Interim Operations of the Company. The Company covenants and agrees that, except (i) as expressly contemplated by this Agreement, (ii) as set forth in Section 5.1 of the Company's Disclosure Schedule or (iii) as agreed in writing by Parent, after the date hereof, and prior to the time the designees of the Purchaser have been elected to, and shall constitute a majority of, the Board of Directors of the Company pursuant to Section 1.3 (the "Appointment Date"): (a) the business of the Company and its Subsidiaries shall be conducted only in the ordinary and usual course and, to the extent consistent therewith, each of the Company and its Subsidiaries shall use its commercially reasonable best efforts to preserve its business organization intact and maintain its existing relations with customers, suppliers, employees, creditors and business partners; (b) the Company will not, directly or indirectly, (i) sell, transfer or pledge or agree to sell, transfer or pledge any of the Shares, Preferred Stock or capital stock of any of its Subsidiaries beneficially owned by it; (ii) amend its Articles of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares or Preferred Stock or any outstanding capital stock of any of the Subsidiaries of the Company; (c) neither the Company nor any of its Subsidiaries shall: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire any shares of, capital stock of any class of the Company or its Subsidiaries, other than shares reserved for issuance on the date hereof pursuant to the exercise of Options outstanding on the date hereof; (iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any material assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any material indebtedness or other liability; or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock; (d) neither the Company nor any of its Subsidiaries shall: (i) grant any increase in the compensation payable or to become payable by the Company or any of its Subsidiaries to any of its employees; (ii) (A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under any existing, bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company or any its Subsidiaries; (e) neither the Company nor any of its Subsidiaries shall modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims thereunder; (f) neither the Company nor any of its Subsidiaries shall permit any material insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to Parent; (g) neither the Company nor any of its Subsidiaries shall: (i) incur or assume any long-term debt or any short-term indebtedness; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person, except in the ordinary course of business and consistent with past practice; (iii) make any loans, advances or capital contributions to, or investments in, any other person (other than to wholly owned Subsidiaries of the Company or customary loans or advances to employees in accordance with past practice); or (iv) enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate); (h) neither the Company nor any of its Subsidiaries shall change any of the accounting methods used by it unless required by GAAP; (i) neither the Company nor any of its Subsidiaries shall pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company and its consolidated Subsidiaries; (j) neither the Company nor any of its Subsidiaries will adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than the Merger); (k) neither the Company nor any of its Subsidiaries will take, or agree to commit to take, any action that would make any representation or warranty of the Company contained herein, in the case of any representation or warranty not qualified by materiality, materially inaccurate or, in the case of any other representation or warranty, inaccurate in any respect at, or as of any time prior to, the Effective Time; and (l) neither the Company nor any of its Subsidiaries will enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.
Appears in 3 contracts
Samples: Merger Agreement (American Studios Inc), Merger Agreement (Pca International Inc), Merger Agreement (American Studios Inc)
Interim Operations of the Company. The Company covenants and agrees thatthat prior to the Effective Time, except (i) as expressly contemplated by this Agreement, (ii) as set forth in Section 5.1 of the Company's Disclosure Schedule Schedule, or (iii) as agreed in writing by Parent, after the date hereof, and prior to the time the designees of the Purchaser have been elected to, and shall constitute a majority of, the Board of Directors of the Company pursuant to Section 1.3 (the "Appointment Date")::
(a) the business of the Company and its Subsidiaries each Company Subsidiary shall be conducted only in the usual, regular and ordinary course and usual course andsubstantially in the same manner as heretofore conducted, to the extent consistent therewith, and each of the Company and its Subsidiaries shall use its commercially reasonable best efforts to preserve its business organization intact intact, keep available the services of its current officers and employees and maintain its existing relations with franchisees, customers, suppliers, employeescreditors, creditors business partners and others having business partnersdealings with it, to the end that the goodwill and ongoing business of each of them shall be unimpaired at the Effective Time;
(b) the Company will not, directly or indirectly, (i) sell, transfer or pledge or agree to sell, transfer or pledge any of the Shares, Preferred Stock or capital stock of any of its Subsidiaries beneficially owned by it; (ii) amend its Articles of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares or Preferred Stock or any outstanding capital stock of any of the Subsidiaries of the Company;
(c) neither the Company nor any of its Subsidiaries Company Subsidiary shall: (i) declareamend its certificate of incorporation or by-laws or similar organizational documents, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, transfer, pledge, dispose of or encumber any additional shares ofof any class or series of its capital stock or Voting Debt, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire acquire, any shares of, capital stock of any class or series of the Company its capital stock or its Subsidiariesany Voting Debt, other than shares Shares reserved for issuance on the date hereof pursuant to the exercise of Company Options outstanding on the date hereof; , (iii) transferdeclare, leaseset aside or pay any dividend or other distribution payable in cash, licensestock or property with respect to any shares of any class or series of its capital stock; (iv) split, sellcombine or reclassify any 34 39 shares of any class or series of its stock; or (v) redeem, mortgage, pledge, dispose ofpurchase or otherwise acquire directly or indirectly any shares of any class or series of its capital stock, or encumber any material assets instrument or security which consists of or includes a right to acquire such shares;
(c) neither the Company nor any Company Subsidiary shall (i) incur or modify any indebtedness or other liability, other than in the ordinary and usual course of business and consistent with past practice, or incur or modify practice and in any material indebtedness or other liabilityevent not in excess of $50,000; or (ivii) redeemmodify, purchase amend or otherwise acquire directly terminate any Company Agreement or indirectly waive, release or assign any material rights or claims, except in the ordinary course of its capital stockbusiness and consistent with past practice;
(d) neither the Company nor any of its Subsidiaries shall: (i) grant any increase in the compensation payable or to become payable by the Company or any of its Subsidiaries to any of its employees; (ii) (A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under any existing, bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company or any its Subsidiaries;
(e) neither the Company nor any of its Subsidiaries shall modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims thereunder;
(f) neither the Company nor any of its Subsidiaries shall permit any material insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to Parent;
(g) neither the Company nor any of its Subsidiaries Subsidiary shall: (i) incur or assume any long-term debt debt, or except in the ordinary course of business, incur or assume any short-term indebtednessindebtedness in amounts not consistent with past practice; (ii) modify the terms of any indebtedness or other liability; (iii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person, except in the ordinary course of business and consistent with past practicePerson; (iiiiv) make any loans, advances or capital contributions to, or investments in, any other person Person (other than to or in wholly owned Subsidiaries of the Company or customary loans or advances to employees in accordance with past practiceCompany); or (ivv) enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate);
(h) neither the Company nor any of its Subsidiaries shall change any of the accounting methods used by it unless required by GAAP;
(i) neither the Company nor any of its Subsidiaries shall pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company and its consolidated Subsidiaries;
(j) neither the Company nor any of its Subsidiaries will adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than the Merger);
(k) neither the Company nor any of its Subsidiaries will take, or agree to commit to take, any action that would make any representation or warranty of the Company contained herein, except in the case of any representation or warranty not qualified by materiality, materially inaccurate or, (v) in the case ordinary course of any other representation or warranty, inaccurate business and in any respect at, or as event not in excess of any time prior to, the Effective Time; and
(l) neither the Company nor any of its Subsidiaries will enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.$1,000,000;
Appears in 3 contracts
Samples: Merger Agreement (Softworks Inc), Merger Agreement (Eagle Merger Corp), Merger Agreement (Softworks Inc)
Interim Operations of the Company. The Company covenants and --------------------------------- agrees thatthat prior to the Effective Time, except (i) as expressly contemplated by this Agreement, (ii) as set forth in Section 5.1 6.1 of the Company's Company Disclosure Schedule Letter or (iii) as agreed in writing by Parentthe Parent (which agreement shall not be unreasonably withheld), after the date hereof, and prior to the time the designees of the Purchaser have been elected to, and shall constitute a majority of, the Board of Directors of the Company pursuant to Section 1.3 (the "Appointment Date")::
(a) the business of the Company and its Subsidiaries of each Company Subsidiary shall be conducted only in the ordinary course and usual course andconsistent with past practice, to the extent consistent therewith, each of and the Company and its Subsidiaries each Company Subsidiary shall use its commercially reasonable best efforts to preserve its business organization intact intact, keep available the services of its current officers and employees and maintain its existing relations with licensors, customers, suppliers, employeesdistributors, creditors creditors, business partners and others having business partnersdealings with it, to the end that their respective goodwill and ongoing business shall be unimpaired at the Effective Time;
(b) the Company will not, directly or indirectly, (i) sell, transfer or pledge or agree to sell, transfer or pledge any of the Shares, Preferred Stock or capital stock of any of its Subsidiaries beneficially owned by it; (ii) amend its Articles of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares or Preferred Stock or any outstanding capital stock of any of the Subsidiaries of the Company;
(c) neither the Company nor any of its Subsidiaries Company Subsidiary shall: (i) declareamend its certificate of incorporation or bylaws or similar organizational documents, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, transfer, pledge, dispose of or encumber any additional shares ofof any class or series of its capital stock or Voting Debt, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire acquire, any shares of, capital stock of any class or series of the Company its capital stock or its Subsidiariesany Voting Debt, other than (x) the issuance of shares of Company Common Stock reserved for issuance on the date hereof of this Agreement pursuant to the exercise of Company Options and Purchase Rights under the Company ESPP outstanding on the date hereof; of this Agreement or (y) the issuance of up to 400,000 company options to non-executive officer employees consistent with past practices in the ordinary course of business (provided that consummation of the Merger in accordance with the terms hereof shall not result in accelerated vesting of such options), (iii) transferdeclare, lease, license, sell, mortgage, pledge, dispose of, set aside or encumber pay any material assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any material indebtedness dividend or other liability; distribution payable in cash, stock or property with respect to any shares of any class or series of its capital stock, (iv) split, combine or reclassify any shares of any class or series of its capital stock, (v) redeem, purchase or otherwise acquire directly or indirectly any shares of any class or series of its capital stock, or enter into any instrument or security which consists of or includes a right to acquire such shares, other than share revesting arrangements entitling the Company to purchase shares from employees or consultants at their cost or (vi) adopt or implement any stockholder rights plan that does not exempt from its provisions the Transactions;
(dc) neither the Company nor any of its Subsidiaries shall: (i) grant any increase in the compensation payable or to become payable by the Company or any of its Subsidiaries to any of its employees; (ii) (A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under any existing, bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company or any its Subsidiaries;
(e) neither the Company nor any of its Subsidiaries Subsidiary shall modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims thereunderclaims, except in the ordinary course of business consistent with past practice;
(fd) neither the Company nor any of its Subsidiaries Company Subsidiary shall permit any material insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to Parent;
(g) neither the Company nor any of its Subsidiaries shall: (i) incur incur, modify or assume any long-term debt indebtedness for borrowed money, or except in the ordinary course of business consistent with past practice, incur or assume any short-term indebtednessindebtedness for borrowed money; (ii) modify the terms of any indebtedness, other than modifications of short term debt in the ordinary course of business consistent with past practice; (iii) assume, guarantee, endorse or otherwise intentionally become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other personPerson, except in the ordinary course of business and consistent with past practice; or (iiiiv) make any loans, advances or capital contributions to, or investments in, any other person Person (other than to or in wholly owned Company Subsidiaries and expense advances to employees in the ordinary course of business and consistent with past practice);
(e) neither the Company nor any Company Subsidiary shall transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any material asset, other than in the ordinary course of business and consistent with past practice;
(f) except as otherwise specifically provided in this Agreement, neither the Company nor any Company Subsidiary shall (x) with respect to employees or consultants who are executive officers, directors or Affiliates of the Company (i) make or offer to make any change in the compensation payable or to become payable to such individuals, (ii) enter into or amend any employment, severance, termination or employee benefit plan or any other agreement, contract, commitment, understanding or arrangement with such individuals, or (iii) make any change in its existing borrowing or lending arrangements for or on behalf of any such individuals pursuant to a Company Benefit Plan or otherwise, (y) other than in the ordinary course of business and consistent with past practice, with respect to employees or consultants who are not executive officers, directors or Affiliates of the Company (i) make or offer to make any change in the compensation payable or to become payable to such consultants or employees, (ii) enter into or amend any employment, severance, termination or employee benefit plan or any other agreement, contract, commitment, understanding or arrangement with such consultants or employees, or (iii) make any change in its existing borrowing or lending arrangements for or on behalf of such consultants or employees pursuant to a Company Benefit Plan or otherwise, or (z) make any loans subsequent to the date hereof in excess of $200,000 in the aggregate, to its officers, directors or employees;
(g) except as otherwise specifically contemplated by this Agreement or as set forth in Section 6.1(g) of the Company Disclosure Letter, neither the Company nor any Company Subsidiary shall (x) except payments and accruals made in the ordinary course of business consistent with past practice (i) pay or make any accrual or arrangement for payment of any pension, retirement allowance or other employee benefit pursuant to any existing plan, agreement or arrangement to any officer, director, employee or Affiliate, (ii) pay, offer to pay or agree to pay or make any accrual or arrangement for payment to any officers, directors, employees or Affiliates of the Company or customary loans any Company Subsidiary of any amount relating to unused vacation days, or advances (iii) amend in any material respect any such existing plan, agreement or arrangement in a manner inconsistent with the foregoing, or (y) (i) adopt or pay, grant, issue, accelerate or accrue salary or other payments or benefits pursuant to employees any new pension, profit-sharing, bonus, extra compensation, incentive, deferred compensation, stock purchase, stock option, stock appreciation right, group insurance, severance pay, retirement or other employee benefit plan, agreement or arrangement, or any employment or consulting agreement with or for the benefit of any director, officer, employee, agent or consultant, or (ii) pay or make any accrual or arrangement for payment of any amount in accordance connection with any of the foregoing in (y)
(i) outside of the ordinary course consistent with past practice); or (iv) enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate);
(h) neither the Company nor any Company Subsidiary shall enter into any contract or transaction involving total consideration in excess of its Subsidiaries shall change any $400,000 other than in the ordinary course of the accounting methods used by it unless required by GAAPbusiness consistent with past practice;
(i) neither the Company nor any Company Subsidiary shall revalue in any material respect any of its Subsidiaries shall payassets, discharge including writing down the value of inventory or satisfy any claims, liabilities writing-off notes or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise)accounts receivable, other than in the payment, discharge ordinary course of business consistent with past practice or satisfaction as required by a change in GAAP promulgated after the date of any such claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company and its consolidated Subsidiariesthis Agreement;
(j) neither the Company nor any Company Subsidiary shall settle or compromise any pending or threatened suit, action or claim that (i) relates to the transactions contemplated hereby or (ii) the settlement or compromise of its which would involve more than $300,000 and does not obligate the Company to take or refrain from taking any action other than the payment of such sum or that would otherwise be material to the Company and Company Subsidiaries, considering the Company together with the Company Subsidiaries as a whole, or that relates to any matters concerning Company Intellectual Property;
(k) neither the Company nor any Company Subsidiary will adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries Company Subsidiary (other than the Merger);
(kl) neither the Company nor any Company Subsidiary will (i) change any of its Subsidiaries the accounting methods used by it unless required by a change in GAAP promulgated after the date of this Agreement or (ii) make any material election relating to Taxes, change any material election relating to Taxes already made, adopt any material accounting method relating to Taxes, change any material accounting method relating to Taxes unless required by a change in GAAP or change in the Code or the regulations under the Code promulgated after the date of this Agreement, enter into any closing agreement relating to any material Taxes, settle any claim or assessment relating to any material Taxes or consent to any claim or assessment relating to any material Taxes or any waiver of the statute of limitations for any such claim or assessment;
(m) neither the Company nor any Company Subsidiary will take, or agree to commit to take, any action that would make reasonably be expected to result in any representation or warranty of the Company contained herein, conditions set forth in the case of any representation or warranty Sections 7.1 and 7.2 not qualified by materiality, materially inaccurate or, in the case of any other representation or warranty, inaccurate in any respect atbeing satisfied, or as that would materially impair the ability of any time prior tothe Company, the Effective TimeParent or Merger Sub to consummate the Merger in accordance with the terms thereof or materially delay such consummation; andor
(ln) neither the Company nor any of its Subsidiaries Company Subsidiary will enter into an any agreement, contract, commitment commitment, understanding or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.
