance proceeds for the repair and/or prevention of damage to any property of the Business, (2) necessary to repair and/or prevent damage to any property of the Business in the event of an emergency situation or force majeure event, or (3) necessary to address emergency human health and safety issues; or (B) fail to make, in calendar year 2023, payments in respect of at least 100% of the capital expenditures contemplated to have been made in the relevant time periods for 2023 as contemplated accounting methods used by the associated project plans underlying the Capex Budget for the months prior to the Closing Seller; or, if applicable, fail to make capital expenditure payments in calendar year 2024 substantially in accordance with a capital expenditures budget for 2024 prepared by Sellers in reasonable consultation with Xxxxxx on a basis consistent with the Business’s long range plan delivered to Buyers prior to the date hereof, which budget shall be delivered to Buyers no later than December 31, 2023;
(xiil) enter into any Contract that would have been a Material Contract (including any Lease or Insurance Policy) had it been entered into prior to the Execution Date other than in the ordinary course of business with respect to any customer or supplier (provided that, subject to applicable Law, Sellers shall reasonably consult with Buyers and consider in good faith the views of Buyer on the terms thereof prior to execution);
(xiii) amend, modify, grant a waiver of any right or obligation under, terminate or fail to renew any Material Contract (for the avoidance of doubt, the renewal of a Material Contract upon the expiration of such contract on terms that are substantially consistent with, or more favorable than, the Material Contract it is replacing shall be permitted hereunder);
(xiv) enter into any Commingled Contracts;
(xv) enter into any new line of business or abandon or discontinue any existing line of business;
(xvi) make any changes with respect to its accounting policies or procedures, except as (y) may be initiated by Seller Parent with respect to Seller Parent’s business generally (provided that such change is not implemented to, or intended to, specifically affect the accounting policies or procedures of the Business) or (z) required by changes in Law or GAAP;
(xvii) make any changes in its policies or general practices with respect to cash management, management of Inventory, the payment of accounts payable or accrued expenses or the issuance of invoices or the collection of the accounts receivable or other receivables, including the acceleration or deferral of the payment or collection thereof or failure to properly categorize Inventory, in each case, other than (i) in the ordinary course of business, (ii) pursuant to Contracts to which a Company is a party that are in effect as of the Execution Date or (iii) to satisfy the requirements in Section 4.22;
(xviii) settle any Action other than any settlement in the ordinary course of business for an amount not in excess of $3,000,000 in the aggregate that does not involve non-monetary relief;
(xix) (A) file any amended material Tax Return, (B) make or change any material Tax election, (C) agree to any material adjustment of any Tax attribute, (D) surrender any material right or claim to a refund of Taxes, (E) consent to any extension or waiver of the statute of limitations period applicable to any material Taxes, (F) enter into any closing agreement with respect to material Taxes, (G) settle or compromise any material Tax liability, or (H) jeopardize the validity of the CIT/TT Fiscal Unity, it being understood that any filing of a Tax Return or other measures required for the termination and settlement of the domination and profit and loss transfer agreement entered into between BOG and BOG Seller 1 (“DPLTA”) (including effecting (pre)payments in cash or as non-cash payments, as the case may be) shall be as set forth in Section 4.22(c) and in Section 4.22(c) of the Seller Disclosure Letter and, thereby, the fiscal unity for corporate income Tax and trade Tax purposes between BOG as controlled company and the BOG Seller 1 as controlling company (the “CIT/TT Fiscal Unity”) as of the Closing shall be permitted;
(xx) other than (i) as may be required by any Benefit Plan, or (ii) in connection with any action that applies uniformly to Business Employees and all other similarly situated employees of Sellers and their Affiliates, (A) promise, announce or grant to any Business Employee or Service Provider any material increase in compensation or benefits, including, without limitation, severance or termination pay, other than such increases in compensation or benefits (but not severance or termination pay) as are in the ordinary course of business, as to timing and amount, in connection with Sellers’ annual review of compensation, (B) as applicable to the Business Employees, adopt, establish, enter into, terminate, waive or materially amend any Benefit Plan (or any plan, policy, agreement, arrangementcontract, program commitment or contract that would be a Benefit Plan if in effect on the date hereof) that will be a Transferred Benefit Plan as of the Closing Date, (C) take any action to accelerate the timing of payment, vesting or funding of any compensation or benefits, payable or to become payable to any Business Employee, Former Business Employees or Service Provider, (D) transfer any Business Employee out of the Business or transfer any employee of Sellers that is not a Business Employee as of the Execution Date into either of the Companies, (E) hire or engage any Person to become a Business Employee or Service Provider, other than hiring an individual, in the ordinary course of business consistent with past practice, or to fill a position, in each case, with an annual base salary of less than $150,000, or (F) terminate (other than for cause, as determined by the Sellers and the Companies in the ordinary course of business consistent with past practice) any Key Employee;
(xxi) (i) amend, modify, negotiate, adopt, enter into, extend, renew or terminate any Labor Agreement, (ii) recognize or certify any labor organization, works council, labor union or group of employees of any of the Companies as the bargaining representative for any employees of the Companies or (iii) engage in or announce any employee layoffs, furloughs, reductions in force, reductions in compensation, hours or benefits, work schedule changes or similar actions that could implicate the WARN Act;
(xxii) permit any Material Permits to lapse or be cancelled (other than to the extent the applicable Material Permit becomes obsolete, redundant or no longer required by or advisable under applicable Law);
(xxiii) except as may be initiated by Seller Parent with respect to Seller Parent’s groupwide insurance policies (provided that such lapse or cancellation is not initiated to, or intended to, specifically affect the coverage available under such insurance policies relating to the Business), permit any insurance policy relating to the Business, the Companies (or their respective assets, properties, rights or liabilities), the Transferred Assets or the Assumed Liabilities to lapse or be cancelled; or (xxiv) agree, authorize or commit arrangement to do any of the foregoing with respect foregoing, or authorize, recommend, propose or announce an intention to the conduct do, any of the Business.
(b) foregoing. Notwithstanding anything to any of the contrary in Section 4.1 (but without limiting Section 4.1(a)(B) above), none of Sellersforegoing, the Companies and any of their respective Affiliates Seller shall be prevented allowed to retain and remove cash or cash equivalents from undertaking, or be required to obtain Buyers’ consent with respect to, the following actions and inactions:
(i) any action or inaction in connection with any action or inaction required by Law or by any quarantine, “shelter in place,” “stay at home,” workforce reduction, social distancing, shutdown, closure, sequester, or any other similar Law or Order by any Governmental Entity in connection with or in response to COVID-19 (“COVID-19 Measures”) or required or requested by any Governmental Entity in connection with or in response to COVID-19 (provided that, to the extent reasonably practicable and permitted by applicable Law, Sellers shall promptly notify Buyers of any such action or inaction if it would otherwise violate Section 4.1(a)); and
(ii) any action or inaction required or reasonably necessary to (x) protect the health and safety of the Business’ employees, customers or suppliers and other individuals having business dealings with the Business in connection with COVID-19 at any time or (y) respond from time to service disruptions caused by COVID-19 time at or any COVID-19 Measures, in each case to the extent reasonably consistent with actions that have been taken or not taken by Sellers or its Affiliates in connection therewith prior to the date hereof (provided that, to the extent reasonably practicable and permitted by applicable Law, Sellers shall promptly notify Buyers of any such action or inaction if it would otherwise violate Section 4.1(a))Closing.
(c) Without limiting Section 4.1(a)(B)(xi) hereof, from the Execution Date until the earlier of the Closing and the termination of this Agreement in accordance with its terms, Sellers shall, and shall cause their Affiliates to use commercially reasonably efforts to take the actions set forth on Section 4.1(c)
Appears in 1 contract
Samples: Asset Purchase Agreement (Enzon Pharmaceuticals Inc)
Interim Operations of the Business. (a) From During the period from the Execution Date until the earlier of the Closing and the termination of this Agreement in accordance with its termsClosing, except (iv) as set forth in Section 4.1(a) 6.1 of the Seller AT&T Disclosure Letter, (iiw) as otherwise required by or provided for in this Agreement (including the INVIDI Contribution or Pre-Closing Reorganization), (iiix) as required by an Order a Governmental Entity or applicable Law, or (ivy) as approved by Buyers Buyer in writing (such approval not to be unreasonably conditioned, withheld or delayed solely with respect to any actions that would have been required to be disclosed in Sections 4.1(a)(B)(i)-(vii) or (xi)-(xxiv) of the Seller Disclosure Letterdelayed), Sellers Blocker shall, and AT&T shall cause the Companies and their Affiliates Blocker to, (as applicable1) to use commercially reasonable efforts to (A) (w) conduct the Business its business in the ordinary course of business consistent with past practice, (x) maintain and preserve the Business’s relationships and good will with customers, suppliers and others having business dealings with the Business, (y) not renew any Commingled Contracts that may be identified with any effect that would be inconsistent with Sellers’ obligations with respect thereto under Section 4.20(a), (z) maintain and operate the Owned Real Property and Transferred Assets in the ordinary course Ordinary Course in all material respects, respects and (B2) not, and shall cause each of its Affiliates not to, in each case with respect to the Business:
(i) adopt (A) make any change in either Companydeclaration or payment of any non-cash dividend or other non-cash distribution with respect to any of its capital stock or other equity interests; (B) repurchase, redeem, or otherwise acquire or cancel any of Blocker’s Organizational Documents capital stock or create other equity interests; or (C) reclassify or amend the terms of issue with respect to Blocker’s capital stock or other equity interests, or issue or sell any Subsidiary capital stock or other equity interests or options, warrants, calls, subscriptions or equity rights to purchase any capital stock or other equity interests of a CompanyBlocker to any Person (other than AT&T);
(ii) declareacquire (by merger, set asideconsolidation, make acquisition of Equity Interests or pay a non-cash dividend onassets, or make otherwise) any corporation, partnership, limited liability company, other non-cash distribution in respect of the business organization or division thereof or any equity interests of either Company (provided that any payment or prepayment (Vorabgewinnabführung / Vorabverlustausgleich) under and in accordance with the DPLTA shall be permitted, whether effected in cash or as non-cash payment)interest therein;
(iii) merge or consolidate either Company with any other Person, or restructure, reorganize, dissolve or completely or partially liquidate either Company or adopt any plan of restructuring, reorganization, dissolution, liquidation or plan of merger, amalgamation or consolidation or otherwise enter into any agreements line of business unrelated to the business conducted by Blocker, the Company, and its Subsidiaries as of the date hereof or arrangements imposing discontinue any material changes line of business or restrictions on either Company’s or the Business’s assets, operations or businessesany material business operations;
(iv) authorize or effect any amendment to or otherwise change the certificate of incorporation, bylaws or other organizational documents of Blocker;
(v) make any investment in another Person, other than investments in the Company or wholly owned Subsidiaries of the Company;
(vi) create or incur any material Encumbrance on the assets of Blocker that would not be released at or prior to Closing other than Permitted Encumbrances;