Appears in 3 contracts
Samples: Merger Agreement (Otg Software Inc), Merger Agreement (Legato Systems Inc), Merger Agreement (Legato Systems Inc)
Interim Operations of the Company. The Company covenants and agrees that, except (i) as expressly contemplated by this Agreement, (ii) or as set forth in Section 5.1 of the Company's Disclosure reflected on Schedule or (iii) as agreed in writing by Parent5.1, after the date hereof, and prior to the time earlier of (x) the designees termination of this Agreement in accordance with Article VIII and (y) the Purchaser have been elected to, and shall constitute a majority of, the Board of Directors of the Company pursuant to Section 1.3 (the "Appointment Date"):Effective Time:
(a) the business of the Company and its the Company Subsidiaries shall be conducted only in the ordinary course of business consistent with past practice, and usual course and, to the extent consistent therewith, each of the Company and its the Company Subsidiaries shall use its commercially reasonable best efforts to preserve its present business organization intact intact, to keep available the services of its current officers, employees and consultants, and to maintain its existing good relations with customers, suppliers, employees, creditors contractors, distributors and others having business partnersdealings with it;
(b) neither the Company will notnor any Company Subsidiary shall, (i) directly or indirectly, except with respect to the Company, for the issuance of Shares upon the exercise of the Options or the MSLO Warrant or upon the vesting of Restricted Stock Units, the exercise of Exchange Rights or the final installment of consideration payable under the Company's Asset Purchase Agreement with Global Appliance Technologies, Inc. (ithe "Global Asset Purchase Agreement") outstanding on the date of this Agreement pursuant to the terms of such Options, MSLO Warrant, Restricted Stock Units, Exchange Rights and Global Asset Purchase Agreement, issue, sell, transfer or pledge or agree to sellmodify, transfer transfer, dispose of, encumber or pledge any shares of the Shares, Preferred Stock or capital stock of the Company or any capital stock or other equity interests of its Subsidiaries beneficially owned by itany Company Subsidiary, securities convertible into or exchangeable for, or options, warrants or rights of any kind to acquire any shares of such capital stock or other equity interests or any other ownership interest; (ii) amend or otherwise change its Articles Certificate of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine combine, reclassify, subdivide or reclassify the outstanding Shares redeem, or Preferred Stock purchase or any outstanding capital stock of any of the Subsidiaries of the Company;
(c) neither the Company nor otherwise acquire, directly or indirectly, any of its Subsidiaries shall: capital stock or other equity interests; or (iiv) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire any shares of, capital stock of any class of the Company or its Subsidiaries, other than shares reserved for issuance on the date hereof pursuant to the exercise of Options outstanding on the date hereof; (iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any material assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any material indebtedness or other liability; or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock;
(dc) neither the Company nor any of its Subsidiaries shall: (i) grant any increase in the compensation payable or to become payable by the Company or any of its Subsidiaries to any of its employees; (ii) (A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under any existing, bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company or any its Subsidiaries;
(e) neither the Company nor any of its Subsidiaries shall modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims thereunder;
(f) neither the Company nor any of its Subsidiaries shall permit any material insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to Parent;
(g) neither the Company nor any of its Subsidiaries shall: Subsidiary will (i) incur or assume indebtedness or issue any long-term debt securities, except for the incurrence of indebtedness for working capital purposes (including payment of costs associated with the transactions reflected by this Agreement) under the Company's or any short-term indebtednessthe Company Subsidiaries' existing credit facilities, in each case as in effect on the date hereof; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person, except in the ordinary course of business and consistent with past practicePerson; (iii) make any loans, advances or capital contributions to, or investments in, any other person Person; (iv) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or any equity interest therein; (v) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any of its assets or properties, other than in the ordinary course of business consistent with past practice, except, in the case of each of clauses (i) through (v) above, for amounts that do not exceed $100,000 in the aggregate at any time;
(d) neither the Company nor any Company Subsidiary shall (i) increase the compensation or benefits payable or to wholly owned Subsidiaries become payable to any of its officers, directors, employees, agents or consultants; (ii) enter into, extend or amend any employment, collective bargaining, severance, consulting, termination or other agreement or employee benefit plan, except as required to comply with Section 409A of the Company Code; or customary (iii) (except as otherwise would be permitted under subsection (c) above) make any loans or advances to any of its officers, directors, employees, agents, consultants or affiliates or change its existing borrowing or lending arrangements for or on behalf of any of such persons pursuant to an employee benefit plan or otherwise except: (1) for changes that are required by applicable law; or (2) to satisfy contractual obligations existing as of the date hereof under employment, consulting, severance, change of control or other agreements, including contractual promises to pay for 409A penalty exposures and income tax thereon, the material amount of which is reserved in the Company's books on the date hereof and has been disclosed to Parent;
(e) neither the Company nor any Company Subsidiary shall (i) pay or arrange for payment of any pension, retirement allowance or other employee benefit pursuant to any existing plan, agreement or arrangement to any officer, director, employee or affiliate or pay or make any arrangement for payment to any officers, directors, employees or affiliates of the Company of any amount relating to unused vacation days, except payments and accruals made in accordance the ordinary course of business consistent with past practicepractice or as may be required pursuant to the terms of a Benefit Plan or applicable Laws, (ii) except as may be required pursuant to the terms of a Benefit Plan as in effect as of the date of this Agreement or applicable Laws, adopt or pay, grant, issue, accelerate or accrue salary or other payments or benefits pursuant to any pension, profit-sharing, bonus, extra compensation, incentive, deferred compensation, stock purchase, stock option, stock appreciation right, group insurance, severance pay, retirement or other employee benefit plan, agreement or arrangement, or any employment or consulting agreement with or for the benefit of any director, officer or employee, whether past or present, or (iii) amend in any material respect any such existing plan, agreement or arrangement;
(f) neither the Company nor any Company Subsidiary will, (i) modify, extend, amend or terminate any Material Contract to which the Company or any Company Subsidiary is a party or by which any of them or any of their respective properties or assets may be bound (except for such modifications, extensions, amendments or terminations which are immaterial or which are favorable to the Company); (ii) waive, release or assign any rights or claims under any of such Contracts (except for such waivers or releases which are immaterial or which are favorable to the Company); or (iviii) enter into any material commitment Material Contract;
(g) neither the Company nor any Company Subsidiary shall, except in the ordinary course of business consistent with past practice, grant or transaction (includingacquire, but not limited agree to grant or acquire from any Person, or dispose of or permit to lapse any rights to, any borrowingIntellectual Property, capital expenditure or purchasedisclose or agree to disclose to any Person, sale other than representatives of Parent and Merger Sub, any trade secret or lease of assets or real estate)other confidential information;
(h) neither the Company nor any of its Subsidiaries shall Company Subsidiary will (i) change any of the accounting methods used by it unless except for such changes required by GAAPGAAP or applicable Law or (ii) make any material Tax election or change any Tax election already made, adopt any Tax accounting method, change any Tax accounting method, enter into any closing agreement or settle any claim or assessment relating to a material amount of Taxes or consent to any claim or assessment relating to a material amount of Taxes or any waiver of the statute of limitations for any such claim or assessment;
(i) neither the Company nor any of its Subsidiaries shall Company Subsidiary will pay, discharge or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations, in the ordinary course of business consistent with past practice, or of claims, liabilities or obligations reflected or reserved against in, or contemplated by, in the consolidated financial statements (or the notes thereto) Financial Statements of the Company and its consolidated Subsidiariesfor the period ended December 31, 2007 (including remaining payments required pursuant to the Global Asset Purchase Agreement) or incurred since December 31, 2007 in the ordinary course of business consistent with past practice;
(j) neither the Company nor any Company Subsidiary will (i) settle or commence any action, suit, claim, litigation or other proceeding involving an amount in excess of its Subsidiaries $100,000 or, in the aggregate, an amount in excess of $500,000 or (ii) enter into any consent decree, injunction or other similar restraint or form of equitable relief in settlement of any action, suit, claim, litigation or other proceeding;
(k) neither the Company nor any Company Subsidiary will adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries Company Subsidiary (other than with respect to Company, the Merger);
(k) neither the Company nor any of its Subsidiaries will take, or agree to commit to take, any action that would make any representation or warranty of the Company contained herein, in the case of any representation or warranty not qualified by materiality, materially inaccurate or, in the case of any other representation or warranty, inaccurate in any respect at, or as of any time prior to, the Effective Time; and
(l) neither the Company nor any Company Subsidiary will take any action that could result in any of its the conditions to the Merger set forth in Article VII not being satisfied or that could delay the consummation of, or impair the ability of the Company to consummate, the transactions contemplated by this Agreement in accordance with the terms hereof;
(m) the Company shall not, and shall not permit any of the Company Subsidiaries to, enter into, amend, modify or supplement any agreement, transaction, commitment or arrangement with any officer, director or other affiliate (or any affiliate of any of the foregoing);
(n) neither the Company nor any Company Subsidiary shall make any capital expenditure which is not in all material respects in accordance with the annual budget for the fiscal year 2008, a true and correct copy of which is attached to Schedule 5.1; and
(o) neither the Company nor any Company Subsidiary will enter into an any agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.
Appears in 2 contracts
Samples: Merger Agreement (Middleby Corp), Merger Agreement (Turbochef Technologies Inc)
Interim Operations of the Company. The Company covenants and agrees that, except (i) as expressly contemplated by this Agreement, (ii) as set forth in Section 5.1 of the Company's Company Disclosure Schedule or (iii) as agreed in writing by Parent, after the date hereof, execution and prior to delivery of this Agreement and continuing until the time the designees earlier of the Purchaser have been elected to, and shall constitute a majority of, termination of this Agreement or the Board of Directors of the Company pursuant to Section 1.3 (the "Appointment Date"):Effective Time:
(a) the business of the Company and its Subsidiaries shall be conducted only in the ordinary and usual course and in all material respects in compliance with all applicable Legal Requirements and, to the extent consistent therewith, each of the Company and its Subsidiaries shall use its commercially reasonable best efforts to preserve its business organization intact and intact, to maintain its existing relations with customers, suppliers, employees, creditors and business partnerspartners and to maintain customary levels of insurance coverage with respect to its assets and operations;
(b) the Company will shall not, directly or indirectly, (i) sell, transfer amend its or pledge or agree to sell, transfer or pledge any of the Shares, Preferred Stock or capital stock of any of its Subsidiaries beneficially owned by it; (ii) amend its Articles Subsidiaries' certificate of Incorporation incorporation or Bylaws bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares or Preferred Stock or any outstanding capital stock of any of the Subsidiaries of the Company;
(c) neither the Company nor any of shall not, and it shall not permit its Subsidiaries shallto: (ii)(A) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to the Company's capital stock or that of its Subsidiaries other than those dividends or other distributions payable solely to the Company or one of its wholly-owned Subsidiaries, or (B) redeem, purchase or otherwise acquire directly or indirectly any of the Company's capital stock (or options, warrants, calls, commitments or rights of any kind to acquire any shares of capital stock) or that of its Subsidiaries; (ii) issue, sell, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire acquire, any shares of, of capital stock of any class of the Company or its Subsidiaries, other than shares reserved for issuance on the date hereof pursuant to Shares issued upon the exercise of Stock Options or Warrants outstanding on the date hereof; or (iii) split, combine or reclassify the outstanding capital stock of the Company or of its Subsidiaries;
(d) the Company shall not, and it shall not permit its Subsidiaries to, acquire or agree to acquire, or except as contemplated by the Xxxxx Restructuring (as defined in the Foamex Credit Agreement), transfer, lease, license, sell, mortgage, pledge, encumber, dispose of or agree to dispose of, or encumber any material assets assets, including Intellectual Property, other than the Company's Mesquite Texas facility, either by purchase, merger, consolidation, sale of shares in any of its Subsidiaries or otherwise, except pursuant to Contracts of the Company or its Subsidiaries in effect on the date hereof, in the ordinary and usual course of business and consistent with past practicepractice or in transactions involving consideration of less than $5,000,000, or incur or modify any material indebtedness or other liability; or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stockin the aggregate;
(de) neither the Company nor any of its Subsidiaries shall: (i) grant any increase in the compensation payable or to become payable by the Company or any of its Subsidiaries (A) to any of its employeesexecutive officers or directors, other than regularly scheduled pay increases of not more than 10% per annum, or (B) to any of its key employees other than in the ordinary course of business consistent with past practice; or (ii) (Aii)(A) adopt any new, or (B) except as contemplated by Section 2.4 or as required by any obligation existing as of the date hereof to do so or any applicable Legal Requirement or in connection with the Xxxxx restructuring, amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under any existing, bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan plan, agreement or arrangement; or (iii) enter into or modify or amend any employment or severance agreement with or, except as required by any applicable Legal Requirement or in accordance connection with the existing written policies of Xxxxx restructuring or Contracts in effect on the Companydate hereof, grant any severance or termination pay to any officer, officer or director or employee of the Company or any of its Subsidiaries; or (iv) enter into any collective bargaining agreement;
(ef) neither the Company nor any of its Subsidiaries shall modify, amend or terminate any of its material contracts Contracts or waive, release or assign any material rights or claims thereunder;
(f) neither claims, other than in the Company nor any ordinary course of its Subsidiaries shall permit any material insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to Parentbusiness consistent with past practice;
(g) neither the Company nor any of its Subsidiaries shall: (i) incur or assume any long-term debt or indebtedness other than indebtedness with respect to working capital in amounts consistent with past practice and capital leases in the ordinary course of business; (ii) materially modify any short-term material indebtedness; (iiiii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the any material obligations of any other person, except in the ordinary course of business and consistent with past practiceperson (other than a Subsidiary); (iiiiv) make any loans, advances or capital contributions to, or investments in, any other person (other than to wholly owned the Subsidiaries of the Company set forth on Section 3.1 of the Company's Disclosure Schedule (provided the ownership structure of such Subsidiary has not changed from that existing on the date hereof) or customary loans or advances to employees in accordance with past practiceemployees); or (ivv) enter into any material commitment Contract or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease other than in the ordinary course of assets or real estate)business consistent with past practice;
(h) neither the Company nor any of its Subsidiaries shall materially change any of the accounting methods methods, practices or policies used by it it, unless required by GAAP;
(i) neither the Company nor shall not, and it shall not permit its Subsidiaries to, make any material tax election (unless required by law) or settle or compromise any material income tax liability;
(j) the Company shall not, and it shall not permit its Subsidiaries to (i) except in connection with any transaction permitted by Section 5.5, waive the benefits of, or agree to modify in any material manner, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries shall is a party, or (ii) except in the ordinary course of business consistent with past practice, pay, discharge or satisfy any actions, suits, proceedings or claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction satisfaction, in each case in complete satisfaction, and with a complete release, of any such claimsmatter with respect to all parties to such matter, liabilities of actions, suits, proceedings or obligations reflected or reserved against claims that would not reasonably be expected to result in, individually or contemplated byin the aggregate, the consolidated financial statements (or the notes thereto) of the Company and its consolidated Subsidiaries;
(j) neither the Company nor any of its Subsidiaries will adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than the Merger)Material Adverse Effect;
(k) neither the Company nor any of shall not, and it shall not permit its Subsidiaries will taketo, or agree commence a lawsuit other than (i) for the routine collection of bills, (ii) in such cases where the Company in good faith determines that the failure to commit to take, any action that commence suit would make any representation or warranty result in a material impairment of a valuable aspect of the Company's business or the forfeiture of substantial rights, provided that the Company contained herein, in the case of any representation consults with Parent prior to filing such suit or warranty not qualified by materiality, materially inaccurate or, in the case of any other representation or warranty, inaccurate in any respect at, or as of any time prior to, the Effective Time(iii) to enforce this Agreement; and
(l) neither the Company nor any of its Subsidiaries will shall enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.
Appears in 2 contracts
Samples: Merger Agreement (Foamex Capital Corp), Merger Agreement (Trace International Holdings Inc)
Interim Operations of the Company. The Company covenants and agrees that, except (i) as expressly contemplated by this Agreement, or (ii) as set forth in Section 5.1 of the Company's Disclosure Schedule or (iii) as agreed in writing by Parent, after the date hereof, and prior to the time the designees directors of the Purchaser have been elected to, and shall constitute a majority of, the Board of Directors of the Company pursuant to Section 1.3 (the "Appointment Date"):
(a) the business of the Company and its Subsidiaries shall be conducted only in the ordinary and usual course and, to the extent consistent therewith, each of the Company and its Subsidiaries shall use its commercially best reasonable best efforts to preserve its business organization intact and maintain its existing relations with customers, suppliers, employees, creditors and business partners;
(b) the Company will not, directly or indirectly, (i) except upon exercise of employee stock options outstanding on the date hereof, issue, sell, transfer or pledge or agree to sell, transfer or pledge any treasury stock of the Shares, Preferred Stock Company or any capital stock of any of its Subsidiaries beneficially owned by it; (ii) amend its Articles of Incorporation Charter or Bylaws By-laws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares or Preferred Stock or any outstanding capital stock of any of the Subsidiaries of the Company;
(c) neither the Company nor any of its Subsidiaries shall: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stockstock other than dividends paid by Subsidiaries of the Company to the Company or any of its Subsidiaries in the ordinary course of business; (ii) issue, sell, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire acquire, any shares of, of capital stock of any class of the Company or its Subsidiaries, other than shares Shares reserved for issuance on the date hereof pursuant to the exercise of Company Options outstanding on the date hereof; (iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any material assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any material indebtedness or other liability, other than in the ordinary and usual course of business and consistent with past practice; or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock;
(d) neither the Company nor any of its Subsidiaries shall: (i) grant any increase in the compensation payable or to become payable by the Company or any of its Subsidiaries to any of its employees; executive officers or (ii) (Aii)(A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under any existing, existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company or any of its Subsidiaries, provided, however, that nothing in this Section 5.1 shall prevent the Company from entering into written or oral employment agreements with seasonal employees if such agreements do not (i) obligate the Company to make severance payments to the employee, (ii) extend in duration for a period in excess of six (6) months or (iii) provide for salary in excess of $30,000 or hourly wages in excess of $15 per hour;
(e) neither the Company nor any of its Subsidiaries shall modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims thereunder;
(f) neither the Company nor any of its Subsidiaries shall permit any material insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to Parent, except in the ordinary course of business and consistent with past practice;
(f) neither the Company nor any of its Subsidiaries shall enter into any contract or transaction relating to the purchase of assets other than in the ordinary course of business consistent with prior practice;
(g) neither the Company nor any of its Subsidiaries shall change any of the accounting methods used by it unless required by GAAP, neither the Company nor any of its Subsidiaries shall make any material Tax election except in the ordinary course of business consistent with past practice, change any material Tax election already made, adopt any material Tax accounting method except in the ordinary course of business consistent with past practice, change any material Tax accounting method unless required by GAAP, enter into any closing agreement, settle any Tax claim or assessment or consent to any Tax claim or assessment or any waiver of the statute of limitations for any such claim or assessment;
(h) neither the Company nor any of its Subsidiaries shall: (i) incur or assume any long-term debt debt, (ii) except in the ordinary course of business and consistent with past practice and in an aggregate amount not to exceed $5,000,000 (not including any indebtedness incurred in connection with the payments made pursuant to Section 2.4(a) hereof), incur or assume any short-term indebtedness; (iiiii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person, except in the ordinary course of business and consistent with past practice; (iiiiv) make any loans, advances or capital contributions to, or investments investment in, any other person (other than to wholly wholly-owned Subsidiaries of the Company or customary loans or advances to employees in accordance with past practice); or (ivv) enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estateassets);
(hi) neither the Company nor any of its Subsidiaries shall change settle or compromise any of the accounting methods used by it unless required by GAAP;
(i) claim, lawsuit, liability or obligation, and neither the Company nor any of its Subsidiaries shall pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations obligation, (x) to the extent reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company and its consolidated Subsidiaries, (y) incurred in the ordinary course of business and consistent with past practice or (z) which are legally required to be paid, discharged or satisfied;
(j) neither the Company nor any of its Subsidiaries will adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than the Merger);
(k) neither the Company nor any of its Subsidiaries will take, or agree to commit to take, any action that would make any representation or warranty of the Company contained herein, in the case of any representation or warranty not qualified by materiality, materially inaccurate or, in the case of any other representation or warranty, herein inaccurate in any respect at, or as of any time prior to, the Effective Time;
(k) except as otherwise permitted by Section 5.4(b) hereof, neither the Company nor any of its Subsidiaries will take any action with the intent of causing any of the conditions to the Offer set forth in Annex A not to be satisfied; and
(l) except as otherwise permitted by Section 5.4(b) hereof, neither the Company nor any of its Subsidiaries will enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.
Appears in 2 contracts
Samples: Merger Agreement (Riddell Sports Inc), Merger Agreement (Varsity Spirit Corporation)
Interim Operations of the Company. The Company covenants and agrees that, except (i) as expressly contemplated by provided in this Agreement, Agreement or (ii) as set forth in Section 5.1 with the prior written consent of the Company's Disclosure Schedule or (iii) as agreed in writing by Parent, after the date hereof, hereof and prior to the time the designees of the Purchaser have been elected to, and shall constitute a majority of, the Board of Directors of the Company pursuant to Section 1.3 (the "Appointment Date"):Effective Time:
(a) the business of the Company and its Subsidiaries shall will be conducted only in the ordinary and usual customary course and, to the extent consistent therewith, with past practice and each of the Company and its Subsidiaries shall use its commercially reasonable best efforts to preserve its business organization intact and maintain its existing relations with customers, suppliers, employees, creditors and business partners;
(b) the Company will not, directly or indirectly, (i) sell, transfer or pledge or agree to sell, transfer or pledge any of the Shares, Preferred Stock or capital stock of any of its Subsidiaries beneficially owned by it; (ii) amend its Articles of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares or Preferred Stock Company Common Stock, or any outstanding capital stock of any of the Subsidiaries of the Company;
(c) neither the Company nor any of its Subsidiaries shall: shall (i) amend its certificate of incorporation or by-laws or similar organizational documents; (ii) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (iiiii) issue, sell, transfer, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire acquire, any shares of, of capital stock of any class of the Company or its Subsidiaries, other than shares reserved for issuance on the date hereof issuances pursuant to the exercise of Company Options outstanding on the date hereof, in accordance with their present terms; (iiiiv) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any material assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any material indebtedness or other liability; or (ivv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock;
(d) neither the Company nor any of its Subsidiaries shall: shall (i) grant any increase in the compensation payable or to become payable by the Company or any of its Subsidiaries to any of its officers, directors, employees, agents or consultants (other than increases for non-executive level employees in the ordinary course of business consistent with past practice); (ii) (A) adopt or enter into any newnew plan, policy, agreement or arrangement that would constitute a Company Benefit Plan, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under any existing, bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan agreement or arrangementexisting Company Benefit Plan; or (iii) enter into any, or amend any existing, employment or severance agreement with or, except in accordance with the existing written policies of the CompanyCompany previously delivered to Parent, grant any severance or termination pay to any officer, director or employee of the Company or any of its Subsidiaries; or (iv) make any loans to any of its officers, directors, employees, agents or consultants or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on the Merger or otherwise;
(e) neither the Company nor any of its Subsidiaries shall modify, amend or terminate any of its material contracts the Company Agreements or waive, release or assign any material rights or claims thereunderclaims, except in the ordinary course of business and consistent with past practice;
(f) neither the Company nor any of its Subsidiaries shall permit any material insurance policy naming it as a beneficiary or a loss payable payee to be cancelled canceled or terminated without notice to Parent, except in the ordinary course of business and consistent with past practice;
(g) neither the Company nor any of its Subsidiaries shall license or otherwise transfer, dispose of, permit to lapse or otherwise fail to preserve any of the Company's or any of its Subsidiaries' Intellectual Property Rights, or dispose of or disclose to any person any trade secret, formula, process or know-how not theretofore a matter of public knowledge, except in the ordinary course of business and consistent with past practice;
(h) neither the Company nor any of its Subsidiaries shall cancel any debts or waive, release or relinquish any contract rights or other rights of substantial value, except settlements of accounts receivable in the ordinary course of business and consistent with past practice;
(i) neither the Company nor any of its Subsidiaries shall: (i) incur or assume any long-term debt except for amounts set forth in the Company's budget previously delivered to Parent and, except in the ordinary course of business consistent with past practice, incur or assume any short-term indebtednessindebtedness in amounts not consistent with past practice; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person, except in the ordinary course of business and consistent with past practice; (iii) make any loans, advances or capital contributions to, or investments in, any other person (other than to wholly owned Subsidiaries of the Company or customary loans or advances to employees for travel and business expenses in accordance the ordinary course of business and consistent with past practice); or (iv) enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate)assets) other than capital expenditures pursuant to the Company's capital expenditures budget previously delivered to Parent and other capital expenditures that do not exceed $25,000 in the aggregate since March 31, 2000;
(hj) neither the Company nor any of its Subsidiaries shall (i) change any of the accounting methods principles used by it unless required by GAAP; or (ii) take or allow to be taken any action which would jeopardize qualification of the Merger as a reorganization within the meaning of Section 368(a) of the Code;
(ik) neither the Company nor any of its Subsidiaries shall pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations (i) in the ordinary course of business and consistent with past practice, or claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company and its consolidated Subsidiaries, (ii) incurred in the ordinary course of business and consistent with past practice or (iii) which are legally required to be paid, discharged or satisfied (provided that if such claims, liabilities or obligations referred to in this clause (iii) are legally required to be paid and are also not otherwise payable in accordance with clauses (i) or (ii) above, the Company will notify Parent in writing if such claims, liabilities or obligations exceed, individually or in the aggregate, $25,000 in value, reasonably in advance of their payment);
(jl) neither the Company nor any of its Subsidiaries will adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries or any agreement relating to an Alternative Transaction (other than the Mergeras defined in Section 5.6(a) hereof);
(km) neither the Company nor any of its Subsidiaries will take, or agree to commit to take, any action that would make any representation or warranty of the Company contained herein, in the case of any representation or warranty not qualified by materiality, materially inaccurate or, in the case of any other representation or warranty, herein inaccurate in any respect at, or as of any time prior to, the Effective Time;
(n) neither the Company nor any of its Subsidiaries will voluntarily make or agree to make any changes in Tax accounting methods, waive or consent to the extension of any statute of limitations with respect to Taxes, or consent to any assessment of Taxes, or settle any judicial or administrative proceeding affecting Taxes; and
(lo) neither the Company nor any of its Subsidiaries will enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.
Appears in 2 contracts
Samples: Merger Agreement (Tumbleweed Communications Corp), Merger Agreement (Tumbleweed Communications Corp)
Interim Operations of the Company. The Company covenants and agrees thatthat during the period from the date of this Agreement until the earlier to occur of (a) the termination of this Agreement or (b) the Appointment Date, except (i) as expressly contemplated by this Agreementthe Transactions, (ii) as set forth in Section 5.1 of the Company's Disclosure Schedule SECTION 6.1 OF THE COMPANY DISCLOSURE LETTER or (iii) as agreed consented to in writing by Parent, after the date hereof, and prior to the time the designees of the Purchaser have been elected to, and Parent (which consent shall constitute a majority of, the Board of Directors of the Company pursuant to Section 1.3 (the "Appointment Date"not be unreasonably withheld):
(a) the business of the Company and its each of the Subsidiaries shall be conducted only in the usual, regular and ordinary course and usual course andsubstantially in the same manner as heretofore conducted, to the extent consistent therewith, each of and the Company and its Subsidiaries each Company Subsidiary shall use its commercially reasonable best efforts to preserve its business organization intact substantially intact, keep available the services of its current officers and employees and maintain its existing relations with franchisees, customers, suppliers, employeescreditors, creditors business partners and others having significant business partnersdealings with it, to the end that the goodwill and ongoing business of each of them shall be materially unimpaired at the Effective Time;
(b) the Company will not, directly or indirectly, (i) sell, transfer or pledge or agree to sell, transfer or pledge any of the Shares, Preferred Stock or capital stock of any of its Subsidiaries beneficially owned by it; (ii) amend its Articles of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares or Preferred Stock or any outstanding capital stock of any of the Subsidiaries of the Company;
(c) neither the Company nor any of its Subsidiaries Company Subsidiary shall: (i) declareamend its Amended and Restated Certificate of Incorporation or Amended By-Laws or similar organizational documents, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, transfer, pledge, dispose of or encumber any additional shares ofof any class or series of its capital stock or Voting Debt, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire acquire, any shares of, capital stock of any class or series of the Company its capital stock or its Subsidiariesany Voting Debt, other than shares Shares reserved for issuance on the date hereof of this Agreement pursuant to the exercise of Company Options outstanding on the date hereof; of this Agreement or Company Options issued in compliance with this Agreement, (iii) transferdeclare, lease, license, sell, mortgage, pledge, dispose of, set aside or encumber pay any material assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any material indebtedness dividend or other liability; distribution payable in cash, stock or property with respect to any shares of any class or series of its capital stock, (iv) split, combine or reclassify any outstanding shares of any class or series of its stock or (ivv) redeem, purchase or otherwise acquire directly or indirectly any shares of any class or series of its capital stock, or any instrument or security which consists of or includes a right to acquire such shares;
(dc) neither the Company nor any of its Subsidiaries shall: (i) grant any increase in the compensation payable or to become payable by the Company or any of its Subsidiaries to any of its employees; (ii) (A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under any existing, bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company or any its Subsidiaries;
(e) neither the Company nor any of its Subsidiaries Subsidiary shall materially modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims thereunderclaims, except in the ordinary course of business and consistent with past practice;
(fd) neither the Company nor any of its Subsidiaries Company Subsidiary shall permit any material insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to Parent;
(g) neither the Company nor any of its Subsidiaries shall: (i) incur or assume any long-term debt debt, or except in the ordinary course of business, incur or assume any short-term indebtednessindebtedness in excess of $500,000; (ii) materially modify the terms of any indebtedness or other liability, other than modifications of short term debt in the ordinary and usual course of business and consistent with past practice; (iii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other personPerson in excess of $500,000, except as described in SECTION 6.1(d) OF THE COMPANY DISCLOSURE LETTER as being in the ordinary course of business and consistent with past practicebusiness; (iiiiv) make any loansloan, advances advance or capital contributions contribution to, or investments investment in, any other person Person (other than to or in wholly owned Subsidiaries Company Subsidiaries) in excess of the Company or customary loans or advances to employees in accordance with past practice)$500,000; or (ivv) enter into any material commitment or transaction (including, but not limited to, including any borrowing, capital expenditure or purchase, sale or lease of assets or real estate) requiring payments in excess of $500,000;
(e) neither the Company nor any Company Subsidiary shall transfer, lease, license, sell or dispose of any assets except for (i) sales of assets pursuant to existing contracts or commitments in the ordinary and usual course of business and (ii) dispositions of useless or worthless assets;
(f) except as otherwise specifically provided in this Agreement or in the Schedule 14D-9, make or offer to make any material change in the compensation payable or to become payable to any of its officers, directors, employees, agents or consultants (other than normal recurring increases in wages to employees who are not officers or directors or Affiliates in the ordinary course of business and consistent with past practice) or to Persons providing management services, or enter into or amend any material employment, severance, consulting, termination or other agreement or employee benefit plan or make any loans to any of its officers, directors, employees, Affiliates, agents or consultants or make any material change in its existing borrowing or lending arrangements for or on behalf of any of such Persons pursuant to an employee benefit plan or otherwise; or
(g) except as otherwise contemplated by this Agreement or by the Schedule 14D-9 or as specifically set forth in SECTION 6.1(g) OF THE COMPANY DISCLOSURE LETTER, (i) pay or make any accrual or arrangement for payment of any pension, retirement allowance or other employee benefit pursuant to any existing plan, agreement or arrangement to any officer, director, employee or Affiliate (except for payments and accruals made in the ordinary course of business and consistent with past practice), (ii) pay, offer to pay or agree to pay or make any accrual or arrangement for payment to any officers, directors, employees or Affiliates of the Company or any Company Subsidiary of any amount relating to unused vacation days in excess of $50,000 (except payments and accruals made in the ordinary course of business consistent with past practice), (iii) adopt or pay, grant, issue, accelerate or accrue salary or other payments or benefits in excess of $50,000 pursuant to any pension, profit-sharing, bonus, extra compensation, incentive, deferred compensation, stock purchase, stock option, stock appreciation right, group insurance, severance pay, retirement or other employee benefit plan, agreement or arrangement, or any employment or consulting agreement with or for the benefit of any director, officer, employee, agent or consultant, whether past or present, or amend in any material respect any such existing plan, agreement or arrangement in a manner inconsistent with the foregoing;
(h) neither the Company nor any Company Subsidiary shall exercise its discretion or otherwise voluntarily accelerate the vesting of its Subsidiaries shall change any Company Stock Option as a result of the accounting methods used by it unless required by GAAPMerger, any other "change in control" of the Company (as defined in the Company Benefit Plans) or otherwise;
(i) neither the Company nor any Company Subsidiary shall revalue in any material respect any of its Subsidiaries assets, including writing down the value of inventory or writing-off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP;
(j) neither the Company nor any Company Subsidiary shall permit any material insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to and the prior consent of Parent, except policies providing coverage for losses not in excess of fifty thousand dollars ($50,000);
(k) neither the Company nor any Company Subsidiary shall settle or compromise any pending or threatened suit, action or claim that relates to the transactions contemplated hereby, except to the extent the amount of any such settlement or compromise has been reserved for on the Financial Statements contained in any Company SEC Documents or could not reasonably be expected to have a Company Material Adverse Effect;
(l) neither the Company nor any Company Subsidiary shall pay, purchase, discharge or satisfy any of its claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise)) in excess of $250,000, other than the payment, discharge or satisfaction in the ordinary course of any such business and consistent with past practice, of claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (Financial Statements or the notes thereto) of the Company and its consolidated Subsidiariesas required by all applicable law;
(jm) neither the Company nor any of its Subsidiaries Company Subsidiary will adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries Company Subsidiary (other than the Merger);
(kn) neither the Company nor any Company Subsidiary will (i) change any of its Subsidiaries the accounting methods used by it unless required by GAAP or (ii) make any material election relating to Taxes, change any material election relating to Taxes already made, adopt any material accounting method relating to Taxes, change any material accounting method relating to Taxes unless required by GAAP or change in the Internal Revenue Code or the regulations under the Internal Revenue Code, enter into any closing agreement relating to Taxes, settle any claim or assessment relating to Taxes or consent to any claim or assessment relating to Taxes or any waiver of the statute of limitations for any such claim or assessment;
(o) neither the Company nor any Company Subsidiary will take, or agree to commit to take, any action that would be reasonably likely to result in any of the conditions to the Offer set forth in Appendix A to this Agreement or any of the conditions set forth in ARTICLE 7 not being satisfied, or would make any representation or warranty of the Company contained herein, in the case of any representation or warranty not qualified by materiality, materially inaccurate or, in the case of any other representation or warranty, this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company, Parent, Purchaser or the holders of Shares to consummate the Offer or the Merger in accordance with the terms thereof or materially delay such consummation;
(p) the Company shall not permit its plan administrator or similar Person or body to cause any outstanding Company Option to terminate in connection with any of the Transactions; and
(lq) neither the Company nor any of its Subsidiaries Company Subsidiary will enter into an agreement, contract, commitment commitment, understanding or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoingforegoing (and the Company shall use all reasonable efforts not to take any action that would make any of the representations or warranties of the Company contained in this Agreement untrue or incorrect).