(vii) adopt a plan or agreement of complete or partial liquidation, dissolution, reorganization, or merger;
(viii) deposit any Blocker Units or Company Equity Securities into a voting trust or enter into a voting agreement or arrangement with respect to any Blocker Units or Company Equity Securities or grant any proxy with respect thereto;
(ix) make any changes with respect to material accounting policies or procedures of Blocker, other than changes as may be initiated by AT&T with respect to AT&T’s ultimate parent’s business generally and other than as may be required to conform to GAAP or by applicable Law;
(x) except in the Ordinary Course and solely with respect to Blocker or any New Blocker Subsidiaries, (A) permit either Company amend any material Tax Return, (B) make, change or revoke any material Tax election or settle or compromise any material income Tax liability, (C) settle any audit, assessment, dispute, proceeding or investigation in respect of a material amount of Taxes (to the Business extent such action could be reasonably expected to acquire affect Tax periods after the Closing), (D) surrender any business right to claim a material Tax refund, (E) consent to any extension or Personwaiver of the limitation period applicable to any material Tax claim or assessment, by merger (F) enter into any material Contract in respect of Taxes with any Governmental Entity, (G) elect any material method of accounting for Tax purposes, (H) change any method of accounting for Tax purposes or consolidation, purchase of substantially all assets, properties, rights of, or equity or debt interests or by (I) change any other mannerannual Tax accounting period, in each case, in other than as required by applicable Law; and except with respect to any transaction or series of related transactions or (B) enter into any new joint ventureconsolidated, strategic allianceunitary, partnership combined or similar ventureTax Returns, including any Combined Tax Returns (other than such Tax Returns relating solely to Blocker and one or more New Blocker Subsidiaries);
(vxi) other than sales of Inventory pursuant to Contracts with customers to which a Company is a party that are in effect as of the Execution Date, transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, subject fail to a Lien (other than a Permitted Lien)maintain, abandon or allow to lapse or expire or otherwise dispose of any material assetsassets or properties of Blocker, properties, licenses, operations, rights, product lines, businesses or interests therein used or held for use by the Business or the Companies in connection with the Businessincluding Blocker Units, except for (A) sales or other dispositions of obsolete assets assets;
(xii) other than in the ordinary course of business consistent with past practiceOrdinary Course, assign, transfer, forfeit, cancel, fail to renew, or fail to extend or defend any material Communications License or other material Permit, or take any action or pay any fee necessary to maintain such material Communications License or other material Permit;
(xiii) commence any Action or compromise or settle any Action (A) if the amount payable in connection therewith would be required to be paid on or after the Closing Date, (B) salesthat would restrict the future activity or conduct of Blocker, leases, licenses the Company or other dispositions any of assets with a fair market value not in excess of $3,000,000 its Subsidiaries in the aggregateconduct of their business, or (C) non-exclusive licenses that would result in a finding or similar rights granted with respect to Intellectual Property Rights in the ordinary course of business consistent with past practice, provided that, for the avoidance of doubt, the foregoing clause (v) shall not apply to the abandonment or allowing to lapse or expire any Intellectual Property Rights other than Intellectual Property Rights that are material to the Business, including the Transferred Intellectual Property;
(vi) issue, sell, pledge, dispose of, grant, transfer, encumber, subject to a Lien or authorize the issuance, sale, pledge, disposition, grant, transfer, granting admission of a security interest in, violation of Law or encumbrance of, any equity interests violation of either Company, or securities convertible or exchangeable into or exercisable for any shares of such equity interests, or any options, warrants or other the rights of any kind to acquire any such equity interests;
(vii) recapitalize, reclassify, distribute, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of the equity interests of either Company;
(viii) permit either Company or the Business to make any loans, advances, guarantees or capital contributions to or investments in any Person (other than to satisfy the requirements in Section 4.22);
(ix) permit (A) either Company (other than to satisfy the requirements in Section 4.22) to incur, assume or become liable for any Indebtedness of the type referenced in clauses (a) through (e) of the definition thereof or guarantee any such Indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of such Company, except for prepayable indebtedness for borrowed money incurred in the ordinary course of business consistent with past practice for working capital purposes, not to exceed $3,000,000 in the aggregate; or (B) any of its assets or properties to become subject to a Lien (other than a Permitted Lien);
(x) forgive, compromise, satisfy, pay, discharge, settle or cancel any third-party indebtedness owed to the Business or the Companies, or waive any claim of rights of value in favor of the Business or the Companies, in each case with a value in excess of $500,000 in a single instance or $1,000,000 in the aggregate;
(xi) (A) except as set forth in the capital budget set forth in Section 4.1(a)(xi) of the Seller Disclosure Letter (the “Capex Budget”), make or authorize any capital expenditures in excess of $2,500,000 individually, or $5,000,000 in the aggregate, other than any capital expenditure (1) made or to be made from insurance proceeds for the repair and/or prevention of damage to any property of the Business, (2) necessary to repair and/or prevent damage to any property of the Business in the event of an emergency situation or force majeure event, or (3) necessary to address emergency human health and safety issues; or (B) fail to make, in calendar year 2023, payments in respect of at least 100% of the capital expenditures contemplated to have been made in the relevant time periods for 2023 as contemplated by the associated project plans underlying the Capex Budget for the months prior to the Closing or, if applicable, fail to make capital expenditure payments in calendar year 2024 substantially in accordance with a capital expenditures budget for 2024 prepared by Sellers in reasonable consultation with Xxxxxx on a basis consistent with the Business’s long range plan delivered to Buyers prior to the date hereof, which budget shall be delivered to Buyers no later than December 31, 2023;
(xii) enter into any Contract that would have been a Material Contract (including any Lease or Insurance Policy) had it been entered into prior to the Execution Date other than in the ordinary course of business with respect to any customer or supplier (provided that, subject to applicable Law, Sellers shall reasonably consult with Buyers and consider in good faith the views of Buyer on the terms thereof prior to execution);
(xiii) amend, modify, grant a waiver of any right or obligation under, terminate or fail to renew any Material Contract (for the avoidance of doubt, the renewal of a Material Contract upon the expiration of such contract on terms that are substantially consistent with, or more favorable than, the Material Contract it is replacing shall be permitted hereunder);
(xiv) enter into any Commingled Contracts;
(xv) enter into any new line of business or abandon or discontinue any existing line of business;
(xvi) make any changes with respect to its accounting policies or procedures, except as (y) may be initiated by Seller Parent with respect to Seller Parent’s business generally (provided that such change is not implemented to, or intended to, specifically affect the accounting policies or procedures of the Business) or (z) required by changes in Law or GAAP;
(xvii) make any changes in its policies or general practices with respect to cash management, management of Inventory, the payment of accounts payable or accrued expenses or the issuance of invoices or the collection of the accounts receivable or other receivables, including the acceleration or deferral of the payment or collection thereof or failure to properly categorize Inventory, in each case, other than (i) in the ordinary course of business, (ii) pursuant to Contracts to which a Company is a party that are in effect as of the Execution Date or (iii) to satisfy the requirements in Section 4.22;
(xviii) settle any Action other than any settlement in the ordinary course of business for an amount not in excess of $3,000,000 in the aggregate that does not involve non-monetary relief;
(xix) (A) file any amended material Tax Return, (B) make or change any material Tax election, (C) agree to any material adjustment of any Tax attribute, (D) surrender any material right or claim to a refund of Taxes, (E) consent to any extension or waiver of the statute of limitations period applicable to any material Taxes, (F) enter into any closing agreement with respect to material Taxes, (G) settle or compromise any material Tax liability, or (H) jeopardize the validity of the CIT/TT Fiscal Unity, it being understood that any filing of a Tax Return or other measures required for the termination and settlement of the domination and profit and loss transfer agreement entered into between BOG and BOG Seller 1 (“DPLTA”) (including effecting (pre)payments in cash or as non-cash payments, as the case may be) shall be as set forth in Section 4.22(c) and in Section 4.22(c) of the Seller Disclosure Letter and, thereby, the fiscal unity for corporate income Tax and trade Tax purposes between BOG as controlled company and the BOG Seller 1 as controlling company (the “CIT/TT Fiscal Unity”) as of the Closing shall be permitted;
(xx) other than (i) as may be required by any Benefit Plan, or (ii) in connection with any action that applies uniformly to Business Employees and all other similarly situated employees of Sellers and their Affiliates, (A) promise, announce or grant to any Business Employee or Service Provider any material increase in compensation or benefits, including, without limitation, severance or termination pay, other than such increases in compensation or benefits (but not severance or termination pay) as are in the ordinary course of business, as to timing and amount, in connection with Sellers’ annual review of compensation, (B) as applicable to the Business Employees, adopt, establish, enter into, terminate, waive or materially amend any Benefit Plan (or any plan, policy, agreement, arrangement, program or contract that would be a Benefit Plan if in effect on the date hereof) that will be a Transferred Benefit Plan as of the Closing Date, (C) take any action to accelerate the timing of payment, vesting or funding of any compensation or benefits, payable or to become payable to any Business Employee, Former Business Employees or Service Provider, (D) transfer any Business Employee out of the Business or transfer any employee of Sellers that is not a Business Employee as of the Execution Date into either of the Companies, (E) hire or engage any Person to become a Business Employee or Service Provider, other than hiring an individual, in the ordinary course of business consistent with past practice, or to fill a position, in each case, with an annual base salary of less than $150,000, or (F) terminate (other than for cause, as determined by the Sellers and the Companies in the ordinary course of business consistent with past practice) any Key Employee;
(xxi) (i) amend, modify, negotiate, adopt, enter into, extend, renew or terminate any Labor Agreement, (ii) recognize or certify any labor organization, works council, labor union or group of employees of any of the Companies as the bargaining representative for any employees of the Companies or (iii) engage in or announce any employee layoffs, furloughs, reductions in force, reductions in compensation, hours or benefits, work schedule changes or similar actions that could implicate the WARN Act;
(xxii) permit any Material Permits to lapse or be cancelled (other than to the extent the applicable Material Permit becomes obsolete, redundant or no longer required by or advisable under applicable Law);
(xxiii) except as may be initiated by Seller Parent with respect to Seller Parent’s groupwide insurance policies (provided that such lapse or cancellation is not initiated to, or intended to, specifically affect the coverage available under such insurance policies relating to the Business), permit any insurance policy relating to the Business, the Companies (or their respective assets, properties, rights or liabilities), the Transferred Assets or the Assumed Liabilities to lapse or be cancelled; or (xxiv) agree, authorize or commit to do any of the foregoing with respect to the conduct of the Businessforegoing.