Appears in 2 contracts
Samples: Merger Agreement (Convergent Holding Corp), Merger Agreement (Convergent Holding Corp)
Interim Operations of the Company. The Company covenants and agrees that, except (i) as expressly contemplated by this Agreement, (ii) as set forth disclosed in Section 5.1 of the Company's Company Disclosure Schedule or (iii) as agreed in writing by Parent, after the date hereof, and prior to the time the designees directors of the Purchaser have been elected to, and shall constitute a majority of, the Board of Directors of the Company pursuant to Section 1.3 1.03 (the "Appointment Election Date"):
(a) the business of the Company and its Subsidiaries shall be conducted only in the ordinary and usual course of business, consistent with past practices and, to the extent consistent therewith, each of the Company and its Subsidiaries shall use its commercially reasonable best efforts to preserve its business organization intact and maintain its existing relations with customers, supplierssuppliers and other third parties, employeesand to keep available the services of their present officers, creditors employees and business partnersassociates;
(b) each of the Company and its Subsidiaries will not, directly or indirectly, (i) sell, transfer amend or pledge or agree propose any change to sell, transfer or pledge any of the Shares, Preferred Stock or capital stock of any of its Subsidiaries beneficially owned by it; (ii) amend its Articles Certificate of Incorporation or Bylaws By-laws or similar organizational documents; documents or (iiiii) split, combine or reclassify the outstanding Shares or Preferred Stock or any its outstanding capital stock of any of the Subsidiaries of the Companystock;
(c) neither the Company nor any of its Subsidiaries shall: (i) declare, set aside or pay any dividend or other distribution (whether payable in cash, stock or property or any combination thereof) with respect to its capital stockstock (other than cash dividends from any wholly-owned Subsidiary of the Company to the Company or any other Subsidiary of the Company all of the capital stock of which is owned directly or indirectly by the Company); (ii) issue, sell, pledge, dispose of issue or encumber sell any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire acquire, any shares of, of capital stock of any class of the Company or its Subsidiaries, other than shares reserved for issuance on the date hereof issuances pursuant to the exercise of Options outstanding on the date hereofhereof and disclosed on Schedule 3.02
(a) hereto or conversion of Class A Shares into Common Shares in accordance with the terms thereof; (iii) transfersell, lease, license, sell, mortgage, pledge, license (subject to the further restrictions of paragraph (vi) hereof) or dispose of, of any assets or encumber any material assets properties other than in the ordinary and usual course of business and consistent with past practicepractices which individually or in the aggregate are in an amount in excess of $500,000; (iv) incur, or incur assume, prepay or modify any material indebtedness debt, other than in the ordinary course of business consistent with past practices; (v) license or other liabilitysublicense (in each case subject to the further restrictions of paragraph (vi) hereof) any asset or property of the Company or any Subsidiary of the Company except in the ordinary course of business consistent with past practice on a basis that results in a positive current royalty net of any royalties due by the Company or any Subsidiary on account of sales by the licensee or sublicensee; (vi) license or sublicense any Intellectual Property of the Company or any Subsidiary; or (ivvii) redeem, purchase or otherwise acquire acquire, directly or indirectly indirectly, any of its or its Subsidiaries' capital stockstock (except as contemplated by any employee benefit or stock plans or any employment or severance agreement as in effect on the date hereof);
(d) neither the Company nor any of its Subsidiaries shall: shall acquire (iby merger, consolidation or acquisition of stock or assets) grant any increase in the compensation payable or to become payable by the Company or any of its Subsidiaries to any of its employees; (ii) (A) adopt any newcorporation, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under any existing, bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement partnership or other employee benefit plan agreement business organization or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company or any its Subsidiariesdivision thereof;
(e) neither the Company nor any of its Subsidiaries shall modifymake any investment other than in readily marketable securities in an amount in excess of $500,000 in the aggregate whether by purchase of stock or securities, amend contributions to capital or terminate any of its material contracts or waive, release or assign any material rights or claims thereunderproperty transfer;
(f) neither the Company nor any of its Subsidiaries shall permit waive, release, grant, or transfer any rights of value material insurance policy naming it to the Company and its Subsidiaries taken as a beneficiary or a loss payable payee to be cancelled or terminated without notice to Parentwhole;
(g) neither the Company nor any of its Subsidiaries shall, except as may be required or contemplated by this Agreement or by applicable law, (i) enter into, adopt, materially amend or terminate any Benefit Plans, (ii) enter into or amend any retention plan or stay bonus arrangement, employment or severance agreement, (iii) increase in any manner the compensation or other benefits of its officers or directors or (iv) increase in any manner the compensation or other benefits of any other employees (except, in the case of this clause (iv), for normal increases in the ordinary course of business, consistent with past practices);
(h) neither the Company nor any of its Subsidiaries shall: (i) incur or assume any long-term debt or any short-term indebtedness; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other personperson (other than Subsidiaries of the Company), except pursuant to contractual indemnification agreements entered into in the ordinary course of business and business, consistent with past practicepractices; (iiiii) make any loans, advances or capital contributions to, or investments in, any other person (other than to wholly owned Subsidiaries of the Company or customary loans or and payroll, travel and similar advances to employees made in accordance the ordinary course of business consistent with past practicepractices); (iii) revalue in any material respect any of its assets, including, without limitation, writing down the value of inventory in any material manner or write-off of notes or accounts receivable in any material manner; or (iv) enter into any material commitment authorize or transaction (including, but not limited to, any borrowing, make capital expenditure expenditures which exceed $2,500,000 individually or purchase, sale or lease of assets or real estate);
(h) neither $20,000,000 in the Company nor any of its Subsidiaries shall change any of the accounting methods used by it unless required by GAAPaggregate;
(i) neither the Company nor any of its Subsidiaries shall pay, discharge or satisfy any material claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), ) other than the payment, discharge or satisfaction in the ordinary course of any such claimsbusiness, consistent with past practices, of liabilities or obligations reflected or reserved against in, or contemplated by, in the consolidated financial statements (or the notes thereto) of the Company and its consolidated Subsidiariesor incurred since the most recent date thereof pursuant to an agreement or transaction described in this Agreement (including the schedules hereto) or incurred in the ordinary course of business, consistent with past practices;
(j) neither the Company nor any of its Subsidiaries will adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization shall change in any material respect any of the Company accounting methods, principles, policies or any of its Subsidiaries (other than the Merger)procedures used by it unless required by GAAP or applicable law;
(k) the Company will not amend, modify or terminate any Material Agreement or enter into any new agreement material to the business of the Company, other than in the ordinary course of business consistent with past practices or with the prior written consent of Parent, which consent shall not be unreasonably withheld;
(l) neither the Company nor any Subsidiary will amend or modify any existing Affiliate Transaction or enter into any new Affiliate Transaction other than with the prior written consent of Parent;
(m) neither the Company nor any of its Subsidiaries will take, take or agree to commit to take, take any action that would make any representation or warranty of the Company contained herein, in the case of any representation or warranty not qualified by materiality, materially inaccurate or, in the case of any other representation or warranty, hereunder inaccurate in any respect at, or as of any time prior to, the Effective TimeElection Date; and
(ln) neither the Company nor any of its Subsidiaries will authorize or enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention agreement to do any of the foregoing.
Appears in 2 contracts
Samples: Merger Agreement (Berg Acquisition Co), Merger Agreement (Berg Acquisition Co)
Interim Operations of the Company. The Company covenants and agrees that, except (i) as expressly contemplated by provided in this Agreement, Agreement or (ii) as set forth in Section 5.1 with the prior written consent of the Company's Disclosure Schedule or (iii) as agreed in writing by Parent, after the date hereof, hereof and prior to the time the designees of the Purchaser have been elected to, and shall constitute a majority of, the Board of Directors of the Company pursuant to Section 1.3 (the "Appointment Date"):Effective Time:
(a) the business of the Company and its Subsidiaries shall will be conducted only in the ordinary and usual customary course and, to the extent consistent therewith, with past practice and each of the Company and its Subsidiaries shall use its commercially reasonable best efforts to preserve its business organization intact and maintain its existing relations with customers, suppliers, employees, creditors and business partners;
(b) the Company will not, directly or indirectly, (i) sell, transfer or pledge or agree to sell, transfer or pledge any of the Shares, Preferred Stock or capital stock of any of its Subsidiaries beneficially owned by it; (ii) amend its Articles of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares or Preferred Stock Company Common Stock, or any outstanding capital stock of any of the Subsidiaries of the Company;
(c) neither the Company nor any of its Subsidiaries shall: shall (i) amend its certificate of incorporation or by-laws or similar organizational documents; (ii) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (iiiii) issue, sell, transfer, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire acquire, any shares of, of capital stock of any class of the Company or its Subsidiaries, other than shares reserved for issuance on the date hereof issuances pursuant to the exercise of Company Options outstanding on the date hereof, in accordance with their present terms and the grant of options to purchase Company Common Stock to new non-executive level employees consistent with past practices; (iiiiv) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any material assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any material indebtedness or other liability; or (ivv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock;
(d) neither the Company nor any of its Subsidiaries shall: shall (i) grant any increase in the compensation payable or to become payable by the Company or any of its Subsidiaries to any of its officers, directors, employees, agents or consultants (other than increases for non-executive level employees in the ordinary course of not more than 10%); (ii) (A) adopt or enter into any newnew plan, policy, agreement or arrangement that would constitute a Company Benefit Plan, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under any existing, bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan agreement or arrangementexisting Company Benefit Plan; or (iii) enter into any, or amend any existing, employment or severance agreement with or, except in accordance with the existing written policies of the CompanyCompany previously delivered to Parent, grant any severance or termination pay to any officer, director or employee of the Company or any of its Subsidiaries; or (iv) make any loans to any of its officers, directors, employees, agents or consultants or make any changes in its existing borrowing or lending arrangements for or on behalf of any of such persons, whether contingent on the Merger or otherwise;
(e) neither the Company nor any of its Subsidiaries shall modify, amend or terminate any of its material contracts the Company Agreements or waive, release or assign any material rights or claims thereunderclaims, except in the ordinary course of business and consistent with past practice;
(f) neither the Company nor any of and its Subsidiaries shall permit use commercially reasonable efforts to prevent any material insurance policy naming it as a beneficiary or a loss payable payee to be cancelled canceled or terminated without notice to Parent, except in the ordinary course of business and consistent with past practice; (g) neither the Company nor any of its Subsidiaries shall license or otherwise transfer, dispose of, permit to lapse or otherwise fail to preserve any of the Company's or any of its Subsidiaries' Intellectual Property Rights, or dispose of or disclose to any person who has not entered into a confidentiality agreement any trade secret, formula, process or know-how not theretofore a matter of public knowledge, except in the ordinary course of business and consistent with past practice;
(gh) neither the Company nor any of its Subsidiaries shall cancel any debts or waive, release or relinquish any contract rights or other rights of substantial value, except settlements of accounts receivable in the ordinary course of business and consistent with past practice;
(i) neither the Company nor any of its Subsidiaries shall: (i) incur or assume any long-term debt except for amounts set forth in the Company's budget previously delivered to Parent and, except in the ordinary course of business consistent with past practice, incur or assume any short-term indebtednessindebtedness in amounts not consistent with past practice; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person, except in the ordinary course of business and consistent with past practice; (iii) make any loans, advances or capital contributions to, or investments in, any other person (other than to wholly owned Subsidiaries of the Company or customary loans or advances to employees for travel and business expenses in accordance the ordinary course of business and consistent with past practice); or (iv) enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate)assets) other than capital expenditures pursuant to the Company's capital expenditures budget previously delivered to Parent and other capital expenditures that do not exceed $50,000 in the aggregate since September 30, 1999;
(hj) neither the Company nor any of its it s Subsidiaries shall (i) change any of the accounting methods principles used by it unless required by GAAP; (ii) take or allow to be taken any action which would jeopardize the treatment of Parent's business combination with the Company as a pooling of interests for accounting purposes; or (iii) take or allow to be taken any action which would jeopardize qualification of the Merger as a reorganization within the meaning of Section 368(a) of the Code;
(ik) neither the Company nor any of its Subsidiaries shall pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations (i) in the ordinary course of business and consistent with past practice, or claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company and its consolidated Subsidiaries, (ii) incurred in the ordinary course of business and consistent with past practice or (iii) which are legally required to be paid, discharged or satisfied (provided that if such claims, liabilities or obligations referred to in this clause (iii) are legally required to be paid and are also not otherwise payable in accordance with clauses (i) or (ii) above, the Company will notify Parent in writing if such claims, liabilities or obligations exceed, individually or in the aggregate, $50,000 in value, reasonably in advance of their payment);
(jl) neither the Company nor any of its Subsidiaries will adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries or any agreement relating to an Alternative Transaction (other than the Mergeras defined in Section 5.7(a) hereof);
(km) neither the Company nor any of its Subsidiaries will take, or agree to commit to take, any action that would make any representation or warranty of the Company contained herein, in the case of any representation or warranty not qualified by materiality, materially inaccurate or, in the case of any other representation or warranty, herein inaccurate in any respect at, or as of any time prior to, the Effective Time;
(n) neither the Company nor any of its Subsidiaries will voluntarily make or agree to make any changes in Tax accounting methods, waive or consent to the extension of any statute of limitations with respect to Taxes, or consent to any assessment of Taxes, or settle any judicial or administrative proceeding affecting Taxes; and
(lo) neither the Company nor any of its Subsidiaries will enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.