(b) Notwithstanding anything to the contrary in Section 4.1 (but without limiting Section 4.1(a)(B) above)set forth herein, none of Sellers, the Companies and any of their respective Affiliates shall be prevented from undertaking, or be required to obtain Buyers’ consent with respect to, the following actions and inactions:
Buyer acknowledges that (i) any action or inaction in connection with any action or inaction required by Law or by any quarantineAT&T and its Affiliates may, “shelter in place,” “stay at home,” workforce reduction, social distancing, shutdown, closure, sequester, or any other similar Law or Order by any Governmental Entity in connection with or in response to COVID-19 (“COVID-19 Measures”) or required or requested by any Governmental Entity in connection with or in response to COVID-19 (provided that, prior to the extent reasonably practicable Closing, effect the Pre-Closing Reorganization and permitted by applicable Law, Sellers shall promptly notify Buyers of any such action or inaction if it would otherwise violate Section 4.1(a)); and
INVIDI Contribution and (ii) any action the foregoing limitations of this Section 6.1 shall not apply to, or inaction required restrict the activities or reasonably necessary to (x) protect the health and safety of the Business’ employeesoperations of, customers or suppliers and other individuals having business dealings Blocker with the Business in connection with COVID-19 or (y) respond to service disruptions caused by COVID-19 or any COVID-19 Measures, in each case respect to the extent reasonably consistent with actions that have been taken or not taken by Sellers or its Affiliates in connection therewith prior to the date hereof (provided that, to the extent reasonably practicable Excluded Assets and permitted by applicable Law, Sellers shall promptly notify Buyers of any such action or inaction if it would otherwise violate Section 4.1(a))Excluded Liabilities.
(c) Without limiting Section 4.1(a)(B)(xi) hereof, During the period from the Execution Date until the earlier of Closing, except (x) as otherwise required by this Agreement (including the Pre-Closing Reorganization, the Debt-Financed Distribution and the termination of this Agreement INVIDI Contribution), (y) [***], or (z) as required by a Governmental Entity or applicable Law, the Company shall (i) use commercially reasonable efforts to conduct the Business in the Ordinary Course in all material respects, (ii) use, to the extent consistent with clause (i), commercially reasonable efforts to preserve the Business intact, maintain the Business as a going concern, and maintain existing relations with Governmental Entities and other third parties, including customers, suppliers, content providers, distributors, licensors, creditors, lessors, employees and business associates, (iii) make distributions to Blocker and TPG VIII Merlin (including Company Tax Distributions) in the Ordinary Course in accordance with its terms, Sellers shallthe Company Operating Agreement, and shall cause their Affiliates to use commercially reasonably efforts to take (iv) not (1) accelerate or delay the actions set forth collection of or discount any accounts receivable, (2) accelerate or delay the payment of accounts payable or defer expenses, (3) reduce inventories, (4) incur or repay indebtedness or (5) otherwise increase cash on Section 4.1(c)hand, except in each case, in the Ordinary Course.
Appears in 1 contract
Interim Operations of the Business. (a) From the Execution Date until the earlier of the Closing Seller covenants and agrees (for itself and the termination Subsidiaries) that, after the date of this Agreement and through the Closing (the “Interim Period”) (unless Buyer otherwise approves in accordance with its termswriting) and except as required by applicable Laws or as otherwise expressly required by this Agreement, except (i) as set forth the Xxxxx Business shall be conducted in Section 4.1(a) the Ordinary Course of the Seller Disclosure Letter, Business; (ii) as otherwise required by this Agreement (including Seller shall use and shall cause the Pre-Closing Reorganization)Subsidiaries to use its and their commercially reasonable efforts to preserve intact the Xxxxx Business, the Acquired Assets and material business relationships with licensors, licensees, suppliers, distributors, clients and others having business relationships with the Xxxxx Business; and (iii) as required by an Order or applicable Law, or (iv) as approved by Buyers in writing (such approval not to be unreasonably withheld or delayed solely with respect to any actions that would have been required to be disclosed in Sections 4.1(a)(B)(i)-(vii) or (xi)-(xxiv) of the Seller Disclosure Letter), Sellers shall, and shall cause the Companies Subsidiaries to, maintain, protect and their Affiliates (as applicable) enforce the Xxxxx Trademark and the Intellectual Property Assets in Seller’s reasonable discretion, to use commercially reasonable efforts to (A) (w) conduct the Business be exercised in the ordinary course Ordinary Course of business consistent Business. In addition, Seller shall and shall cause the Subsidiaries to, upon request of Buyer, confer with past practiceone (1) or more designated Representatives of Buyer to report material operational matters and to report the general status of ongoing operations, (x) maintain and preserve in each case, solely with respect to the Xxxxx Business’s relationships and good will . Seller shall keep, or cause the Subsidiaries to keep, all material insurance policies currently maintained with customers, suppliers and others having business dealings with respect to the Xxxxx Business, or suitable replacements or renewals, in full force and effect until the Closing.
(yb) In furtherance and not renew any Commingled Contracts that may be identified with any effect that would be inconsistent with Sellers’ obligations with respect thereto under in limitation of Section 4.20(a6.1(a), (z) maintain and operate the Owned Real Property and Transferred Assets in the ordinary course in all material respectsother than as set forth on Schedule 6.1(b), and (B) except as required by applicable Laws, as otherwise expressly required by this Agreement or as consented to in writing by Buyer, Seller agrees that during the Interim Period, it shall not, and shall cause each of its Affiliates not to, effect any of the following (as each pertains to or is related to the Xxxxx Business, the Acquired Assets or the Assumed Liabilities) without the prior written consent of Buyer in each case with respect to the Business:
instance: (i) adopt amend, renew or terminate any change in either Company’s Organizational Documents or create any Subsidiary of a Company;
Assigned Contract; (ii) declare, set aside, make or pay a non-cash dividend on, or make any other non-cash distribution in respect of the equity interests of either Company (provided that any payment or prepayment (Vorabgewinnabführung / Vorabverlustausgleich) under and in accordance with the DPLTA shall be permitted, whether effected in cash or as non-cash payment);
(iii) merge or consolidate either Company with any other Person, or restructure, reorganize, dissolve or completely or partially liquidate either Company or adopt any plan of restructuring, reorganization, dissolution, liquidation or plan of merger, amalgamation or consolidation or otherwise enter into any agreements or arrangements imposing material changes or restrictions on either Company’s or the Business’s assets, operations or businesses;
(iv) (A) permit either Company or the Business to acquire any business or Person, by merger or consolidation, purchase of substantially all assets, properties, rights of, or equity or debt interests or by any other manner, in each case, in any transaction or series of related transactions or (B) enter into any new joint venture, strategic alliance, partnership or similar venture;
(v) other than sales of Inventory pursuant to Contracts with customers to which a Company is a party that are in effect as of the Execution Datesell, transfer, sell, lease, license, mortgage, pledge, surrenderabandon, encumber, divestdedicate to the public, permit to lapse, fail to maintain, cancel, subject to a Lien (other than a Permitted Lien), abandon or allow to lapse or expire license or otherwise dispose of any material assets, properties, licenses, operations, rights, product lines, businesses or interests therein used or held for use by Acquired Asset (other than the non-exclusive licensing of Acquired Assets to suppliers and manufacturers in the Ordinary Course of Business or the Companies abandonment of non-material Acquired Assets no longer used in connection with or useful to the Business, except for (A) sales or other dispositions of obsolete assets Xxxxx Business in the ordinary course Ordinary Course of business consistent with past practice, (B) sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $3,000,000 in the aggregate, or (C) non-exclusive licenses or similar rights granted with respect to Intellectual Property Rights in the ordinary course of business consistent with past practice, Business); provided that, for the avoidance of doubt, that the foregoing clause (v) shall not apply to sales of Seller’s products in the abandonment or allowing to lapse or expire any Intellectual Property Rights other than Intellectual Property Rights that are material to the Ordinary Course of Business, including which sales to customer accounts are not the Transferred Intellectual Property;
(vi) issue, sell, pledge, dispose of, grant, transfer, encumber, subject to a Lien or authorize the issuance, sale, pledge, disposition, grant, transfer, granting of a security interest in, or encumbrance of, any equity interests of either Company, or securities convertible or exchangeable into or exercisable for any shares of such equity interests, or any options, warrants or other rights of any kind to acquire any such equity interests;
(vii) recapitalize, reclassify, distribute, split, combine, subdivide license or redeem, purchase or otherwise acquire, directly or indirectly, any of the equity interests of either Company;
(viii) permit either Company or the Business to make any loans, advances, guarantees or capital contributions to or investments in any Person exclusivity (other than limited licenses to satisfy the requirements customers to market and sell products granted in Section 4.22);
(ix) permit (A) either Company (other than to satisfy the requirements in Section 4.22) to incur, assume or become liable for any Indebtedness of the type referenced in clauses (a) through (e) of the definition thereof or guarantee any connection with such Indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of such Company, except for prepayable indebtedness for borrowed money incurred sales in the ordinary course Ordinary Course of business consistent with past practice for working capital purposes, not to exceed $3,000,000 in the aggregateBusiness); or (Biii) any of its assets or properties to become subject to a Lien (other than a Permitted Lien);
(x) forgive, compromise, satisfy, pay, discharge, settle or cancel satisfy any third-party indebtedness owed to Assumed Liabilities other than in the Business or the Companies, or waive Ordinary Course of Business; (iv) enter into any claim of rights of value in favor transaction that would constitute an Assumed Liability; (v) subject any of the Business or the Companies, in each case with a value in excess of $500,000 in a single instance or $1,000,000 in the aggregate;
Acquired Assets to any Lien (xi) (A) except as set forth in the capital budget set forth in Section 4.1(a)(xi) of the Seller Disclosure Letter (the “Capex Budget”), make or authorize any capital expenditures in excess of $2,500,000 individually, or $5,000,000 in the aggregate, other than any capital expenditure (1) made or to be made from insurance proceeds for the repair and/or prevention of damage to any property of the Business, (2) necessary to repair and/or prevent damage to any property of the Business Lien incurred in the event Ordinary Course of an emergency situation or force majeure event, or Business with respect to Taxes not yet due and payable); (3) necessary to address emergency human health and safety issues; or (B) fail to make, in calendar year 2023, payments in respect of at least 100% of the capital expenditures contemplated to have been made in the relevant time periods for 2023 as contemplated by the associated project plans underlying the Capex Budget for the months prior to the Closing or, if applicable, fail to make capital expenditure payments in calendar year 2024 substantially in accordance with a capital expenditures budget for 2024 prepared by Sellers in reasonable consultation with Xxxxxx on a basis consistent with the Business’s long range plan delivered to Buyers prior to the date hereof, which budget shall be delivered to Buyers no later than December 31, 2023;
(xiivi) enter into any Contract that would have been a Material Contract (including any Lease or Insurance Policyoral agreement) had it been which, if entered into prior to the Execution Date other than in the ordinary course of business with respect date hereof would be required to any customer or supplier (provided that, subject to applicable Law, Sellers shall reasonably consult with Buyers and consider in good faith the views of Buyer on the terms thereof prior to execution);
(xiii) amend, modify, grant a waiver of any right or obligation under, terminate or fail to renew any Material Contract (for the avoidance of doubt, the renewal of a Material Contract upon the expiration of such contract on terms that are substantially consistent with, or more favorable than, the Material Contract it is replacing shall be permitted hereunder);
(xiv) enter into any Commingled Contracts;
(xv) enter into any new line of business or abandon or discontinue any existing line of business;