Appears in 2 contracts
Samples: Merger Agreement (Tumbleweed Communications Corp), Merger Agreement (Tumbleweed Communications Corp)
Interim Operations of the Company. The Company covenants and agrees that, except (i) as expressly contemplated or permitted by this Agreement, (ii) as Agreement or set forth in Section 5.1 of the Company's Company Disclosure Schedule or (iii) as agreed in writing by ParentSchedule, after the date hereof, and prior to the earlier of (x) the termination of this Agreement in accordance with Article VIII and (y) the time the designees of the Purchaser have been elected to, and shall Parent constitute a majority of, the Board of Directors of the Company pursuant to Section 1.3 (the "Appointment Date"):Board of Directors:
(a) the business of the Company and its the Company Subsidiaries shall be conducted only in the ordinary course of business consistent with past practice, and usual course and, to the extent consistent therewith, each of the Company and its the Company Subsidiaries shall use its commercially reasonable best efforts to preserve its present business organization intact intact, to keep available the services of its current officers, employees and consultants, and to maintain its existing reasonably good relations with customers, suppliers, employees, creditors contractors, distributors and others having business partnersdealings with it;
(b) neither the Company will notnor any Company Subsidiary shall, (i) directly or indirectly, (i) except with respect to the Company, for the issuance of Shares upon the exercise of the Options outstanding on the date hereof pursuant to the terms of such Options, issue, sell, transfer or pledge or agree to selltransfer, transfer dispose of, encumber or pledge any shares of the Shares, Preferred Stock or capital stock of the Company or any capital stock or other equity interests of its Subsidiaries beneficially owned by itany Company Subsidiary, securities convertible into or exchangeable for, or options, warrants or rights of any kind to acquire any shares of such capital stock or other equity interests or any other ownership interest; (ii) amend or otherwise change its Articles Certificate of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine combine, reclassify, subdivide or reclassify the outstanding Shares redeem, or Preferred Stock purchase or any outstanding capital stock of any of the Subsidiaries of the Company;
(c) neither the Company nor otherwise acquire, directly or indirectly, any of its Subsidiaries shall: capital stock or other equity interests; or (iiv) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire any shares of, capital stock of any class of the Company or its Subsidiaries, other than shares reserved for issuance on the date hereof pursuant to the exercise of Options outstanding on the date hereof; (iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any material assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any material indebtedness or other liability; or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock;
(dc) neither the Company nor any of its Subsidiaries shall: (i) grant any increase in the compensation payable or to become payable by the Company or any of its Subsidiaries to any of its employees; (ii) (A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under any existing, bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company or any its Subsidiaries;
(e) neither the Company nor any of its Subsidiaries shall modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims thereunder;
(f) neither the Company nor any of its Subsidiaries shall permit any material insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to Parent;
(g) neither the Company nor any of its Subsidiaries shall: Subsidiary will (i) incur or assume indebtedness (which shall not include trade payables) (except for indebtedness for working capital incurred under the revolving portion of Company’s existing credit facility in the ordinary course of business with the aggregate amount of such indebtedness not to exceed $26,500,000 at any long-term one time) or issue any debt or any short-term indebtednesssecurities; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person, except in the ordinary course of business and consistent with past practicePerson (other than a Company Subsidiary); (iii) make any loans, advances or capital contributions to, or investments in, any other person Person (other than to wholly owned Subsidiaries of the Company or customary loans any Company Subsidiary); (iv) acquire (by merger, consolidation, acquisition of stock or advances to employees assets or otherwise) any corporation, partnership or other business organization or division thereof or any equity interest therein; (v) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any of its material assets or properties, other than in accordance the ordinary course of business consistent with past practice;
(d) neither the Company nor any Company Subsidiary shall (i) change the compensation or benefits payable or to become payable to any of its officers, directors, employees agents or consultants (other than as required by any collective bargaining agreement); (ii) enter into or amend any employment, severance, consulting, termination or other agreement related to employment or employee benefit plan (except as required by law); or (iviii) make any loans to any of its officers, directors, employees, agents, consultants or affiliates or change its existing borrowing or lending arrangements for or on behalf of any of such persons pursuant to an employee benefit plan or otherwise;
(e) neither the Company nor any Company Subsidiary shall (i) pay or arrange for payment of any pension, retirement allowance or other employee benefit pursuant to any existing plan, agreement or arrangement to any officer, director, employee or affiliate or pay or make any arrangement for payment to any officers, directors, employees or affiliates of the Company of any amount relating to unused vacation days, except payments and accruals made in the ordinary course of business consistent with past practice; (ii) except as may be required pursuant to the terms of a Plan or agreement as in effect as of the date of this Agreement, adopt or pay, grant, issue, accelerate or accrue salary or other payments or benefits pursuant to any pension, profit-sharing, bonus, extra compensation, incentive, deferred compensation, stock purchase, stock option, stock appreciation right, group insurance, severance pay, retirement or other employee benefit plan, agreement or arrangement, or any employment or consulting agreement with or for the benefit of any director, officer or employee, whether past or present, or (iii) amend in any material respect any such existing Plan, agreement or arrangement;
(f) neither the Company nor any Company Subsidiary will, (i) modify or amend in any material respect or terminate any material Contract to which the Company or any Company Subsidiary is a party or by which any of them or any of their respective properties or assets may be bound; (ii) waive, release or assign any material rights or claims under any of such material Contracts; or (iii) enter into any material commitment Contract;
(g) neither the Company nor any Company Subsidiary will (i) change any of the accounting methods used by it except for such changes required by GAAP, (ii) make any Tax election or transaction change any Tax election already made, adopt any Tax accounting method, (includingiii) change any Tax accounting method, but not limited to, enter into any borrowing, capital expenditure closing agreement or purchase, sale (iv) settle any claim or lease assessment relating to Taxes or consent to any claim or assessment relating to Taxes or any waiver of assets the statute of limitations for any such claim or real estate)assessment;
(h) neither the Company nor any of its Subsidiaries shall change any of the accounting methods used by it unless required by GAAP;
(i) neither the Company nor any of its Subsidiaries shall Subsidiary will pay, discharge or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations, in the ordinary course of business consistent with past practice, or of claims, liabilities or obligations reflected or reserved against in, or contemplated by, in the consolidated financial statements (or the notes thereto) Financial Statements of the Company and its consolidated Subsidiariesfor the period ended May 31, 2003 or incurred since May 31, 2003 in the ordinary course of business consistent with past practice;
(i) neither the Company nor any Company Subsidiary will (i) settle or commence any action, suit, claim, litigation or other proceeding involving an amount in excess of $50,000 or, in the aggregate, an amount in excess of $250,000 or (ii) enter into any consent decree, injunction or other similar restraint or form of equitable relief in settlement of any action, suit, claim, litigation or other proceeding;
(j) neither the Company nor any of its Subsidiaries Company Subsidiary will adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries Company Subsidiary (other than than, with respect to the Company, the Merger);
(k) neither the Company nor any of its Subsidiaries Company Subsidiary will take, or agree to commit to take, take any action that would make reasonably be expected to result in any representation of the conditions to the Merger set forth in Article VII or warranty any of the conditions to the Offer set forth in Annex I not being satisfied or that would reasonably be expected to materially delay the consummation of, or materially impair the ability of the Company contained herein, in the case of any representation or warranty not qualified by materiality, materially inaccurate or, in the case of any other representation or warranty, inaccurate in any respect at, or as of any time prior toto consummate, the Effective Time; andTransactions in accordance with the terms hereof;
(l) neither the Company nor any Company Subsidiary shall make any capital expenditure which (i) exceeds $30,000 in the aggregate for the remainder of its Subsidiaries the fiscal year 2003 or (ii) is not in all material respects in accordance with the annual budget for the fiscal year 2004, a true and correct copy of which is attached to Section 5.1(l) of the Company Disclosure Schedule; and
(m) neither the Company nor any Company Subsidiary will enter into an any agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.
Appears in 2 contracts
Samples: Merger Agreement (Dmi Furniture Inc), Merger Agreement (Flexsteel Industries Inc)
Interim Operations of the Company. The Company covenants --------------------------------- and agrees thatthat prior to the Effective Time, except (i) as expressly contemplated by this Agreement, (ii) as set forth in Section 5.1 of the Company's Disclosure Schedule Schedule, or (iii) as agreed in writing by Parent, after the date hereof, and prior to the time the designees of the Purchaser have been elected to, and shall constitute a majority of, the Board of Directors of the Company pursuant to Section 1.3 (the "Appointment Date")::
(a) the business of the Company and its Subsidiaries shall be conducted only in the usual, regular and ordinary course and usual course andsubstantially in the same manner as heretofore conducted, to the extent consistent therewith, and each of the Company and its Subsidiaries shall use its commercially reasonable best efforts to preserve its business organization intact intact, keep available the services of its current officers and employees and maintain its existing relations with franchisees, customers, suppliers, employeescreditors, creditors business partners and others having business partnersdealings with it, to the end that the goodwill and ongoing business of each of them shall be unimpaired at the Effective Time;
(b) the Company will shall not, directly or indirectly, : (i) sell, transfer or pledge or agree to sell, transfer or pledge any of the Shares, Preferred Stock or capital stock of any of its Subsidiaries beneficially owned by it; (ii) amend its Articles articles of Incorporation incorporation or Bylaws by-laws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares or Preferred Stock or any outstanding capital stock of any of the Subsidiaries of the Company;
(c) neither the Company nor any of its Subsidiaries shall: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, transfer, pledge, dispose of or encumber any additional shares ofof any class or series of its capital stock or Voting Debt, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire acquire, any shares of, capital stock of any class or series of the Company its capital stock or its Subsidiariesany Voting Debt, other than shares Shares reserved for issuance on the date hereof pursuant to the exercise of Company Options outstanding on the date hereof; , (iii) transferdeclare, leaseset aside or pay any dividend or other distribution payable in cash, licensestock or property with respect to any shares of any class or series of its capital stock; (iv) split, sellcombine or reclassify any shares of any class or series of its stock; or (v) redeem, mortgage, pledge, dispose ofpurchase or otherwise acquire directly or indirectly any shares of any class or series of its capital stock, or encumber any material assets instrument or security which consists of or includes a right to acquire such shares;
(c) the Company shall not: (i) incur or modify any indebtedness or other liability, other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any material indebtedness or other liability; or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock;
(d) neither the Company nor any of its Subsidiaries shall: (i) grant any increase in the compensation payable or to become payable by the Company or any of its Subsidiaries to any of its employees; (ii) (A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under any existing, bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company or any its Subsidiaries;
(e) neither the Company nor any of its Subsidiaries shall modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims thereunderclaims, except in the ordinary course of business and consistent with past practice;
(fd) neither the Company nor any of its Subsidiaries shall permit any material insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to Parent;
(g) neither the Company nor any of its Subsidiaries shallnot: (i) incur or assume any long-term debt debt, or except in the ordinary course of business, incur or assume any short-short- term indebtednessindebtedness in amounts not consistent with past practice; (ii) modify the terms of any indebtedness or other liability; (iii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person, except as described in the Disclosure Schedule as being in the ordinary course of business and consistent with past practice; (iiiiv) make any loans, advances or capital contributions to, or investments in, any other person (other than to wholly owned Subsidiaries of the Company or customary loans or advances to employees in accordance with past practice)other; or (ivv) enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate);
(he) neither the Company nor shall not transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any assets other than in the ordinary and usual course of business and consistent with past practice; or
(f) except as otherwise specifically provided in this Agreement or in the Schedule 14D-9, make any change in the compensation payable or to become payable to any of its Subsidiaries shall change officers, directors, employees, agents or consultants (other than normal recurring increases in wages to employees who are not officers or directors or Affiliates in the ordinary course of business consistent with past practice) or to Persons providing management services, or enter into or amend any employment, severance, consulting, termination or other agreement or employee benefit plan or make any loans to any of its officers, directors, employees, Affiliates, agents or consultants or make any change in its existing borrowing or lending arrangements for or on behalf of any of such Persons pursuant to an employee benefit plan or otherwise;
(g) except as otherwise specifically contemplated by this Agreement or by the accounting methods used by Schedule 14D-9 or as specifically set forth in the Disclosure Schedule, pay or make any accrual or arrangement for payment of any pension, retirement allowance or other employee benefit pursuant to any existing plan, agreement or arrangement to any officer, director, employee or Affiliate or pay or agree to pay or make any accrual or arrangement for payment to any officers, directors, employees or Affiliates of the Company of any amount relating to unused vacation days, except payments and accruals made in the ordinary course of business consistent with past practice; adopt or pay, grant, issue, accelerate or accrue salary or other payments or benefits pursuant to any pension, profit-sharing, bonus, extra compensation, incentive, deferred compensation, stock purchase, stock option, stock appreciation right, group insurance, severance pay, retirement or other employee benefit plan, agreement or arrangement, or any employment or consulting agreement with or for the benefit of any director, officer, employee, agent or consultant, whether past or present; or amend in any material respect any such existing plan, agreement or arrangement in a manner inconsistent with the foregoing;
(h) the Company shall not permit any insurance policy naming it unless required by GAAPas a beneficiary or a loss payable payee to be cancelled or terminated without notice to Parent;
(i) neither the Company nor shall not enter into any contract or transaction relating to the purchase of its Subsidiaries assets other than in the ordinary course of business consistent with prior practices;
(j) the Company shall not pay, repurchase, discharge or satisfy any of its claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of any such business and consistent with past practice, of claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company and its consolidated SubsidiariesCompany;
(jk) neither the Company nor any of its Subsidiaries will not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than the Merger);
(kl) neither the Company nor will not (i) change any of its Subsidiaries the accounting methods used by it unless required by GAAP or (ii) make any material election relating to Taxes, change any material election relating to Taxes already made, adopt any material accounting method relating to Taxes, change any material accounting method relating to Taxes unless required by GAAP, enter into any closing agreement relating to Taxes, settle any claim or assessment relating to Taxes or consent to any claim or assessment relating to Taxes or any waiver of the statute of limitations for any such claim or assessment;
(m) the Company will not take, or agree to commit to take, any action that would or is reasonably likely to result in any of the conditions to the Offer set forth in Annex A or any of the conditions to the Merger set forth in Article VI not being satisfied, or would make any representation or warranty of the Company contained herein, in the case of any representation or warranty not qualified by materiality, materially inaccurate or, in the case of any other representation or warranty, herein inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company, Parent, Purchaser or the holders of Shares to consummate the Offer or the Merger in accordance with the terms hereof or materially delay such consummation; and
(ln) neither the Company nor any of its Subsidiaries will not enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.
Appears in 2 contracts
Samples: Merger Agreement (Compaq Interests Inc), Merger Agreement (Shopping Com)
Interim Operations of the Company. The Company covenants and agrees that, except (i) as expressly contemplated by this Agreement, (ii) as set forth in Section 5.1 of Agreement or unless the Company's Disclosure Schedule or (iii) as agreed in writing by Company shall have obtained Parent’s prior written consent, after the date hereofof this Agreement, and prior to the time earlier of (x) the designees termination of this Agreement in accordance with ARTICLE VIII and (y) the Purchaser have been elected to, and shall constitute a majority of, the Board of Directors of the Company pursuant to Section 1.3 (the "Appointment Date"):Effective Time:
(a) the business of the Company and its Subsidiaries shall be conducted only in the ordinary course of business consistent with past practice, and usual course and, to the extent consistent therewith, each of the Company shall, and shall cause its Subsidiaries shall to, use its their commercially reasonable best efforts to preserve its their present business organization intact intact, to keep available the services of their current officers, employees and consultants, and to maintain its existing good relations with customers, suppliers, employees, creditors contractors, landlords, franchisees, distributors and others having business partnersdealings with the Company and its Subsidiaries;
(b) the Company will shall not, and shall cause its Subsidiaries not to, (i) directly or indirectly, issue, sell, modify, transfer, dispose of, encumber or pledge any shares of capital stock of the Company or its Subsidiaries, securities convertible into or exchangeable for, or options, warrants or rights of any kind to acquire any shares of such capital stock or other equity interests or any other ownership interest; (ii) amend or otherwise change their certificate of incorporation, bylaws or similar organizational documents; (iii) split, combine, reclassify, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, (i) sell, transfer or pledge or agree to sell, transfer or pledge any of the Shares, Preferred Stock or their capital stock of any of its Subsidiaries beneficially owned by itor other equity interests; (ii) amend its Articles of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares or Preferred Stock or any outstanding capital stock of any of the Subsidiaries of the Company;
(c) neither the Company nor any of its Subsidiaries shall: (iiv) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its their capital stock; (ii) issue, sell, pledge, dispose of stock or encumber any additional shares ofequity interest, or securities convertible into or exchangeable for(v) enter into, or options, warrants, calls, commitments or rights of any kind to acquire any shares of, capital stock of any class of the Company or its Subsidiaries, other than shares reserved for issuance on the date hereof pursuant to the exercise of Options outstanding on the date hereof; (iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any material assets other than in the ordinary and usual course of business and consistent with past practice, or incur amend or modify any material indebtedness shareholder rights agreement, rights plan, “poison pill” or other liability; similar agreement or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stockplan;
(dc) neither the Company nor any of will not, and will cause its Subsidiaries shall: (i) grant any increase in the compensation payable or to become payable by the Company or any of its Subsidiaries to any of its employees; (ii) (A) adopt any newnot to, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under any existing, bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company or any its Subsidiaries;
(e) neither the Company nor any of its Subsidiaries shall modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims thereunder;
(f) neither the Company nor any of its Subsidiaries shall permit any material insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to Parent;
(g) neither the Company nor any of its Subsidiaries shall: (i) incur or assume any long-term indebtedness for borrowed money, indebtedness evidenced by bonds, notes, debentures or similar instruments or letters of credit or bankers’ acceptances, indebtedness representing the deferred and unpaid balance of the purchase price of any property (including capitalized lease obligations), indebtedness under any interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, commodity swap agreement, commodity cap agreement, commodity collar agreement, foreign exchange contract, currency swap agreement or similar agreement providing for the transfer or mitigation of interest rate, commodity price or currency risks either generally or under specific contingencies, or issue any debt or any short-term indebtednesssecurities; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person, except in the ordinary course of business and consistent with past practicePerson; (iii) make any loans, advances or capital contributions to, or investments in, any other person Person; (iv) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or any equity interest therein; or (v) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any assets or properties, other than furniture, fixtures and equipment in the ordinary course of business consistent with past practice;
(d) except as required by the terms of a written Benefit Plan or Employment Agreement or by applicable Law, the Company shall not, and shall cause its Subsidiaries not to, (i) increase the wages, salaries, compensation, pension or other benefits or perquisites payable or provided to wholly owned any of the Company’s or any of its Subsidiaries’ officers, employees, directors, independent contractors or leased personnel; provided, however, that the Company and its Subsidiaries may, in the ordinary course of business, on the anniversary of any hotel employee’s initial employment with the Company or such Subsidiary increase by no more than 3% the salary payable to such hotel employee, (ii) grant or increase any severance, change in control, termination or similar compensation or benefits payable to any, director, officer or employee of the Company or customary loans any of its Subsidiaries, (iii) pay or advances grant any bonus or similar compensation to employees in accordance with past practice); any of the Company’s or any of its Subsidiaries’ officers, employees, directors, independent contractors or leased personnel, (iv) enter into, amend or terminate, any Employment Agreement or Benefit Plan, (v) accelerate the time of payment or vesting of, or the lapsing of restrictions with respect to, or fund or otherwise secure the payment of, any compensation or benefits under any Benefit Plan or Employment Agreement, (vi) enter into, amend, negotiate or terminate any labor agreement, or (vii) terminate the employment of any person who is a party to an Employment Agreement with the Company or any Subsidiary of the Company other than for cause;
(e) the Company will not, and will cause its Subsidiaries not to, (i) modify, extend, amend or terminate any Material Contract to which the Company or any of its Subsidiaries is a party or by which the Company, any of its Subsidiaries or any of their respective properties or assets may be bound; (ii) waive, release or assign any rights or claims under any Material Contract; or (iii) enter into any material commitment or transaction Material Contract;
(includingf) the Company shall not, but and shall cause its Subsidiaries not limited to, except as necessary in the ordinary course of business consistent with past practice, (i) grant or acquire, agree to grant to or acquire from any borrowingPerson any Intellectual Property, capital expenditure or purchasedispose of or permit to lapse any rights to any Company IP, sale (ii) fail to take any action necessary or lease advisable to protect or maintain any Company IP that is material to the conduct of assets the business of the Company or real estate)its Subsidiaries as currently conducted and as planned by the Company or its Subsidiaries to be conducted, including the prosecution of all pending applications for patents and trademarks, the filing of any documents or other information or the payment of any maintenance or other fees related thereto, or (iii) disclose or agree to disclose to any Person, other than Representatives of Merger Sub and Parent, any trade secret or other confidential information;
(g) the Company will not, and will cause its Subsidiaries not to, (i) make, revoke or amend any material Tax election of the Company or any of its Subsidiaries, (ii) file any material amended Tax Return or material claim for refund of the Company or any of its Subsidiaries, (iii) enter into any closing agreement affecting any material Tax liability or refund of the Company or any of its Subsidiaries, (iv) settle or compromise any material Tax liability or refund of the Company or any of its Subsidiaries, or (v) extend or waive the application of any statute of limitations regarding the assessment or collection of any Tax of the Company or any of its Subsidiaries;
(h) neither the Company nor any of will not, and will cause its Subsidiaries shall change not to, (i) settle any Litigation involving an amount in excess of $100,000 or, in the accounting methods used by it unless required by GAAPaggregate, an amount in excess of $100,000 or (ii) enter into any consent decree, injunction or other similar restraint or form of equitable relief in settlement of any Litigation;
(i) neither the Company nor any of will not, and will cause its Subsidiaries shall paynot to, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company and its consolidated Subsidiaries;
(j) neither the Company nor any of its Subsidiaries will adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company;
(j) the Company or any of will not, and will cause its Subsidiaries (other than not to, fail to keep in force insurance policies or replacement or revised provisions providing insurance coverage with respect to the Merger)assets, operations and activities of the Company and its Subsidiaries as are currently in effect;
(k) neither the Company nor any of shall not, and shall cause its Subsidiaries will takenot to, or agree to commit to take, any action that would make any representation or warranty capital expenditure except (x) in accordance with the budget for capital expenditures attached to Section 5.1(k) of the Company contained herein, Disclosure Schedule or (y) for capital expenditures not reflected on such budget but which are reasonably necessary to maintain the hotels operated or managed by the Company in good working order provided the case of any representation or warranty aggregate expenditures under this clause (y) do not qualified by materiality, materially inaccurate or, in the case of any other representation or warranty, inaccurate in any respect at, or as of any time prior to, the Effective Time; andexceed $75,000;
(l) neither the Company nor shall not, and shall cause its Subsidiaries not to, directly or indirectly acquire (x) by merging or consolidating with, or by purchasing assets of, or by any other manner, any division, business or equity interest of any Person (including in a transaction involving a tender or exchange offer, business combination, recapitalization, liquidation, dissolution, joint venture or similar transaction) or (y) except in the ordinary course of business consistent with past practice, any material assets;
(m) the Company shall not make any change in any method of accounting principles, method or practices, except for any such change required by reason of a concurrent change in GAAP or Regulation S-X promulgated under the Exchange Act (as authorized by the Company’s independent auditor);
(n) the Company will not, and will cause its Subsidiaries not to, knowingly take or knowingly omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in ARTICLE VII not being satisfied or that would or would reasonably be expected to materially delay the consummation of, or materially impair the ability of the Company to consummate, the Transactions in accordance with the terms of this Agreement;
(o) the Company will not, and will cause its Subsidiaries will not to, enter into an any agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing. Any consent of Parent under this Section 5.1 shall not be unreasonably withheld, conditioned or delayed provided that the Company has disclosed to Parent all relevant information. Parent’s grant of consent under this Section 5.1 shall not affect whether or not any Change is taken into account when determining whether a Company Material Adverse Effect has occurred or would reasonably be expected to occur.
Appears in 2 contracts
Samples: Purchase Agreement (Hospitality Properties Trust), Merger Agreement (Sonesta International Hotels Corp)
Interim Operations of the Company. The Company covenants and agrees that, except (i) as expressly contemplated by this Agreement, Agreement or (ii) as set forth in Section 5.1 of the Company's Disclosure Schedule or (iii) as agreed in writing by Parent, after the date hereof, and prior to the time the designees of the Purchaser Parent have been elected to, and shall constitute a majority of, the Board of Directors of the Company pursuant to Section 1.3 hereof (the "Appointment Date"):
(a) the business of the Company and its Subsidiaries shall be conducted only in the ordinary and usual course and, to the extent consistent therewith, each of the Company and its Subsidiaries shall use its commercially reasonable best efforts to preserve its business organization intact and maintain its existing relations with customers, suppliers, employees, creditors and business partners;
(b) the Company will not, directly or indirectly, (i) except upon exercise of Warrants or Options or other rights to purchase shares of Common Stock outstanding on the date hereof, issue, sell, transfer or pledge or agree to sell, transfer or pledge any treasury stock of the Shares, Preferred Stock Company or any capital stock of any of its Subsidiaries beneficially owned by it; , (ii) amend its Articles of Incorporation or Bylaws By-laws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares or Preferred Stock or any outstanding capital stock of any of the Subsidiaries of the Company;
(c) neither the Company nor any of its Subsidiaries shall: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire acquire, any shares of, of capital stock of any class of the Company or its Subsidiaries, other than shares Shares reserved for issuance on the date hereof pursuant to the exercise of Warrants or Options outstanding on the date hereof; (iii) transfer, lease, license, sell, mortgage, pledge, sell or dispose ofof any assets, or encumber incur any material assets indebtedness or other liability other than in the ordinary and usual course of business and consistent with past practicebusiness, or incur mortgage, pledge or encumber any assets or modify any material indebtedness or other liabilityindebtedness; or (iv) redeem, purchase or otherwise acquire acquire, directly or indirectly indirectly, any of its capital stock;
(d) neither the Company nor any of its Subsidiaries shall: (i) grant any increase in the compensation payable or to become payable by the Company or any of its Subsidiaries to any of its employees; executive officers or (ii) (Aii)(A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under any existing, existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company or any of its Subsidiaries;
(e) neither the Company nor any of its Subsidiaries shall modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims thereunder;
(f) neither the Company nor any of its Subsidiaries shall permit any material insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to Parent;
(gf) neither the Company nor any of its Subsidiaries shall: (i) incur shall enter into any contract or assume any long-term debt or any short-term indebtedness; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for transaction relating to the obligations purchase of any assets other person, except than in the ordinary course of business and consistent with past practice; (iii) make any loans, advances or capital contributions to, or investments in, any other person (other than to wholly owned Subsidiaries of the Company or customary loans or advances to employees in accordance with past practice); or (iv) enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate)business;
(hg) neither the Company nor any of its Subsidiaries shall change any of the accounting methods used by it unless required by GAAP;
(i) , neither the Company nor any of its Subsidiaries shall paymake any material Tax election, discharge change any material Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required by GAAP, enter into any closing agreement, settle any Tax claim or satisfy assessment or consent to any claims, liabilities Tax claim or obligations (absolute, accrued, asserted assessment or unasserted, contingent or otherwise), other than any waiver of the payment, discharge or satisfaction statute of limitations for any such claims, liabilities claim or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company and its consolidated Subsidiaries;
(j) neither the Company nor any of its Subsidiaries will adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than the Merger);
(k) neither the Company nor any of its Subsidiaries will take, or agree to commit to take, any action that would make any representation or warranty of the Company contained herein, in the case of any representation or warranty not qualified by materiality, materially inaccurate or, in the case of any other representation or warranty, inaccurate in any respect at, or as of any time prior to, the Effective Timeassessment; and
(lh) neither the Company nor any of its Subsidiaries will enter into an agreement, contract, commitment any agreement with respect to the foregoing or arrangement to do take any action with the intent of causing any of the foregoing, or conditions to authorize, recommend, propose or announce an intention the Offer set forth in Annex A not to do any of the foregoingbe satisfied.
Appears in 2 contracts
Samples: Merger Agreement (Communications Central Inc), Merger Agreement (Phonetel Technologies Inc)
Interim Operations of the Company. The Company covenants and agrees thatthat prior to the Effective Date, except (i) as expressly contemplated by this AgreementAgreement or the Related Agreements, (ii) as set forth in Section 5.1 8.1 of the Company's Disclosure Schedule Schedule, or (iii) as agreed in writing by Parent, Parent after the date hereof, and prior to the time the designees of the Purchaser have been elected to, and shall constitute a majority of, the Board of Directors of the Company pursuant to Section 1.3 (the "Appointment Date"):this Agreement:
(a) the business of the Company and its the Company Subsidiaries shall be conducted only in the usual, regular and ordinary course and usual course andsubstantially in the same manner as previously conducted, to the extent consistent therewith, and each of the Company and its the Company Subsidiaries shall use its all commercially reasonable best efforts to preserve its business organization intact intact, keep available the services of its current officers and employees and maintain its existing relations with customersPersons having business dealings with it, suppliers, employees, creditors to the end that the goodwill and ongoing business partnersof each of them shall be unimpaired at the Effective Time;
(b) neither the Company will not, directly or indirectly, nor any Company Subsidiary shall: (i) sell, transfer or pledge or agree to sell, transfer or pledge any of the Shares, Preferred Stock or capital stock of any of its Subsidiaries beneficially owned by it; (ii) amend its Articles of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares or Preferred Stock or any outstanding capital stock of any of the Subsidiaries of the Company;
(c) neither the Company nor any of its Subsidiaries shall: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, transfer, pledge, dispose of or encumber any additional shares ofof any class or series of its capital stock or Voting Debt, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire acquire, any shares of, capital stock of any class or series of the Company its capital stock or its Subsidiariesany Voting Debt, other than shares Shares reserved for issuance on the date hereof of this Agreement pursuant to the exercise of Company Stock Options outstanding on the date hereof or the conversion of Company Preferred Stock outstanding on the date hereof, (iii) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to any shares of any class or series of its capital stock except in connection with the conversion of Company Preferred Stock outstanding on the date hereof; (iiiiv) transfersplit, leasecombine or reclassify any shares of any class or series of its stock; or (v) redeem, license, sell, mortgage, pledge, dispose ofpurchase or otherwise acquire directly or indirectly any shares of any class or series of its capital stock, or encumber any material assets instrument or security which consists of or includes a right to acquire such shares except in connection with the conversion of Company Preferred Stock outstanding on the date hereof;
(c) neither the Company nor any Company Subsidiary shall: (i) incur or modify any indebtedness or other liability, other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any material indebtedness or other liability; or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock;
(d) neither the Company nor any of its Subsidiaries shall: (i) grant any increase in the compensation payable or to become payable by the Company or any of its Subsidiaries to any of its employees; (ii) (A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under any existing, bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company or any its Subsidiaries;
(e) neither the Company nor any of its Subsidiaries shall modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims thereunderclaims, except in the ordinary course of business and consistent with past practice;
(fd) neither the Company nor any of its Subsidiaries shall permit any material insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to Parent;
(g) neither the Company nor any of its Subsidiaries Subsidiary shall: (i) incur or assume any long-term debt debt, or except in the ordinary course of business, incur or assume any short-term indebtednessindebtedness in amounts not consistent with past practice; (ii) modify the terms of any indebtedness or other liability, other than modifications of short term debt in the ordinary and usual course of business and consistent with past practice; (iii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person, except in the ordinary course of business and consistent with past practice; (iiiiv) make any loans, advances or capital contributions to, or investments in, any other person (other than to or in wholly owned Subsidiaries of the Company or customary loans or advances to employees Company) except in accordance the ordinary course of business and consistent with past practice); or (ivv) enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate) except in the ordinary course of business;
(e) neither the Company nor any Company Subsidiary shall transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any assets other than in the ordinary course of business and consistent with past practice;
(f) neither the Company nor any Company Subsidiary shall make any change in the compensation payable or to become payable to any of its officers, directors, employees, agents or consultants or to Persons providing management services (other than normal increases or decreases reflecting the performance of the Company and the Company Subsidiaries and of such Persons in the ordinary course of business consistent with past practice), or enter into or amend any employment, severance, consulting, termination or other agreement or employee benefit plan (other than an amendment required to conform such plan to changes that have occurred or may be made under applicable law, or to reflect increases or decreases referred to in the preceding parenthetical) or make any loans to any of its officers, directors, employees, Affiliates, agents or consultants or make any change in its existing borrowing or lending arrangements for or on behalf of any of such Persons pursuant to an employee benefit plan or otherwise (except for loans to facilitate exercises of the Company Stock Options);
(g) neither the Company nor any Company Subsidiary shall pay or make any accrual or arrangement for payment of any pension, retirement allowance or other employee benefit pursuant to any existing plan, agreement or arrangement to any officer, director, employee or Affiliate or pay or agree to pay or make any accrual or arrangement for payment to any officers, directors, employees or Affiliates of the Company of any amount relating to unused vacation days, except payments and accruals made in the ordinary course of business consistent with past practice or as required by an existing Plan, adopt or pay, grant, issue, accelerate or accrue salary or other payments or benefits pursuant to any pension, profit-sharing, bonus, extra compensation, incentive, deferred compensation, stock purchase, stock option, stock appreciation right, group insurance, severance pay, retirement or other employee benefit plan, agreement or arrangement, or any employment or consulting agreement with or for the benefit of any director, officer, employee, agent or consultant, whether past or present except in the ordinary course of business consistent with past practice or as required by an existing Plan, or amend in any material respect any such existing plan, agreement or arrangement in a manner inconsistent with the foregoing;
(h) neither the Company nor any Company Subsidiary shall permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to Parent, except policies providing coverage for losses not in excess of its Subsidiaries shall change any of the accounting methods used by it unless required by GAAP$200,000;
(i) neither the Company nor any Company Subsidiary shall enter into any contract or transaction relating to the purchase of its Subsidiaries assets other than in the ordinary course of business consistent with prior practices;
(j) neither the Company nor any Company Subsidiary shall pay, repurchase, discharge or satisfy any of its claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of any such business and consistent with past practice, of claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company and its consolidated the Company Subsidiaries;
(jk) neither the Company nor any of its Subsidiaries will Company Subsidiary shall adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than the Merger)Company Subsidiary;
(kl) neither the Company nor any Company Subsidiary shall (i) change any of its Subsidiaries will the accounting methods used by it unless required by GAAP or (ii) make any material election relating to Taxes, change any material election relating to Taxes already made, adopt any material accounting method relating to Taxes, change any material accounting method relating to Taxes unless required by GAAP, enter into any closing agreement relating to Taxes, settle any claim or assessment relating to Taxes or consent to any claim or assessment relating to Taxes or any waiver of the statute of limitations for any such claim or assessment;
(m) neither the Company nor any Company Subsidiary shall take, or agree to or commit to take, any action that would or is reasonably likely to result in any of the conditions to the Merger set forth in Section 9.1 not being satisfied, or would make any representation or warranty of the Company contained herein, in the case of any representation or warranty not qualified by materiality, this Agreement materially inaccurate or, in the case of any other representation or warranty, inaccurate in any respect at, or as of any time prior to, to the Effective Time, or that would materially impair the ability of the Company, Parent or Merger Sub to consummate the Merger in accordance with the terms hereof or materially delay such consummation; and
(ln) neither the Company nor any of its Subsidiaries will the Company Subsidiary shall enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.