(xvi) make any changes with respect to its accounting policies or procedures, except as (y) may be initiated by Seller Parent with respect to Seller Parent’s business generally (provided that such change is not implemented to, or intended to, specifically affect the accounting policies or procedures of the Business) or (z) required by changes in Law or GAAP;
(xvii) make any changes in its policies or general practices with respect to cash management, management of Inventory, the payment of accounts payable or accrued expenses or the issuance of invoices or the collection of the accounts receivable or other receivables, including the acceleration or deferral of the payment or collection thereof or failure to properly categorize Inventory, in each case, other than (i) in the ordinary course of business, (ii) pursuant to Contracts to which a Company is a party that are in effect as of the Execution Date or (iii) to satisfy the requirements in Section 4.22;
(xviii) settle any Action other than any settlement in the ordinary course of business for an amount not in excess of $3,000,000 in the aggregate that does not involve non-monetary relief;
(xix) (A) file any amended material Tax Return, (B) make or change any material Tax election, (C) agree to any material adjustment of any Tax attribute, (D) surrender any material right or claim to a refund of Taxes, (E) consent to any extension or waiver of the statute of limitations period applicable to any material Taxes, (F) enter into any closing agreement with respect to material Taxes, (G) settle or compromise any material Tax liability, or (H) jeopardize the validity of the CIT/TT Fiscal Unity, it being understood that any filing of a Tax Return or other measures required for the termination and settlement of the domination and profit and loss transfer agreement entered into between BOG and BOG Seller 1 (“DPLTA”) (including effecting (pre)payments in cash or as non-cash payments, as the case may be) shall be as set forth in Section 4.22(c) and in Section 4.22(c) of the Seller Disclosure Letter and, thereby, the fiscal unity for corporate income Tax and trade Tax purposes between BOG as controlled company and the BOG Seller 1 as controlling company (the “CIT/TT Fiscal Unity”) as of the Closing shall be permitted;
(xx) other than (i) as may be required by any Benefit Plan, or (ii) in connection with any action that applies uniformly to Business Employees and all other similarly situated employees of Sellers and their Affiliates, (A) promise, announce or grant to any Business Employee or Service Provider any material increase in compensation or benefits, including, without limitation, severance or termination pay, other than such increases in compensation or benefits (but not severance or termination pay) as are in the ordinary course of business, as to timing and amount, in connection with Sellers’ annual review of compensation, (B) as applicable to the Business Employees, adopt, establish, enter into, terminate, waive or materially amend any Benefit Plan (or any plan, policy, agreement, arrangement, program or contract that would be a Benefit Plan if in effect on the date hereof) that will be a Transferred Benefit Plan as of the Closing Date, (C) take any action to accelerate the timing of payment, vesting or funding of any compensation or benefits, payable or to become payable to any Business Employee, Former Business Employees or Service Provider, (D) transfer any Business Employee out of the Business or transfer any employee of Sellers that is not a Business Employee as of the Execution Date into either of the Companies, (E) hire or engage any Person to become a Business Employee or Service Provider, other than hiring an individual, in the ordinary course of business consistent with past practice, or to fill a position, in each case, with an annual base salary of less than $150,000, or (F) terminate (other than for cause, as determined by the Sellers and the Companies in the ordinary course of business consistent with past practice) any Key Employee;
(xxi) (i) amend, modify, negotiate, adopt, enter into, extend, renew or terminate any Labor Agreement, (ii) recognize or certify any labor organization, works council, labor union or group of employees of any of the Companies as the bargaining representative for any employees of the Companies or (iii) engage in or announce any employee layoffs, furloughs, reductions in force, reductions in compensation, hours or benefits, work schedule changes or similar actions that could implicate the WARN Act;
(xxii) permit any Material Permits to lapse or be cancelled (other than to the extent the applicable Material Permit becomes obsolete, redundant or no longer required by or advisable under applicable LawSchedule 4.6(a);
(xxiii) except as may be initiated by Seller Parent with respect to Seller Parent’s groupwide insurance policies (provided that such lapse or cancellation is not initiated to, or intended to, specifically affect the coverage available under such insurance policies relating to the Business), permit any insurance policy relating to the Business, the Companies (or their respective assets, properties, rights or liabilities), the Transferred Assets or the Assumed Liabilities to lapse or be cancelled; or (xxivvii) agreecommit or agree (whether or not such Contract, authorize commitment or commit agreement is legally binding) to do do, or authorize, any of the foregoing with respect to the conduct of the Businessactions.
(b) Notwithstanding anything to the contrary in Section 4.1 (but without limiting Section 4.1(a)(B) above), none of Sellers, the Companies and any of their respective Affiliates shall be prevented from undertaking, or be required to obtain Buyers’ consent with respect to, the following actions and inactions:
(i) any action or inaction in connection with any action or inaction required by Law or by any quarantine, “shelter in place,” “stay at home,” workforce reduction, social distancing, shutdown, closure, sequester, or any other similar Law or Order by any Governmental Entity in connection with or in response to COVID-19 (“COVID-19 Measures”) or required or requested by any Governmental Entity in connection with or in response to COVID-19 (provided that, to the extent reasonably practicable and permitted by applicable Law, Sellers shall promptly notify Buyers of any such action or inaction if it would otherwise violate Section 4.1(a)); and
(ii) any action or inaction required or reasonably necessary to (x) protect the health and safety of the Business’ employees, customers or suppliers and other individuals having business dealings with the Business in connection with COVID-19 or (y) respond to service disruptions caused by COVID-19 or any COVID-19 Measures, in each case to the extent reasonably consistent with actions that have been taken or not taken by Sellers or its Affiliates in connection therewith prior to the date hereof (provided that, to the extent reasonably practicable and permitted by applicable Law, Sellers shall promptly notify Buyers of any such action or inaction if it would otherwise violate Section 4.1(a)).
(c) Without limiting Section 4.1(a)(B)(xi) hereof, from the Execution Date until the earlier of the Closing and the termination of this Agreement in accordance with its terms, Sellers shall, and shall cause their Affiliates to use commercially reasonably efforts to take the actions set forth on Section 4.1(c)
Appears in 1 contract
Samples: Intellectual Property Purchase Agreement (Vince Holding Corp.)
Interim Operations of the Business. (a) From the Execution Date until the earlier of the Closing and the termination of Except as otherwise contemplated by this Agreement in accordance with its termsAgreement, except (i) as set forth in Section 4.1(a) of the Seller Disclosure Letter, (ii) as otherwise required by this Agreement (including the Pre-Closing Reorganization), (iii) as required by an Order or applicable Lawon Schedule 7.1, or with the prior written approval of Buyer (iv) as approved by Buyers in writing (such approval not to be unreasonably withheld or delayed solely with respect to any actions that would have been required to be disclosed in Sections 4.1(a)(B)(i)-(vii) or (xi)-(xxiv) of the Seller Disclosure Letterdelayed), Sellers shallSeller covenants that until the Closing, Seller will continue to operate the Business in the ordinary course consistent with past practices, and shall cause the Companies and their Affiliates (as applicable) to use commercially reasonable efforts to (A) (w) conduct maintain and preserve intact the Business and its relationships with suppliers, customers, employees and others having business relationships with the Business. Until the Closing, Seller shall not, without the prior written approval of Buyer (not to be unreasonably withheld or delayed), and except as contemplated by this Agreement, take any of the following actions:
(a) sell, transfer, or otherwise dispose of any Asset, other than the sale of inventory or other assets in the ordinary course of business consistent with past practices, or fail to maintain in good repair and condition any material Asset, ordinary wear and tear excepted, it being acknowledged and agreed by Seller that in the event of any casualty, loss or damage to any material Asset prior to Closing, Seller shall either repair or replace such Asset with assets of comparable quality or transfer to Buyer at Closing the proceeds of any insurance recovery (or the right to such proceeds) with respect thereto;
(b) modify, amend (other than such amendments that are immaterial or ministerial) or terminate any Material Agreement or fail to pay, perform and discharge all of its material obligations under the Material Agreements, other than in the ordinary course of business;
(c) enter into any new Guarantees other than replacement Guarantees on substantially the same or better terms as the existing Guaranty;
(d) enter into any transaction, contract, lease, commitment or other arrangement in respect of the Business or the Assets (i) involving amounts greater than $200,000 (excluding customer sales and commitments related to customer sales and purchases of inventory, products, supplies, licenses and services, in each case in the ordinary course of business consistent with past practice, (x) maintain and preserve the Business’s relationships and good will with customers, suppliers and others having business dealings with the Business, (y) not renew any Commingled Contracts that may be identified with any effect that would be inconsistent with Sellers’ obligations with respect thereto under Section 4.20(a), (zii) maintain and operate the Owned Real Property and Transferred Assets involving amounts (other than capital expenditures) greater than $300,000 and, if related to a renewal or replacement, involving a greater than 5% increase in the ordinary course in all material respects, and (B) not, and shall cause each of its Affiliates not to, in each case price or fees with respect to the Business:
(i) adopt any change in either Company’s Organizational Documents or create any Subsidiary purchases of a Company;
(ii) declareproducts, set asidesupplies, make or pay a non-cash dividend onlicenses and services, or make (iii) involving capital expenditures by Seller in any other non-cash distribution month exceeding 115% of the aggregate capital expenditures made by Seller in respect of the equity interests of either Company Business during the period from December 1, 2008 through November 30, 2009, divided by twelve (provided 12); provided, however, that any payment or prepayment (Vorabgewinnabführung / Vorabverlustausgleich) under and in accordance with the DPLTA shall be permitted, whether effected in cash or as non-cash payment);
(iii) merge or consolidate either Company with any other Person, or restructure, reorganize, dissolve or completely or partially liquidate either Company or adopt any plan of restructuring, reorganization, dissolution, liquidation or plan of merger, amalgamation or consolidation or otherwise enter into any agreements or arrangements imposing material changes or restrictions on either Company’s or the Business’s assets, operations or businesses;
(iv) (A) permit either Company or the Business to acquire any business or Person, by merger or consolidation, purchase of substantially all assets, properties, rights of, or equity or debt interests or by any other manner, in each case, in any transaction or series of related transactions or (B) enter into any new joint venture, strategic alliance, partnership or similar venture;
(v) other than sales of Inventory pursuant to Contracts with customers to which a Company is a party that are in effect as of the Execution Date, transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, subject to a Lien (other than a Permitted Lien), abandon or allow to lapse or expire or otherwise dispose of any material assets, properties, licenses, operations, rights, product lines, businesses or interests therein used or held for use by the Business or the Companies in connection with the Business, except for (A) sales or other dispositions of obsolete assets in the ordinary course of business consistent with past practice, (B) sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $3,000,000 in the aggregate, or (C) non-exclusive licenses or similar rights granted with respect to Intellectual Property Rights in the ordinary course of business consistent with past practice, provided that, for the avoidance of doubt, the foregoing this clause (vc) shall not apply to the abandonment or allowing to lapse or expire any Intellectual Property Rights other than Intellectual Property Rights that are material to the Businesswhere Liabilities under such a transaction, including the Transferred Intellectual Property;
(vi) issuecontract, selllease, pledge, dispose of, grant, transfer, encumber, subject to a Lien or authorize the issuance, sale, pledge, disposition, grant, transfer, granting of a security interest in, or encumbrance of, any equity interests of either Company, or securities convertible or exchangeable into or exercisable for any shares of such equity interests, or any options, warrants commitment or other rights of any kind to acquire any such equity interests;arrangement are Excluded Liabilities.
(vii) recapitalize, reclassify, distribute, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of the equity interests of either Company;
(viii) permit either Company or the Business to make any loans, advances, guarantees or capital contributions to or investments in any Person (other than to satisfy the requirements in Section 4.22);
(ix) permit (A) either Company (other than to satisfy the requirements in Section 4.22) to incur, assume or become liable for any Indebtedness of the type referenced in clauses (a) through (e) grant any material increase in or commit to any material increase in the compensation or benefits of any officer or employee (or hire any new officer or employee) who would constitute a Business Employee on the definition thereof or guarantee any such Indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of such Company, date hereof (except for prepayable indebtedness for borrowed money incurred increases or new hires in the ordinary course of business consistent with past practice for working capital purposes, not or pursuant to exceed $3,000,000 in the aggregate; existing employment arrangements or (B) any of its assets or properties hiring budgets that have been furnished to become subject to a Lien (other than a Permitted LienBuyer);
(xf) forgiveencumber by Lien or otherwise, compromiseor grant any security interest in or to, satisfyany Asset, pay, discharge, settle except for Permitted Liens;
(g) enter into any union contract or cancel collective bargaining agreement with respect to any third-party indebtedness owed to of the Business Employees;
(h) use the Business or the CompaniesAssets in respect of a guarantee, surety or waive any claim of rights of value in favor endorsement of the Business or the Companies, in each case with a value in excess Liability of $500,000 in a single instance or $1,000,000 in the aggregateany other Person;
(xii) (A) except as set forth in the capital budget set forth in Section 4.1(a)(xi) cancel or compromise any material debt or claim or waive or release any material right of the Seller Disclosure Letter (the “Capex Budget”), make or authorize any capital expenditures in excess of $2,500,000 individually, or $5,000,000 in the aggregate, other than any capital expenditure (1) made or related primarily to be made from insurance proceeds for the repair and/or prevention of damage to any property of the Business, (2) necessary to repair and/or prevent damage to any property of the Business in the event of an emergency situation except for debts, claims or force majeure event, rights that are Excluded Assets or (3) necessary to address emergency human health and safety issues; or (B) fail to make, in calendar year 2023, payments in respect of at least 100% of the capital expenditures contemplated to have been made in the relevant time periods for 2023 as contemplated by the associated project plans underlying the Capex Budget for the months prior to the Closing or, if applicable, fail to make capital expenditure payments in calendar year 2024 substantially in accordance with a capital expenditures budget for 2024 prepared by Sellers in reasonable consultation with Xxxxxx on a basis consistent with the Business’s long range plan delivered to Buyers prior to the date hereof, which budget shall be delivered to Buyers no later than December 31, 2023Excluded Liabilities;
(xiij) change in any material respect the Seller Accounting Principals; or
(k) enter into any Contract that would have been a Material Contract (including any Lease or Insurance Policy) had it been entered into prior to the Execution Date other than in the ordinary course of business with respect to any customer or supplier (provided that, subject to applicable Law, Sellers shall reasonably consult with Buyers and consider in good faith the views of Buyer on the terms thereof prior to execution);
(xiii) amend, modify, grant a waiver of any right or obligation under, terminate or fail to renew any Material Contract (for the avoidance of doubt, the renewal of a Material Contract upon the expiration of such contract on terms that are substantially consistent with, or more favorable than, the Material Contract it is replacing shall be permitted hereunder);
(xiv) enter into any Commingled Contracts;
(xv) enter into any new line of business or abandon or discontinue any existing line of business;
(xvi) make any changes with respect to its accounting policies or procedures, except as (y) may be initiated by Seller Parent with respect to Seller Parent’s business generally (provided that such change is not implemented to, or intended to, specifically affect the accounting policies or procedures of the Business) or (z) required by changes in Law or GAAP;
(xvii) make any changes in its policies or general practices with respect to cash management, management of Inventory, the payment of accounts payable or accrued expenses or the issuance of invoices or the collection of the accounts receivable or other receivables, including the acceleration or deferral of the payment or collection thereof or failure to properly categorize Inventory, in each case, other than (i) in the ordinary course of business, (ii) pursuant to Contracts to which a Company is a party that are in effect as of the Execution Date or (iii) to satisfy the requirements in Section 4.22;
(xviii) settle any Action other than any settlement in the ordinary course of business for an amount not in excess of $3,000,000 in the aggregate that does not involve non-monetary relief;
(xix) (A) file any amended material Tax Return, (B) make or change any material Tax election, (C) agree to any material adjustment of any Tax attribute, (D) surrender any material right or claim to a refund of Taxes, (E) consent to any extension or waiver of the statute of limitations period applicable to any material Taxes, (F) enter into any closing agreement with respect to material Taxes, (G) settle or compromise any material Tax liability, or (H) jeopardize the validity of the CIT/TT Fiscal Unity, it being understood that any filing of a Tax Return or other measures required for the termination and settlement of the domination and profit and loss transfer agreement entered into between BOG and BOG Seller 1 (“DPLTA”) (including effecting (pre)payments in cash or as non-cash payments, as the case may be) shall be as set forth in Section 4.22(c) and in Section 4.22(c) of the Seller Disclosure Letter and, thereby, the fiscal unity for corporate income Tax and trade Tax purposes between BOG as controlled company and the BOG Seller 1 as controlling company (the “CIT/TT Fiscal Unity”) as of the Closing shall be permitted;
(xx) other than (i) as may be required by any Benefit Plan, or (ii) in connection with any action that applies uniformly to Business Employees and all other similarly situated employees of Sellers and their Affiliates, (A) promise, announce or grant to any Business Employee or Service Provider any material increase in compensation or benefits, including, without limitation, severance or termination pay, other than such increases in compensation or benefits (but not severance or termination pay) as are in the ordinary course of business, as to timing and amount, in connection with Sellers’ annual review of compensation, (B) as applicable to the Business Employees, adopt, establish, enter into, terminate, waive or materially amend any Benefit Plan (or any plan, policy, agreement, arrangementcontract, program commitment or contract that would be a Benefit Plan if in effect on the date hereof) that will be a Transferred Benefit Plan as of the Closing Date, (C) take any action to accelerate the timing of payment, vesting or funding of any compensation or benefits, payable or to become payable to any Business Employee, Former Business Employees or Service Provider, (D) transfer any Business Employee out of the Business or transfer any employee of Sellers that is not a Business Employee as of the Execution Date into either of the Companies, (E) hire or engage any Person to become a Business Employee or Service Provider, other than hiring an individual, in the ordinary course of business consistent with past practice, or to fill a position, in each case, with an annual base salary of less than $150,000, or (F) terminate (other than for cause, as determined by the Sellers and the Companies in the ordinary course of business consistent with past practice) any Key Employee;
(xxi) (i) amend, modify, negotiate, adopt, enter into, extend, renew or terminate any Labor Agreement, (ii) recognize or certify any labor organization, works council, labor union or group of employees of any of the Companies as the bargaining representative for any employees of the Companies or (iii) engage in or announce any employee layoffs, furloughs, reductions in force, reductions in compensation, hours or benefits, work schedule changes or similar actions that could implicate the WARN Act;
(xxii) permit any Material Permits to lapse or be cancelled (other than to the extent the applicable Material Permit becomes obsolete, redundant or no longer required by or advisable under applicable Law);
(xxiii) except as may be initiated by Seller Parent with respect to Seller Parent’s groupwide insurance policies (provided that such lapse or cancellation is not initiated to, or intended to, specifically affect the coverage available under such insurance policies relating to the Business), permit any insurance policy relating to the Business, the Companies (or their respective assets, properties, rights or liabilities), the Transferred Assets or the Assumed Liabilities to lapse or be cancelled; or (xxiv) agree, authorize or commit arrangement to do any of the foregoing with respect to the conduct foregoing, or authorize any of the Businessforegoing.
(b) Notwithstanding anything to the contrary in Section 4.1 (but without limiting Section 4.1(a)(B) above), none of Sellers, the Companies and any of their respective Affiliates shall be prevented from undertaking, or be required to obtain Buyers’ consent with respect to, the following actions and inactions:
(i) any action or inaction in connection with any action or inaction required by Law or by any quarantine, “shelter in place,” “stay at home,” workforce reduction, social distancing, shutdown, closure, sequester, or any other similar Law or Order by any Governmental Entity in connection with or in response to COVID-19 (“COVID-19 Measures”) or required or requested by any Governmental Entity in connection with or in response to COVID-19 (provided that, to the extent reasonably practicable and permitted by applicable Law, Sellers shall promptly notify Buyers of any such action or inaction if it would otherwise violate Section 4.1(a)); and
(ii) any action or inaction required or reasonably necessary to (x) protect the health and safety of the Business’ employees, customers or suppliers and other individuals having business dealings with the Business in connection with COVID-19 or (y) respond to service disruptions caused by COVID-19 or any COVID-19 Measures, in each case to the extent reasonably consistent with actions that have been taken or not taken by Sellers or its Affiliates in connection therewith prior to the date hereof (provided that, to the extent reasonably practicable and permitted by applicable Law, Sellers shall promptly notify Buyers of any such action or inaction if it would otherwise violate Section 4.1(a)).