Appears in 2 contracts
Samples: Merger Agreement (E Offering Corp), Merger Agreement (Wit Capital Group Inc)
Interim Operations of the Company. The Company covenants and agrees thatthat prior to the Effective Date, except (i) as expressly contemplated by this AgreementAgreement or the Related Agreements, (ii) as set forth in Section 5.1 8.1 of the Company's Disclosure Schedule Schedule, or (iii) as agreed in writing by Parent, Parent after the date hereof, and prior to the time the designees of the Purchaser have been elected to, and shall constitute a majority of, the Board of Directors of the Company pursuant to Section 1.3 (the "Appointment Date"):this Agreement:
(a) the business of the Company and its the Company Subsidiaries shall be conducted only in the usual, regular and ordinary course and usual course andsubstantially in the same manner as previously conducted, to the extent consistent therewith, and each of the Company and its the Company Subsidiaries shall use its all commercially reasonable best efforts to preserve its business organization intact intact, keep available the services of its current officers and employees and maintain its existing relations with customersPersons having business dealings with it, suppliers, employees, creditors to the end that the goodwill and ongoing business partnersof each of them shall be unimpaired at the Effective Time;
(b) neither the Company will not, directly or indirectly, nor any Company Subsidiary shall: (i) sell, transfer or pledge or agree to sell, transfer or pledge any of the Shares, Preferred Stock or capital stock of any of its Subsidiaries beneficially owned by it; (ii) amend its Articles of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares or Preferred Stock or any outstanding capital stock of any of the Subsidiaries of the Company;
(c) neither the Company nor any of its Subsidiaries shall: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, transfer, pledge, dispose of or encumber any additional shares ofof any class or series of its capital stock or Voting Debt, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire acquire, any shares of, capital stock of any class or series of the Company its capital stock or its Subsidiariesany Voting Debt, other than shares Shares reserved for issuance on the date hereof of this Agreement pursuant to the exercise of Company Stock Options outstanding on the date hereof or the conversion of Company Preferred Stock outstanding on the date hereof, (iii) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to any shares of any class or series of its capital stock except in connection with the conversion of Company Preferred Stock outstanding on the date hereof; (iiiiv) transfersplit, leasecombine or reclassify any shares of any class or series of its stock; or (v) redeem, license, sell, mortgage, pledge, dispose ofpurchase or otherwise acquire directly or indirectly any shares of any class or series of its capital stock, or encumber any material assets instrument or security which consists of or includes a right to acquire such shares except in connection with the conversion of Company Preferred Stock outstanding on the date hereof;
(c) neither the Company nor any Company Subsidiary shall: (i) incur or modify any indebtedness or other liability, other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any material indebtedness or other liability; or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock;
(d) neither the Company nor any of its Subsidiaries shall: (i) grant any increase in the compensation payable or to become payable by the Company or any of its Subsidiaries to any of its employees; (ii) (A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under any existing, bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company or any its Subsidiaries;
(e) neither the Company nor any of its Subsidiaries shall modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims thereunderclaims, except in the ordinary course of business and consistent with past practice;
(fd) neither the Company nor any of its Subsidiaries shall permit any material insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to Parent;
(g) neither the Company nor any of its Subsidiaries Subsidiary shall: (i) incur or assume any long-term debt debt, or except in the ordinary course of business, incur or assume any short-term indebtednessindebtedness in amounts not consistent with past practice; (ii) modify the terms of any indebtedness or other liability, other than modifications of short term debt in the ordinary and usual course of business and consistent with past practice; (iii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person, except in the ordinary course of business and consistent with past practice; (iiiiv) make any loans, advances or capital contributions to, or investments in, any other person (other than to or in wholly owned Subsidiaries of the Company or customary loans or advances to employees Company) except in accordance the ordinary course of business and consistent with past practice); or (ivv) enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate) except in the ordinary course of business;
(e) neither the Company nor any Company Subsidiary shall transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any assets other than in the ordinary course of business and consistent with past practice;
(f) neither the Company nor any Company Subsidiary shall make any change in the compensation payable or to become payable to any of its officers, directors, employees, agents or consultants or to Persons providing management services (other than normal increases or decreases reflecting the performance of the Company and the Company Subsidiaries and of such Persons in the ordinary course of business consistent with past practice), or enter into or amend any employment, severance, consulting, termination or other agreement or employee benefit plan (other than an amendment required to conform such plan to changes that have occurred or may be made under applicable law, or to reflect increases or decreases referred to in the preceding parenthetical) or make any loans to any of its officers, directors, employees, Affiliates, agents or consultants or make any change in its existing borrowing or lending arrangements for or on behalf of any of such Persons pursuant to an employee benefit plan or otherwise (except for loans to facilitate exercises of the Company Stock Options);
(g) neither the Company nor any Company Subsidiary shall pay or make any accrual or arrangement for payment of any pension, retirement allowance or other employee benefit pursuant to any existing plan, agreement or arrangement to any officer, director, employee or Affiliate or pay or agree to pay or make any accrual or arrangement for payment to any officers, directors, employees or Affiliates of the Company of any amount relating to unused vacation days, except payments and accruals made in the ordinary course of business consistent with past practice or as required by an existing Plan, adopt or pay, grant, issue, accelerate or accrue salary or other payments or benefits pursuant to any pension, profit-sharing, bonus, extra compensation, incentive, deferred compensation, stock purchase, stock option, stock appreciation right, group insurance, severance pay, retirement or other employee benefit plan, agreement or arrangement, or any employment or consulting agreement with or for the benefit of any director, officer, employee, agent or consultant, whether past or present except in the ordinary course of business consistent with past practice or as required by an existing Plan, or amend in any material respect any such existing plan, agreement or arrangement in a manner inconsistent with the foregoing;
(h) neither the Company nor any Company Subsidiary shall permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or 42 terminated without notice to Parent, except policies providing coverage for losses not in excess of its Subsidiaries shall change any of the accounting methods used by it unless required by GAAP$200,000;
(i) neither the Company nor any Company Subsidiary shall enter into any contract or transaction relating to the purchase of its Subsidiaries assets other than in the ordinary course of business consistent with prior practices;
(j) neither the Company nor any Company Subsidiary shall pay, repurchase, discharge or satisfy any of its claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of any such business and consistent with past practice, of claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company and its consolidated the Company Subsidiaries;
(jk) neither the Company nor any of its Subsidiaries will Company Subsidiary shall adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than the Merger)Company Subsidiary;
(kl) neither the Company nor any Company Subsidiary shall (i) change any of its Subsidiaries will the accounting methods used by it unless required by GAAP or (ii) make any material election relating to Taxes, change any material election relating to Taxes already made, adopt any material accounting method relating to Taxes, change any material accounting method relating to Taxes unless required by GAAP, enter into any closing agreement relating to Taxes, settle any claim or assessment relating to Taxes or consent to any claim or assessment relating to Taxes or any waiver of the statute of limitations for any such claim or assessment;
(m) neither the Company nor any Company Subsidiary shall take, or agree to or commit to take, any action that would or is reasonably likely to result in any of the conditions to the Merger set forth in Section 9.1 not being satisfied, or would make any representation or warranty of the Company contained herein, in the case of any representation or warranty not qualified by materiality, this Agreement materially inaccurate or, in the case of any other representation or warranty, inaccurate in any respect at, or as of any time prior to, to the Effective Time, or that would materially impair the ability of the Company, Parent or Merger Sub to consummate the Merger in accordance with the terms hereof or materially delay such consummation; and
(ln) neither the Company nor any of its Subsidiaries will the Company Subsidiary shall enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.
Appears in 1 contract
Samples: Merger Agreement (E Trade Group Inc)
Interim Operations of the Company. The Selling Shareholders shall severally and not jointly cause each of the Company covenants and agrees thatits Subsidiaries, from the date hereof to the Closing Date, except (i) as expressly provided in the Transaction Documents or (ii) as may be agreed in writing by Purchaser:
(i) to conduct its business diligently and in accordance with all applicable laws and regulations, (ii) not to hire any permanent employees, (iii) not to take any action or fail to act resulting in the cancellation, termination, suspension or other alteration or impairment in any way of the License and (iv) not to take any action which would impair any existing relations with customers or suppliers of goods or services, provided however that none of the Company, its Subsidiaries nor the Selling Shareholders shall be prohibited from taking any action (even if such action impairs such existing relations) related to the settlement of liabilities of the Company as contemplated by this Agreement, (ii) as set forth in Section 5.1 of the Company's Disclosure Schedule or (iii) as agreed in writing by Parent, after the date hereof, and prior to the time the designees of the Purchaser have been elected to, and shall constitute a majority of, the Board of Directors of the Company pursuant to Section 1.3 (the "Appointment Date"):
(a) the business of the Company and its Subsidiaries shall be conducted only in the ordinary and usual course and, to the extent consistent therewith, each of the Company and its Subsidiaries shall use its commercially reasonable best efforts to preserve its business organization intact and maintain its existing relations with customers, suppliers, employees, creditors and business partners;
(b) the Company will not, directly or indirectly, not to (i) sell, transfer or pledge or agree to sell, transfer or pledge any of the Shares, Preferred Stock or capital stock of any of its Subsidiaries beneficially owned by it; (ii) amend its Articles of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares or Preferred Stock or any outstanding capital stock of any of the Subsidiaries of the Company;
(c) neither the Company nor any of its Subsidiaries shall: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, transfer, pledge, dispose of or encumber any additional shares ofof any class or series of its share capital, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire acquire, any shares of, capital stock of any class or series of the Company its capital stock or its Subsidiariesany Voting Debt, other than shares reserved for issuance on the date hereof pursuant to the exercise of Options outstanding on the date hereof; (iii) transferdeclare, lease, license, sell, mortgage, pledge, dispose of, set aside or encumber pay any material assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any material indebtedness dividend or other liability; distribution payable in cash, stock or property with respect to any shares of any class or series of its capita] stock, (iv) split, combine or reclassify any shares of any class or series of its capital stock or (ivv) redeem, purchase or otherwise acquire acquire, directly or indirectly indirectly, any shares of any class or series of its capital stock, or any instrument or security which consists of or includes a right to acquire such shares;
(c) not to organize any new Subsidiary or acquire any capital stock or other equity securities, or equity or ownership interest in the business, of any other Person;
(d) neither the Company nor any of its Subsidiaries shall: (i) grant any increase in the compensation payable or not to become payable by the Company or any of its Subsidiaries to any of its employees; (ii) (A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under any existing, bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company or any its Subsidiaries;
(e) neither the Company nor any of its Subsidiaries shall modify, amend or terminate any Contract set forth in Schedule 4.22 of its material contracts the Closing Disclosure Schedule or waive, release or assign any material rights or claims thereunder;
(fe) neither the Company nor any of its Subsidiaries shall permit any material insurance policy naming it as a beneficiary or a loss payable payee not to be cancelled or terminated without notice to Parent;
(g) neither the Company nor any of its Subsidiaries shall: (i) incur or assume any long-term debt or any short-term indebtedness; Indebtedness (except for Indebtedness to shareholders of the Company), (ii) assume, guarantee, endorse or otherwise take any action to become liable or responsible (whether directly, contingently or otherwise) for the liabilities or obligations of any other personPerson, except in the ordinary course of business and consistent with past practice; (iii) make except as set forth in Schedule 4.15(b) of the Closing Disclosure Schedule, assign, delegate or otherwise transfer to any loans, advances Selling Shareholder or capital contributions toany third-party all or any interest in, or investments inclaim in respect of, any receivables or other person (amounts that are owing to the Company or any of its Subsidiaries from Purchaser or the KSO Unit or any other than to wholly owned Subsidiaries rights of the Company or customary loans any of its Subsidiaries or advances any Selling Shareholder whether in respect of the KSO Unit or otherwise, provided however in each case that any such assignment, delegation or other transfer shall have been made without recourse and without any obligation to employees the Company whatsoever and the Company shall have no liabilities or obligations in accordance with past practice); respect of such assignment, delegation or other transfer that have not been fully performed or discharged on or prior to the Closing Date, (iv) enter dispose of or permit to lapse any rights to any Intellectual Property or (v) change any of the banking or safe deposit arrangements described or referred to in any part of the Signing Disclosure Schedule or the Closing Disclosure Schedule or open any new safe deposit boxes, savings, time deposit or checking accounts or other accounts of any nature, in each except to transfer to the Person designated by Purchaser (to the sole and absolute satisfaction of Purchaser) all authority, right or interest in such banking or safe deposit arrangements;
(f) except is set forth in Schedule 4.17(e) of the Closing Disclosure Schedule, not to sell, lease, license, hypothecate, mortgage, pledge, transfer or otherwise encumber or dispose or destroy any assets or property except to the KSO Unit;
(g) except as set forth in Schedule 4.17(g) of the Closing Disclosure Schedule or as may otherwise be directly related to payments of severance, bonus or success fees (provided however that such the aggregate amount of such payments shall not exceed US$6,000,000), not to increase the compensation payable or to become payable to any of its officers, directors, commissioners, employees, agents or consultants (other than Prince Consulting, Canadian Imperial Bank of Commerce, Singapore office, Ernst & Young and PriceWaterhouseCoopers) or to Persons providing management services including by entering into or amending any material commitment employment, severance, consulting, termination or transaction (includingother agreement with, but not limited or employee benefit plan for, by making any loan or advance to, any borrowingof its officers, capital expenditure directors, commissioners, employees, agents or purchaseconsultants (other than Prince Consulting Canadian Imperial Bank of Commerce, sale Singapore office, Ernst & Young and PriceWaterhouseCoopers) or lease by making any change in its existing borrowing or lending arrangements for or on behalf of assets any of such Persons pursuant to an employee benefit plan or real estateotherwise, provided however that on and from the closing Date the Company shall have no liabilities or obligations in respect of any payments or other actions by the Company in respect of any of the matters as contemplated by this Section 6.1(g);
(h) neither the Company nor any of its Subsidiaries shall change permit any insurance policy in effect as of the accounting methods used by date hereof and naming it unless required by GAAPas a beneficiary or a loss payable payee to be canceled or terminated;
(i) neither the Company nor any of its Subsidiaries shall pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company and its consolidated Subsidiaries;
(j) neither the Company nor any of its Subsidiaries will not to adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries Subsidiaries;
(other than j) not to (i) change any of the Merger);accounting methods used by it unless required by GAAP or (ii) except as set forth in Schedule 4.26(j) of the Signing Disclosure Schedule, make any election relating to Taxes, change any election relating to Taxes already made, adopt any accounting method relating to Taxes, change any accounting method relating to Taxes unless required by GAAP, enter into any closing agreement relating to Taxes, settle or consent to any claim or assessment relating to Taxes (except with respect to Taxes listed in Schedule 4.26(a) and Schedule 4.26(c) of the Signing Disclosure Disclosure) or waive the statute of limitations for any such claim or assessment; and
(k) neither the Company nor any of its Subsidiaries will take, or agree not to commit to take, any action that would make any representation or warranty of the Company contained herein, in the case of any representation or warranty not qualified by materiality, materially inaccurate or, in the case of any other representation or warranty, inaccurate in any respect at, or as of any time prior to, the Effective Time; and
(l) neither the Company nor any of its Subsidiaries will enter into an any agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.
Appears in 1 contract
Interim Operations of the Company. The Company covenants and agrees that, except (i) as expressly contemplated by this Agreement, (ii) as set forth in Section 5.1 prior to the earlier of the Company's Disclosure Schedule Appointment Date or the date, if any, on which this Agreement is earlier terminated pursuant to Section 8.1 (iiithe "Termination Date") as agreed in writing by Parent, after the date hereof, and prior to the time the designees of the Purchaser have been elected to, and shall constitute a majority of, the Board of Directors of the Company pursuant to Section 1.3 (the "Appointment Date")::
(a) the business of the Company and its each of the Subsidiaries shall be conducted only in the usual, regular and ordinary course and usual course andsubstantially in the same manner as heretofore conducted, to the extent consistent therewith, each of and the Company and its Subsidiaries each Company Subsidiary shall use its commercially reasonable best efforts to preserve its business organization intact in all material respects, keep available the services of its current executive officers and key employees and maintain its existing relations with franchisees, customers, suppliers, employeescreditors, creditors business partners and others having business partnersdealings with it, to the end that the goodwill and ongoing business of each of them shall be materially unimpaired at the Effective Time;
(b) the Company will not, directly or indirectly, (i) sell, transfer or pledge or agree to sell, transfer or pledge any of the Shares, Preferred Stock or capital stock of any of its Subsidiaries beneficially owned by it; (ii) amend its Articles of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares or Preferred Stock or any outstanding capital stock of any of the Subsidiaries of the Company;
(c) neither the Company nor any of its Subsidiaries Company Subsidiary shall: (i) declareamend any of the Company Organizational Documents other than as set forth in Section 2.4, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, transfer, pledge, dispose of or encumber any additional shares ofof any class or series of its capital stock or Voting Debt, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire acquire, any shares of, capital stock of any class or series of the Company its capital stock or its Subsidiariesany Voting Debt, other than shares Shares reserved for issuance on the date hereof of this Agreement pursuant to the exercise of Company Stock Options and Warrants outstanding on the date hereof; of this Agreement, (iii) transferdeclare, leaseset aside or pay any dividend or other distribution payable in cash, licensestock or property with respect to any shares of any class or series of its capital stock, sell(iv) split, mortgage, pledge, dispose ofcombine or reclassify any shares of any class or series of its stock, or encumber (v) other than the deemed repurchase of Company Stock Options and Warrants in accordance with Section 3.4 of this Agreement, redeem, purchase or otherwise acquire directly or indirectly any material assets shares of any class or series of its capital stock, or any instrument or security which consists of or includes a right to acquire such shares;
(c) neither the Company nor any Company Subsidiary shall (i) incur or assume any Indebtedness or other Liability, other than in the ordinary and usual course of business and consistent with past practice, or incur or (ii) modify the terms of any material indebtedness Indebtedness or other liability; Liability, other than modifications of short term debt in the ordinary and usual course of business and consistent with past practice, or (iviii) redeemmodify, purchase amend or otherwise acquire directly or indirectly terminate any of its capital stockmaterial Company Agreement (including any Company Agreement listed on Section 4.22 of the Company Disclosure Schedule) or waive, release or assign any material rights or claims, except in the ordinary course of business and consistent with past practice;
(d) neither the Company nor any of its Subsidiaries shall: (i) grant any increase in the compensation payable or to become payable by the Company or any of its Subsidiaries to any of its employees; (ii) (A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under any existing, bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company or any its Subsidiaries;
(e) neither the Company nor any of its Subsidiaries Subsidiary shall modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims thereunder;
(f) neither the Company nor any of its Subsidiaries shall permit any material insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to Parent;
(g) neither the Company nor any of its Subsidiaries shall: (i) incur or assume any long-term debt or any short-term indebtedness; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other personPerson, except as described in Section 6.1(d) of the Company Disclosure Schedule as being in the ordinary course of business and consistent with past practice; , (iiii) make any loansloan, advances advance or capital contributions contribution to, or investments investment in, any other person Person (other than to or in wholly owned Subsidiaries of the Company or customary loans or advances to employees in accordance with past practiceSubsidiaries); , or (ivii) enter into any material commitment or transaction (including, but not limited to, including any borrowing, capital expenditure or purchase, sale or lease of assets or real estate);
(he) neither the Company nor any Company Subsidiary shall transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any assets other than in the ordinary and usual course of business and consistent with past practice;
(f) except as otherwise specifically provided in this Agreement or in the Schedule 14D-9, make or offer to make any change in the compensation payable or to become payable to any of its Subsidiaries shall change officers, directors, employees, agents or consultants (other than normal recurring increases in wages to employees who are not officers or directors or Affiliates in the ordinary course of business and consistent with past practice) or to Persons providing management services, or enter into or amend any employment, severance, consulting, termination or other agreement or employee benefit plan or make any loans to any of its officers, directors, employees, Affiliates, agents or consultants or make any change in its existing borrowing or lending arrangements for or on behalf of any of such Persons pursuant to an employee benefit plan or otherwise; or
(g) except as otherwise specifically contemplated by this Agreement or by the accounting methods used by it unless Schedule 14D-9 or as specifically set forth in Section 6.1(g) of the Company Disclosure Schedule, (i) pay or make any accrual or arrangement for payment of any pension, retirement allowance or other employee benefit pursuant to any existing plan, agreement or arrangement to any officer, director, employee or Affiliate, (ii) pay, offer to pay or agree to pay or make any accrual or arrangement for payment to any officers, directors, employees or Affiliates of the Company or any Company Subsidiary of any amount relating to unused vacation days (except payments and accruals made in the ordinary course of business consistent with past practice), or (iii) adopt or pay, grant, issue, accelerate or accrue salary or other payments or benefits pursuant to any pension, profit-sharing, bonus, extra compensation, incentive, deferred compensation, stock purchase, stock option, stock appreciation right, group insurance, severance pay, retirement or other employee benefit plan, agreement or arrangement, or any employment or consulting agreement with or for the benefit of any director, officer, employee, agent or consultant, whether past or present, or amend in any material respect any such existing plan, agreement or arrangement in a manner inconsistent with the foregoing;
(h) except as may be required by GAAPApplicable Law or this Agreement, enter into, adopt or amend or terminate any bonus, special remuneration, profit sharing, compensation, severance, termination, stock option, stock appreciation right, restricted stock, performance unit, stock equivalent, stock purchase agreement, pension, retirement, deferred compensation, employment, health, life, or disability insurance, dependent care, severance or other employee benefit plan, agreement, trust, fund or other arrangement for the benefit or welfare of any director, officer, employee or consultant in any manner;
(i) neither the Company nor any Company Subsidiary shall exercise its discretion or otherwise voluntarily accelerate the vesting of any Company Stock Option as a result of the Merger, any other "change in control" of the Company (as defined in the Company Benefit Plans) or otherwise;
(j) neither the Company nor any Company Subsidiary shall revalue in any material respect any of its assets, including writing down the value of inventory or writing-off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by generally accepted accounting principles;
(k) neither the Company nor any Company Subsidiary shall permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to and the prior consent of Parent;
(l) neither the Company nor any Company Subsidiary shall enter into any Company Agreement or transaction relating to the purchase of assets other than in the ordinary course of business and consistent with prior practices;
(m) neither the Company nor any Company Subsidiary shall settle or compromise any pending or threatened suit, action or claim that (i) relates to the Transactions or (ii) the settlement or compromise of which would involves more than fifty thousand dollars ($50,000) or that would otherwise be material to the Company and the Company Subsidiaries, taking the Company together with the Company Subsidiaries as a whole, or that relates to any Intellectual Property matters;
(n) neither the Company nor any Company Subsidiary shall pay, purchase, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise)of its Liabilities, other than the payment, discharge or satisfaction in the ordinary course of any such claimsbusiness and consistent with past practice, liabilities or obligations of Liabilities reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company and its consolidated SubsidiariesFinancial Statements;
(jo) neither the Company nor any of its Subsidiaries Company Subsidiary will adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries Company Subsidiary (other than the Merger);
(kp) neither the Company nor any Company Subsidiary will (i) change any of the accounting methods used by it unless required by GAAP, (ii) change any of its Subsidiaries policies, procedures or timing of the collection of accounts receivable in accordance with its historical practices, or (iii) make any material election relating to Taxes, change any material election relating to Taxes already made, adopt any material accounting method relating to Taxes, change any material accounting method relating to Taxes unless required by GAAP or change in the Internal Revenue Code or the regulations under the Internal Revenue Code, enter into any closing agreement relating to Taxes, settle any claim or assessment relating to Taxes or consent to any claim or assessment relating to Taxes or any waiver of the statute of limitations for any such claim or assessment;
(q) except as otherwise permitted by Section 6.4, neither the Company nor any Company Subsidiary will take, or agree to commit to take, any action that could or would be reasonably likely to result in any of the conditions to the Offer set forth in Appendix A to this Agreement or any of the conditions set forth in Article VII not being satisfied, or would make any representation or warranty of the Company contained herein, in the case of any representation or warranty not qualified by materiality, materially inaccurate or, in the case of any other representation or warranty, this Agreement inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company or the holders of Shares to consummate the Offer or the Merger in accordance with the terms thereof or materially delay such consummation; and
(lr) neither the Company nor any of its Subsidiaries Company Subsidiary will enter into an any agreement, contract, commitment commitment, understanding or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoingforegoing (and the Company shall use all reasonable efforts not to take any action that would make any of the representations or warranties of the Company contained in this Agreement untrue or incorrect).
Appears in 1 contract
Interim Operations of the Company. The Company covenants and agrees that, except Except (i) as expressly contemplated by provided in this Agreement, (ii) as set forth in Section 5.1 of the Company's Disclosure Schedule or (iii) as agreed may be consented to in writing by ParentPurchaser, each of STC and STI shall assure with respect to the US Company and the US Company Subsidiaries, and SBV shall assure with respect to the BVI Company and the BVI Company Subsidiaries, that, after the date hereof, hereof and prior to the time the designees of the Purchaser have been elected to, and shall constitute a majority of, the Board of Directors of the Company pursuant to Section 1.3 (the "Appointment Closing Date")::
(a) the business of the each Company and its Subsidiaries shall be conducted in the same manner as heretofore conducted and only in the ordinary and usual course consistent with past practices and, without limiting the foregoing, (i) each Company shall manage its working capital (including the timing of payment of accounts payable, collection of accounts receivable and the management of its inventory) in the ordinary course consistent with past practice and (ii) each Company shall continue to make capital expenditures consistent with the extent annual plan and in the ordinary course of business consistent therewith, each of the Company and its Subsidiaries shall use its commercially reasonable best efforts to preserve its business organization intact and maintain its existing relations with customers, suppliers, employees, creditors and business partnerspast practices;
(b) the no Company will not, directly or indirectly, (i) sell, transfer or pledge or agree to sell, transfer or pledge any of the Shares, Preferred Stock or capital stock of any of its Subsidiaries beneficially owned by it; (ii) amend its Articles of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares or Preferred Stock or any outstanding capital stock of any of the Subsidiaries of the Company;
(c) neither the Company nor any of its Subsidiaries shall: (i) declareamend its limited liability company agreement, set aside certificate of incorporation, by-laws or pay any dividend or other distribution payable in cashsimilar organizational documents, stock or property with respect to its capital stock; (ii) issue, sell, transfer, pledge, dispose of or encumber any additional shares ofor interests of any class or series of its capital stock, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire acquire, any shares of, capital stock or interests of any class or series of the Company or its Subsidiariescapital stock, other than shares reserved for issuance on the date hereof pursuant to the exercise of Options outstanding on the date hereof; (iii) transferexcept as set forth in Section 5.9, leasedeclare, licenseset aside or pay any dividend or other distribution payable in cash, sellstock or property with respect to any shares of any class or series of its capital stock or any limited liability company interests, mortgage(iv) split, pledge, dispose ofcombine or reclassify any shares of any class or series of its stock or interests, or encumber any material assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any material indebtedness or other liability; or (ivv) redeem, purchase or otherwise acquire directly or indirectly any shares or interests of any class or series of its capital stock, any instrument or security which consists of or includes a right to acquire such shares or interest;
(c) no Company shall: (i) incur or assume any debt other than trade payables in the ordinary course, (ii) modify the terms of any Indebtedness or other material liability other than in the ordinary course of business, or (iii) assume or guarantee the obligations of any other Person;
(d) neither the no Company nor shall make any of its Subsidiaries shall: (i) grant any increase change in the compensation payable or to become payable by the Company or any of its Subsidiaries to any of its employees; the Retained Employees (ii) (A) adopt any newother than regularly scheduled increases to non-executive employees in the ordinary course of business consistent with past practice or as set forth in Section 3.14 of the Disclosure Schedule), or (B) amend or otherwise increaseadopt, or accelerate the payment or vesting of the amounts payable or to become payable under any existing, bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan agreement or arrangement; or (iii) enter into or amend any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company or any its SubsidiariesPlan;
(e) neither the no Company nor any of its Subsidiaries shall modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims thereunder;
(f) neither the Company nor any of its Subsidiaries shall voluntarily permit any material insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated prior to the Closing Date without notice to ParentPurchaser;
(gf) neither the no Company nor any of its Subsidiaries shall: (i) incur or assume any long-term debt or any short-term indebtedness; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person, except in the ordinary course of business and consistent with past practice; (iii) make any loans, advances or capital contributions to, or investments in, any other person (other than to wholly owned Subsidiaries of the Company or customary loans or advances to employees in accordance with past practice); or (iv) enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate);
(h) neither the Company nor any of its Subsidiaries shall change any of the accounting methods used by it unless required by GAAP;
(i) neither the Company nor any of its Subsidiaries shall pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company and its consolidated Subsidiaries;
(j) neither the Company nor any of its Subsidiaries will adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than the Merger)Company;
(kg) neither the no Company nor shall change in any material respect any of its Subsidiaries will the accounting methods used by it unless required by GAAP;
(h) no Company shall take, or agree to or commit to take, any action that would result in any of the conditions to the Closing set forth in Article VI not being satisfied, or would make any representation or warranty of the Company Seller Parties contained herein, in the case of any representation or warranty not qualified by materiality, materially inaccurate or, in the case of any other representation or warranty, herein inaccurate in any material respect at, or as of any time prior to, the Effective TimeClosing Date, or that would materially impair the ability of Purchaser or either Seller to consummate the Closing in accordance with the terms hereof or materially delay such consummation; and
(li) neither the no Company nor any of its Subsidiaries will shall enter into an any agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything to the contrary contained herein, nothing shall prohibit NPT from sweeping cash from the accounts of the US Company and the US Company Subsidiaries and SBV from sweeping cash from the accounts of BVI Company and the BVI Subsidiaries at any time prior to and including June 30, 2003. From June 30, 2003 through the Closing Date, Sellers and the Companies will operate the Companies for the benefit of Purchaser and with a view to preserving for Purchaser the benefits of the operations of the Companies, including any net income and cash flow realized during such period. In particular, during such period, none of the Companies shall, without the consent of Purchaser, repay any indebtedness of any Company to Sellers or to authorize, recommend, propose or announce an intention to do any of their Affiliates or charge to any Company any consent fee to be paid in connection with the foregoingTransactions.
Appears in 1 contract
Samples: Stock Purchase and Sale Agreement (Nptest Holding Corp)
Interim Operations of the Company. The Company covenants and agrees that, except (i) as expressly contemplated by this Agreement, (ii) as set forth disclosed in Section 5.1 of the Company's Company Disclosure Schedule or (iii) as agreed in writing by Parent, after the date hereof, and prior to the time the designees directors of the Purchaser have been elected to, and shall constitute a majority of, the Board of Directors of the Company pursuant to Section 1.3 (the "Appointment Election Date"):
(a) the business of the Company and its Subsidiaries shall be conducted only in the ordinary and usual course of business, consistent with past practices and, to the extent consistent therewith, each of the Company and its Subsidiaries shall use its commercially reasonable best efforts to preserve its business organization intact and maintain its existing relations with customers, supplierssuppliers and other third parties, employeesand to keep available the services of their present officers, creditors employees and business partnersassociates;
(b) each of the Company and its Subsidiaries will not, directly or indirectly, (i) sell, transfer amend or pledge or agree propose any change to sell, transfer or pledge any of the Shares, Preferred Stock or capital stock of any of its Subsidiaries beneficially owned by it; (ii) amend its Articles Certificate of Incorporation or Bylaws By-laws or similar organizational documents; documents or (iiiii) split, combine or reclassify the outstanding Shares or Preferred Stock or any its outstanding capital stock of any of the Subsidiaries of the Companystock;
(c) neither the Company nor any of its Subsidiaries shall: (i) declare, set aside or pay any dividend or other distribution (whether payable in cash, stock or property or any combination thereof) with respect to its capital stockstock (other than cash dividends from any wholly-owned Subsidiary of the Company to the Company or any other