(c) Without limiting Section 4.1(a)(B)(xi) hereof, from the Execution Date until the earlier of the Closing and the termination of this Agreement in accordance with its terms, Sellers shall, and shall cause their Affiliates to use commercially reasonably efforts to take the actions set forth on Section 4.1(c)
Appears in 1 contract
Interim Operations of the Business. (a) From During the Execution Date until period from the earlier of the Closing and the termination date of this Agreement in accordance with its termsuntil the Closing, except to the extent (iw) as set forth expressly contemplated by or reasonably required to effect the Contribution, (x) described in Section 4.1(a) Schedule 5.1 of the Seller Disclosure LetterLetter or otherwise expressly contemplated by this Agreement, or reasonably required for Buyer to perform its obligations hereunder, (iiy) as otherwise required by Seller reasonably determines in consultation with its outside counsel that compliance with any restriction set forth in this Agreement (including the Pre-Closing Reorganization), (iii) as required by an Order or Section 5.1 would violate applicable Law, or (ivz) as approved by Buyers Buyer approves such actions in writing (such approval not to be unreasonably withheld withheld, conditioned or delayed solely with respect to any actions that would have been required to be disclosed in Sections 4.1(a)(B)(i)-(vii) or (xi)-(xxiv) of the Seller Disclosure Letterdelayed), Sellers shall, Seller and its Subsidiaries shall cause the Companies and their Affiliates (as applicable) to use commercially reasonable efforts to (A) (w) conduct the Business in the ordinary course of business and, to the extent consistent with past practicetherewith, (x) maintain Seller and its Subsidiaries shall use their respective commercially reasonable efforts to preserve intact the Business’s business organizations, operations, assets, goodwill and existing relationships and good will with customers, suppliers suppliers, creditors, licensors, lessors and others having business dealings with the Business, (y) not renew any Commingled Contracts that may be identified with any effect that would be inconsistent with Sellers’ obligations with respect thereto under Section 4.20(a), (z) maintain and operate the Owned Real Property and Transferred Assets in the ordinary course in all material respects, and (B) not, and shall cause each of its Affiliates not toemployees, in each case with respect to the extent Related to the Business. Without limiting the generality of, and in furtherance of, the foregoing, during the period from the date of this Agreement until the Closing, except to the extent (1) expressly contemplated by or reasonably required to effect the Contribution, (2) described in Schedule 5.1 of the Seller Disclosure Letter or otherwise expressly contemplated by this Agreement, or reasonably required for Buyer to perform its obligations hereunder, or (3) Buyer approves such actions in writing (such approval not to be unreasonably withheld, conditioned or delayed), Seller shall not and shall not permit its Subsidiaries to:
(ia) adopt any change in either Company’s amend the Organizational Documents or create any Subsidiary of a the Company;
(iib) declare, set aside, make amend or pay a non-cash dividend onwaive any obligation or other provision under, or make any other non-cash distribution terminate, the Contribution and Assumption Agreement, including the Ancillary Agreements entered into in respect of the equity interests of either Company (provided that any payment or prepayment (Vorabgewinnabführung / Vorabverlustausgleich) under and in accordance with the DPLTA shall be permitted, whether effected in cash or as non-cash payment)connection therewith;
(iiic) merge or consolidate either Company with any other Personissue, or restructure, reorganize, dissolve or completely or partially liquidate either Company or adopt any plan of restructuring, reorganization, dissolution, liquidation or plan of merger, amalgamation or consolidation or otherwise enter into any agreements or arrangements imposing material changes or restrictions on either Company’s or the Business’s assets, operations or businesses;
(iv) (A) permit either Company or the Business to acquire any business or Person, by merger or consolidation, purchase of substantially all assets, properties, rights of, or equity or debt interests or by any other manner, in each case, in any transaction or series of related transactions or (B) enter into any new joint venture, strategic alliance, partnership or similar venture;
(v) other than sales of Inventory pursuant to Contracts with customers to which a Company is a party that are in effect as of the Execution Dateassign, transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, subject to a Lien (other than a Permitted Lien), abandon or allow to lapse or expire or otherwise dispose of any material assets, properties, licenses, operations, rights, product lines, businesses or interests therein used or held for use by the Business or the Companies in connection with the Business, except for (A) sales or other dispositions of obsolete assets in the ordinary course of business consistent with past practice, (B) sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $3,000,000 in the aggregate, or (C) non-exclusive licenses or similar rights granted with respect to Intellectual Property Rights in the ordinary course of business consistent with past practice, provided that, for the avoidance of doubt, the foregoing clause (v) shall not apply to the abandonment or allowing to lapse or expire any Intellectual Property Rights other than Intellectual Property Rights that are material to the Business, including the Transferred Intellectual Property;
(vi) issue, sell, pledge, dispose of, grantredeem, transferacquire or encumber any Company Units or any Equity Interests of the Company or any Directly Transferred Assets, encumberother than, subject with respect to a Lien inventory or authorize the issuancepersonal property constituting Directly Transferred Assets, salesales, pledgetransfers, disposition, grant, transfer, granting of a security interest in, dispositions or encumbrance of, any equity interests of either Company, or securities convertible or exchangeable into or exercisable for any shares acquisitions of such equity interests, inventory (or any options, warrants components thereof) or other rights of any kind to acquire any such equity interests;
(vii) recapitalize, reclassify, distribute, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of the equity interests of either Company;
(viii) permit either Company or the Business to make any loans, advances, guarantees or capital contributions to or investments in any Person (other than to satisfy the requirements in Section 4.22);
(ix) permit (A) either Company (other than to satisfy the requirements in Section 4.22) to incur, assume or become liable for any Indebtedness of the type referenced in clauses (a) through (e) of the definition thereof or guarantee any such Indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of such Company, except for prepayable indebtedness for borrowed money incurred personal property in the ordinary course of business consistent with past practice for working capital purposesbusiness;
(d) adopt a plan of complete or partial liquidation or authorize or undertake a dissolution, not consolidation, restructuring, recapitalization or other reorganization, to exceed $3,000,000 in the aggregate; or (B) extent it would affect any of its the assets or properties to become subject to a Lien (other than a Permitted Lien)of the Business;
(x) forgive, compromise, satisfy, pay, discharge, settle or cancel any third-party indebtedness owed to the Business or the Companies, or waive any claim of rights of value in favor of the Business or the Companies, in each case with a value in excess of $500,000 in a single instance or $1,000,000 in the aggregate;
(xi) (A) except as set forth in the capital budget set forth in Section 4.1(a)(xi) of the Seller Disclosure Letter (the “Capex Budget”), make or authorize any capital expenditures in excess of $2,500,000 individually, or $5,000,000 in the aggregate, other than any capital expenditure (1) made or to be made from insurance proceeds for the repair and/or prevention of damage to any property of the Business, (2) necessary to repair and/or prevent damage to any property of the Business in the event of an emergency situation or force majeure event, or (3) necessary to address emergency human health and safety issues; or (B) fail to make, in calendar year 2023, payments in respect of at least 100% of the capital expenditures contemplated to have been made in the relevant time periods for 2023 as contemplated by the associated project plans underlying the Capex Budget for the months prior to the Closing or, if applicable, fail to make capital expenditure payments in calendar year 2024 substantially in accordance with a capital expenditures budget for 2024 prepared by Sellers in reasonable consultation with Xxxxxx on a basis consistent with the Business’s long range plan delivered to Buyers prior to the date hereof, which budget shall be delivered to Buyers no later than December 31, 2023;
(xiie) enter into any Contract that would have been a Material Contract (including any Lease or Insurance Policy) had it been entered into prior to the Execution Date this Agreement, other than in the ordinary course of business with respect to any customer or supplier (provided that, subject to applicable Law, Sellers shall reasonably consult with Buyers and consider in good faith the views of Buyer on the terms thereof prior to execution)business;
(xiiif) amend, modify, grant a waiver terminate or enter into any material amendment of any right Material Contract, other than any amendment entered into in the ordinary course of business that does not impose material additional costs or obligation under, terminate or fail to renew any Material Contract (for obligations on the avoidance of doubt, the renewal of a Material Contract upon the expiration of such contract on terms that are substantially consistent with, or more favorable than, the Material Contract it is replacing shall be permitted hereunder)Company;
(xivg) enter into transfer, sell, dispose of or encumber any Commingled Contracts;
(xv) enter into any new line material portion of business or abandon or discontinue any existing line its assets Related to the Business, other than sales of inventory in the ordinary course of business;
(xvih) transfer, sell, assign, license, abandon, fail to maintain, dedicate to the public, permit to lapse or otherwise dispose of any Intellectual Property material to the Business, other than non-exclusive licenses granted to third parties under Intellectual Property in the ordinary course of business;
(i) permit or cause the Company to incur any indebtedness for borrowed money, issue any debt securities or guarantee or endorse the obligations of any Person;
(j) acquire (by merger, consolidation or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof or any equity interest therein that would be Related to the Business;
(k) make any changes with respect to its material change in any method of accounting policies or proceduresaccounting practice or policy, except as (y) may be initiated by Seller Parent with respect to Seller Parent’s business generally (provided that such change is not implemented to, or intended to, specifically affect the accounting policies or procedures of the Business) or (z) required by changes in applicable Law or GAAP;
(xviil) make commence any changes material Action involving the assets or properties Related to the Business;
(m) compromise, cancel or settle any Action or enter into any consent decree or settlement agreement Related to the Business, except where (i) the amount paid settlement is less than $250,000 individually or $1,000,000 in its policies the aggregate and (ii) such settlement would not reasonably be expected to materially and adversely affect the conduct of the Business as currently conducted;
(n) assume or general practices enter into any labor or collective bargaining agreement relating to the Business or with respect to cash managementthe Business Employees;
(o) except as required pursuant to the terms of any Benefit Plan in effect as of the date of this Agreement and made available to Buyer or as otherwise required by applicable Law, management (i) increase in any manner the compensation or benefits, or severance or termination pay of Inventoryany Business Employee, except for (A) Business Employees who are not officers, increases in annual salary or wage rate in the ordinary course of business that do not exceed 2% individually and (B) the payment of accounts payable or accrued expenses or the issuance of invoices or the collection of the accounts receivable or other receivables, including the acceleration or deferral of the payment or collection thereof or failure to properly categorize Inventory, in each case, other than (i) annual bonuses for completed periods based on actual performance in the ordinary course of business, (ii) pursuant to Contracts to which a Company is become a party to, establish, adopt, amend, commence participation in or terminate any Benefit Plan in which any Business Employee would be eligible to participate, or any arrangement that are in effect as of the Execution Date or would have been such a Benefit Plan had it been entered into prior to this Agreement, (iii) to satisfy grant any new awards to, or amend or modify the requirements in Section 4.22;
terms of any outstanding awards held by, Business Employees under any Benefit Plan or (xviii) settle any Action other than any settlement in the ordinary course of business for an amount not in excess of $3,000,000 in the aggregate that does not involve non-monetary relief;
(xixiv) (A) file alter the position or duties of any amended material Tax Return, employee of Seller or its Subsidiaries who is not a Business Employee so that the employee’s services become exclusively dedicated to the Business or (B) make alter the position or duties of any Business Employee in such a way that would cause the Business Employee’s services to become primarily dedicated to a business other than the Business;
(p) make, change or revoke any material Tax election, (C) agree ; change any annual Tax accounting period; adopt or change any accounting method with respect to Taxes; file any material adjustment of amended Tax Return; enter into any closing agreement with respect to Taxes; settle or compromise any Tax attribute, (D) surrender any material right claim or claim to a refund of Taxes, (E) assessment; or consent to any extension or waiver of the statute of limitations limitation period applicable to any material Taxes, (F) enter into any closing agreement claim or assessment with respect to material Taxes, (G) settle or compromise any material Tax liability, or (H) jeopardize the validity of the CIT/TT Fiscal Unity, it being understood that any filing of a Tax Return or other measures required for the termination and settlement of the domination and profit and loss transfer agreement entered into between BOG and BOG Seller 1 (“DPLTA”) (including effecting (pre)payments in cash or as non-cash payments, as the case may be) shall be as set forth in Section 4.22(c) and in Section 4.22(c) of the Seller Disclosure Letter and, thereby, the fiscal unity for corporate income Tax and trade Tax purposes between BOG as controlled company and the BOG Seller 1 as controlling company (the “CIT/TT Fiscal Unity”) as of the Closing shall be permitted;
(xx) other than (i) as may be required by any Benefit Plan, or (ii) in connection with any action that applies uniformly to Business Employees and all other similarly situated employees of Sellers and their Affiliates, (A) promise, announce or grant to any Business Employee or Service Provider any material increase in compensation or benefits, including, without limitation, severance or termination pay, other than such increases in compensation or benefits (but not severance or termination pay) as are in the ordinary course of business, as to timing and amount, in connection with Sellers’ annual review of compensation, (B) as applicable to the Business Employees, adopt, establish, enter into, terminate, waive or materially amend any Benefit Plan (or any plan, policy, agreement, arrangement, program or contract that would be a Benefit Plan if in effect on the date hereof) that will be a Transferred Benefit Plan as of the Closing Date, (C) take any action to accelerate the timing of payment, vesting or funding of any compensation or benefits, payable or to become payable to any Business Employee, Former Business Employees or Service Provider, (D) transfer any Business Employee out of the Business or transfer any employee of Sellers that is not a Business Employee as of the Execution Date into either of the Companies, (E) hire or engage any Person to become a Business Employee or Service Provider, other than hiring an individual, in the ordinary course of business consistent with past practice, or to fill a position, ; in each case, with an annual base salary that is of less than $150,000, or (F) terminate (other than for cause, as determined by the Sellers Company or Related to the Business and the Companies in the ordinary course of business consistent with past practice) any Key Employee;
(xxi) (i) amend, modify, negotiate, adopt, enter into, extend, renew or terminate any Labor Agreement, (ii) recognize or certify any labor organization, works council, labor union or group of employees of any of the Companies as the bargaining representative for any employees of the Companies or (iii) engage in or announce any employee layoffs, furloughs, reductions in force, reductions in compensation, hours or benefits, work schedule changes or similar actions that could implicate the WARN Act;
(xxii) permit any Material Permits to lapse or be cancelled (other than only to the extent the applicable Material Permit becomes obsolete, redundant or no longer required by or advisable under applicable Law);
(xxiii) except as may such action could reasonably be initiated by Seller Parent with respect expected to Seller Parent’s groupwide insurance policies (provided that such lapse or cancellation is not initiated to, or intended to, specifically adversely affect the coverage available under such insurance policies relating to the Business)Company, permit any insurance policy relating to the Business, the Companies (or their respective assets, properties, rights or liabilities)Contributed Assets, the Directly Transferred Assets or Buyer and its Affiliates in a Post-Closing Tax Period; provided, however, the Assumed Liabilities foregoing shall not apply to lapse any activities related to the establishment of a designated bank account for the Business or be cancelledthe Company or any associated Tax filings as required by applicable Law; or or
(xxivq) agree, authorize or commit to do any of the foregoing with respect to the conduct of the Businessforegoing.
(b) Notwithstanding anything to the contrary in Section 4.1 (but without limiting Section 4.1(a)(B) above), none of Sellers, the Companies and any of their respective Affiliates shall be prevented from undertaking, or be required to obtain Buyers’ consent with respect to, the following actions and inactions:
(i) any action or inaction in connection with any action or inaction required by Law or by any quarantine, “shelter in place,” “stay at home,” workforce reduction, social distancing, shutdown, closure, sequester, or any other similar Law or Order by any Governmental Entity in connection with or in response to COVID-19 (“COVID-19 Measures”) or required or requested by any Governmental Entity in connection with or in response to COVID-19 (provided that, to the extent reasonably practicable and permitted by applicable Law, Sellers shall promptly notify Buyers of any such action or inaction if it would otherwise violate Section 4.1(a)); and
(ii) any action or inaction required or reasonably necessary to (x) protect the health and safety of the Business’ employees, customers or suppliers and other individuals having business dealings with the Business in connection with COVID-19 or (y) respond to service disruptions caused by COVID-19 or any COVID-19 Measures, in each case to the extent reasonably consistent with actions that have been taken or not taken by Sellers or its Affiliates in connection therewith prior to the date hereof (provided that, to the extent reasonably practicable and permitted by applicable Law, Sellers shall promptly notify Buyers of any such action or inaction if it would otherwise violate Section 4.1(a)).
(c) Without limiting Section 4.1(a)(B)(xi) hereof, from the Execution Date until the earlier of the Closing and the termination of this Agreement in accordance with its terms, Sellers shall, and shall cause their Affiliates to use commercially reasonably efforts to take the actions set forth on Section 4.1(c)
Appears in 1 contract
Interim Operations of the Business. (a) From During the period from the Execution Date until the earlier of the Closing and the valid termination of this Agreement in accordance with its terms, except (i) as set forth in Section 4.1(a) 5.1 of the Seller Disclosure Letter, (ii) as required or otherwise required contemplated by this Agreement (including the Pre-Closing Reorganization)Agreement, (iii) as required by an Order or applicable Law, or (iv) as approved by Buyers Buyer in writing (such approval not to be unreasonably withheld withheld, conditioned or delayed solely with respect to any actions that would have been required to be disclosed in Sections 4.1(a)(B)(i)-(vii) or (xi)-(xxiv) of the Seller Disclosure Letterdelayed), Sellers shall, and shall cause the Companies and their Affiliates (as applicable) to use commercially reasonable efforts to Seller (A) shall (w1) conduct the Business in the ordinary course of business Ordinary Course in all material respects and (2) use its commercially reasonable efforts to the extent consistent with past practiceclause (1), (x) maintain and to preserve the Business’s relationships Business intact and good will maintain existing relations with Governmental Entities, customers, suppliers suppliers, distributors, creditors, lessors and others having business dealings with the Businessemployees, (y) not renew any Commingled Contracts that may be identified with any effect that would be inconsistent with Sellers’ obligations with respect thereto under Section 4.20(a), (z) maintain and operate the Owned Real Property and Transferred Assets in the ordinary course each case in all material respects, and (B) shall not, and shall cause each of its Affiliates not to, in each case with respect case, solely to the Businessextent in respect of the Business and the Transferred Assets:
(i) adopt acquire any change in either Company’s Organizational Documents corporation, partnership, limited liability company, other business organization or create division thereof if any Subsidiary of a Companythe Liabilities of such organization would constitute Assumed Liabilities;
(ii) declare, set aside, make create or pay a non-cash dividend on, or make incur any Encumbrance other non-cash distribution in respect of the equity interests of either Company (provided that any payment or prepayment (Vorabgewinnabführung / Vorabverlustausgleich) under and in accordance with the DPLTA shall be permitted, whether effected in cash or as non-cash payment)than Permitted Encumbrances;
(iii) merge create, incur, assume or consolidate either Company with any other Personguarantee, or restructureallow the Business to create, reorganizeincur, dissolve assume or completely guarantee, any Indebtedness for Borrowed Money (other than any such Indebtedness for Borrowed Money that will be discharged on or partially liquidate either Company or adopt any plan of restructuring, reorganization, dissolution, liquidation or plan of merger, amalgamation or consolidation or otherwise enter into any agreements or arrangements imposing material changes or restrictions on either Company’s or prior to the Business’s assets, operations or businessesClosing) that would be an Assumed Liability;
(iv) (A) permit either Company or fail to make any material capital expenditures necessary to operate the Business to acquire any business or Person, by merger or consolidation, purchase in the Ordinary Course of substantially all assets, properties, rights of, or equity or debt interests or by any other mannerBusiness (including, in each case, in any transaction or series the timing of related transactions or (B) enter into any new joint venture, strategic alliance, partnership or similar venturesuch payments);
(v) other than sales in the Ordinary Course of Inventory pursuant Business, enter into any Contract that would have been a Material Contract had it been entered into prior to Contracts with customers to which a Company is a party that are in effect as of the Execution Date;
(vi) terminate or amend, modify, supplement or waive in a manner that is materially adverse to the Business (or assign, convey, encumber or otherwise transfer, in whole or in part, rights or interest pursuant to or in) any Material Contract, other than expirations of any such Material Contract in the Ordinary Course of Business in accordance with the terms of such Material Contract, or licenses or other grants of rights under Intellectual Property Rights in the Ordinary Course of Business (it being understood that all Material Contracts related to Indebtedness for Borrowed Money shall be governed by Section 5.1(a)(iii);
(vii) except in the Ordinary Course of Business, transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, subject to a Lien (other than a Permitted Lien), abandon or allow to lapse or expire or otherwise dispose of any material assets, properties, licenses, operations, rights, product lines, businesses or interests therein used or held for use by the Business or the Companies in connection with of the Business, except for (A) sales or other dispositions of obsolete assets in the ordinary course of business consistent with past practiceassets, (B) sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $3,000,000 in the aggregate, or (C) non-exclusive licenses or similar other non-exclusive grants of rights granted with respect to under Intellectual Property Rights in the ordinary course Ordinary Course of business consistent with past practiceBusiness and (C) abandonment, provided that, for the avoidance of doubt, the foregoing clause (v) shall not apply to the abandonment or allowing to lapse or expire any expiry of, Intellectual Property Rights other than Intellectual Property Rights that are material to in the Ordinary Course of Business, including the Transferred Intellectual Property;
(vi) issue, sell, pledge, dispose of, grant, transfer, encumber, subject to a Lien or authorize the issuance, sale, pledge, disposition, grant, transfer, granting of a security interest in, or encumbrance of, any equity interests of either Company, or securities convertible or exchangeable into or exercisable for any shares of such equity interests, or any options, warrants or other rights of any kind to acquire any such equity interests;
(vii) recapitalize, reclassify, distribute, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of the equity interests of either Company;
(viii) permit either Company except as required pursuant to the terms of any Benefit Plan in effect prior to the Execution Date or as otherwise required by applicable Law, (A) enter into or materially amend or supplement any employment, severance, termination or similar type of Contract with any Business Employee, including giving or agreeing to give any increase in the compensation or consulting fees, bonus or pension, welfare, severance or other benefits, severance or termination pay of any Business Employee, except (1) for increases in base salary or wage rate in the Ordinary Course of Business, (2) for the payment of annual bonuses for completed periods based on actual performance in the Ordinary Course of Business and (3) to make the extent permitted by Section 5.1(a)(viii)(B)(1) or Section 5.1(a)(viii)(B)(2) herein or (B) become a party to, enter into, establish, adopt, amend, supplement, commence participation in or terminate any loans, advances, guarantees Benefit Plan or capital contributions any arrangement that would have been a Benefit Plan had it been entered into prior to or investments in any Person (this Agreement other than (1) with respect to satisfy Benefit Plans in which employees of Seller and/or its Affiliates (in addition to Business Employees) generally are eligible to participate or with respect to amendments or modifications that apply to service providers of Seller and/or its Affiliates (in addition to Business Employees) generally, in each case, that are not targeted at Business Employees (except that Seller will not amend or modify any broad-based Benefit Plans that provide for the requirements in Section 4.22)payment of severance benefits to Business Employees) or (2) to conduct any annual renewal or reenrollment of health and welfare plans;
(ix) permit (A) either Company terminate the employment of any Business Employee (other than to satisfy the requirements in Section 4.22) to incur, assume for cause or become liable for any Indebtedness of the type referenced in clauses (a) through (e) of the definition thereof or guarantee any such Indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of such Company, except for prepayable indebtedness for borrowed money incurred in the ordinary course Ordinary Course of business consistent with past practice for working capital purposesBusiness), not to exceed $3,000,000 in the aggregate; or (B) hire any of its assets or properties to become subject to individual who after such hiring is a Lien (Business Employee other than (1) to replace Business Employees whose employment is terminated by Seller in accordance with this Section 5.1(a)(ix) or who resign or retire after the date of this Agreement, or (2) to fill requisitions open as of the Execution Date or to fulfill a Permitted Liencontractual obligation, in each case of clause (1) or (2) so long as such hire is made in the Ordinary Course of Business, at an annual salary or wage rate not in excess of a rate that is consistent with the Ordinary Course of Business and consistent with Seller’s existing compensation structure, and such annual salary or wage rate is not in excess of $200,000 (provided, however, Seller shall not hire any Business Employee without Buyer’s prior written consent if such employee’s compensation would be treated as an indirect cost), (C) modify the job duties of any Business Employee if such modification would result in that individual no longer being a Business Employee, or (D) modify the job duties of any employee of Seller who is not a Business Employee if such modification would result in that individual becoming a Business Employee;
(x) forgive, compromise, satisfy, pay, discharge, settle or cancel enter into any third-party indebtedness owed Contract Related to the Business for the purchase or the Companies, or waive any claim lease of rights of value in favor of the Business or the Companies, in each case with a value in excess of $500,000 in a single instance or $1,000,000 in the aggregatereal property;
(xi) (A) except as sell, license or otherwise distribute any Transferred Intellectual Property, or Seller Licensed Intellectual Property to any Person (or enter into any Contract for the sale or license of any Intellectual Property Rights of Seller with any Person), other than non-exclusive licenses granted to customers, end users, service providers or contractors entered into in the Ordinary Course of Business or, with respect to Seller Licensed Intellectual Property, licenses or distributions outside the scope of the Business that are not inconsistent with the rights granted to Buyer under this Agreement or any Ancillary Agreement, (B) purchase or license any material Intellectual Property Rights from any Person (or enter into any Contract for the purchase or license of Intellectual Property Rights with any Person) in relation to the Business, (C) enter into a Contract with respect to the development of any material Intellectual Property Rights or material products with a third party in relation to the Business or (D) change the pricing or royalties set or charged by Seller to its customers, end users or other licensees or pricing or royalties set or charged by Persons who have licensed material Intellectual Property Rights to Seller, where such pricing or royalties are Related to the Business (other than changes in pricing or royalties made in the Ordinary Course of Business);
(xii) fail to maintain any Intellectual Property Rights required to be set forth in the capital budget set forth in on Section 4.1(a)(xi) 3.15 of the Seller Disclosure Letter (or take reasonable efforts to maintain the “Capex Budget”), make or authorize confidentiality of any capital expenditures in excess of $2,500,000 individually, or $5,000,000 material Trade Secret included in the aggregate, other than any capital expenditure (1) made Transferred Intellectual Property or to be made from insurance proceeds for the repair and/or prevention of damage to any property of the Business, (2) necessary to repair and/or prevent damage to any property of the Business in the event of an emergency situation or force majeure event, or (3) necessary to address emergency human health and safety issues; or (B) fail to make, in calendar year 2023, payments in respect of at least 100% of the capital expenditures contemplated to have been made in the relevant time periods for 2023 as contemplated by the associated project plans underlying the Capex Budget for the months prior to the Closing or, if applicable, fail to make capital expenditure payments in calendar year 2024 substantially in accordance with a capital expenditures budget for 2024 prepared by Sellers in reasonable consultation with Xxxxxx on a basis consistent with the Business’s long range plan delivered to Buyers prior to the date hereof, which budget shall be delivered to Buyers no later than December 31, 2023;
(xii) enter into any Contract that would have been a Material Contract (including any Lease or Insurance Policy) had it been entered into prior to the Execution Date other than in the ordinary course of business with respect to any customer or supplier (provided that, subject to applicable Law, Sellers shall reasonably consult with Buyers and consider in good faith the views of Buyer on the terms thereof prior to execution)Seller Licensed Intellectual Property;
(xiii) amendother than in the Ordinary Course (A) make any loan, modifyadvance, grant a waiver capital contribution, guaranty or other extension of any right or obligation under, terminate or fail to renew any Material Contract (for the avoidance of doubt, the renewal of a Material Contract upon the expiration of such contract on terms that are substantially consistent withcredit to, or more favorable thaninvestment in, the Material Contract it is replacing shall be permitted hereunder)any Person which would constitute a Transferred Asset or Assumed Liability, or (B) transfer any Transferred Asset to any direct or indirect Subsidiary of Seller;
(xiv) enter into make any Commingled Contractsmaterial change in any method of financial accounting or financial accounting practice or policy applicable to the Business, other than such changes as are required by GAAP or applicable Law or are consistent with the Accounting Principles;
(xv) enter into make any new line of business or abandon or discontinue any existing line of businessmaterial Tax election;
(xvi) make amend, cancel or terminate any changes with respect material Permit Related to its accounting policies or proceduresthe Business, except as (y) may be initiated by Seller Parent with respect to Seller Parent’s business generally (provided that such change is not implemented to, or intended to, specifically affect the accounting policies or procedures of the Business) or (z) required by changes in Law or GAAPapplicable Law;
(xvii) make any changes in its policies accelerate or general practices with respect to cash management, management of Inventory, delay the payment of of, or agree to any change in the payment terms of, any accounts payable or accrued expenses other Liabilities or the issuance of invoices or the collection of the accounts receivable or other receivables, including the acceleration or deferral of the payment or collection thereof or failure to properly categorize Inventory, in each case, notes payable (other than (i) in connection with a good faith dispute or in the ordinary course Ordinary Course of business, (ii) pursuant to Contracts to which a Company is a party that are in effect as of the Execution Date or (iii) to satisfy the requirements in Section 4.22Business);
(xviii) settle any Action other than any settlement in the ordinary course of business for an amount not in excess of $3,000,000 in the aggregate that does not involve non-monetary relief;
(xix) (A) file any amended material Tax Return, (B) make or change any material Tax election, (C) agree to any material adjustment of any Tax attribute, (D) surrender any material right or claim to a refund of Taxes, (E) consent to any extension or waiver of the statute of limitations period applicable to any material Taxes, (F) enter into any closing agreement with respect to material Taxes, (G) settle or compromise any material Tax liability, or (H) jeopardize the validity of the CIT/TT Fiscal Unity, it being understood Action on a basis that any filing of a Tax Return or other measures required for the termination and settlement of the domination and profit and loss transfer agreement entered into between BOG and BOG Seller 1 (“DPLTA”) (including effecting (pre)payments in cash or as non-cash payments, as the case may be) shall be as set forth in Section 4.22(c) and in Section 4.22(c) of the Seller Disclosure Letter and, thereby, the fiscal unity for corporate income Tax and trade Tax purposes between BOG as controlled company and the BOG Seller 1 as controlling company (the “CIT/TT Fiscal Unity”) as of the Closing shall be permitted;
(xx) other than (i) as may be required by any Benefit Plan, or (ii) in connection with any action that applies uniformly to Business Employees and all other similarly situated employees of Sellers and their Affiliates, (A) promise, announce or grant to any Business Employee or Service Provider any material increase in compensation or benefits, including, without limitation, severance or termination pay, other than such increases in compensation or benefits (but not severance or termination pay) as are would result in the ordinary course imposition of business, as to timing and amount, in connection with Sellers’ annual review of compensation, (B) as applicable to the Business Employees, adopt, establish, enter into, terminate, waive or materially amend any Benefit Plan (or any plan, policy, agreement, arrangement, program or contract Order that would be a Benefit Plan if in effect on restrict the date hereof) that will be a Transferred Benefit Plan as of the Closing Date, (C) take any action to accelerate the timing of payment, vesting future activity or funding of any compensation or benefits, payable or to become payable to any Business Employee, Former Business Employees or Service Provider, (D) transfer any Business Employee out conduct of the Business or transfer any employee a finding or admission of Sellers that is not a Business Employee as violation of Law or violation of the Execution Date into either rights of any Person or which would reasonably be expected to (A) have a materially adverse impact on the operations of the Companies, (E) hire or engage any Person to become a Business Employee or Service Provider, other than hiring an individual, in the ordinary course of business consistent with past practice, or to fill a position, in each case, with an annual base salary of less than $150,000, or (FB) terminate (other than for causeinvolve any criminal liability, as determined non-monetary remedy, any admission of material wrongdoing or any material wrongful conduct by the Sellers and the Companies in the ordinary course of business consistent with past practice) any Key Employee;Business; or
(xxi) (i) amend, modify, negotiate, adopt, enter into, extend, renew or terminate any Labor Agreement, (ii) recognize or certify any labor organization, works council, labor union or group of employees of any of the Companies as the bargaining representative for any employees of the Companies or (iii) engage in or announce any employee layoffs, furloughs, reductions in force, reductions in compensation, hours or benefits, work schedule changes or similar actions that could implicate the WARN Act;
(xxii) permit any Material Permits to lapse or be cancelled (other than to the extent the applicable Material Permit becomes obsolete, redundant or no longer required by or advisable under applicable Law);
(xxiii) except as may be initiated by Seller Parent with respect to Seller Parent’s groupwide insurance policies (provided that such lapse or cancellation is not initiated to, or intended to, specifically affect the coverage available under such insurance policies relating to the Business), permit any insurance policy relating to the Business, the Companies (or their respective assets, properties, rights or liabilities), the Transferred Assets or the Assumed Liabilities to lapse or be cancelled; or (xxivxix) agree, authorize or commit to do any of the foregoing with respect to the conduct of the Businessforegoing.
(b) Notwithstanding anything to the contrary contained in this Agreement, nothing in this Section 4.1 (but without limiting Section 4.1(a)(B) above)5.1 shall prohibit or otherwise restrict in any way the operation of the business of Seller and its Affiliates, none of Sellers, the Companies and any of their respective Affiliates shall be prevented from undertaking, or be required to obtain Buyers’ consent except solely with respect to, the following actions and inactions:
(i) any action or inaction in connection with any action or inaction required by Law or by any quarantine, “shelter in place,” “stay at home,” workforce reduction, social distancing, shutdown, closure, sequester, or any other similar Law or Order by any Governmental Entity in connection with or in response to COVID-19 (“COVID-19 Measures”) or required or requested by any Governmental Entity in connection with or in response to COVID-19 (provided that, to the extent reasonably practicable and permitted by applicable Law, Sellers shall promptly notify Buyers of any such action or inaction if it would otherwise violate Section 4.1(a)); and
(ii) any action or inaction required or reasonably necessary to (x) protect the health and safety conduct of the Business’ employees, customers or suppliers Business by Seller and other individuals having business dealings with the Business in connection with COVID-19 or (y) respond to service disruptions caused by COVID-19 or any COVID-19 Measures, in each case to the extent reasonably consistent with actions that have been taken or not taken by Sellers or its Affiliates in connection therewith prior to the date hereof (provided that, to the extent reasonably practicable and permitted by applicable Law, Sellers shall promptly notify Buyers of any such action or inaction if it would otherwise violate Section 4.1(a))Affiliates.
(c) Without limiting Section 4.1(a)(B)(xi) hereof, from the Execution Date until the earlier of the Closing and the termination of this Agreement in accordance with its terms, Sellers shall, and shall cause their Affiliates to use commercially reasonably efforts to take the actions set forth on Section 4.1(c)
Appears in 1 contract
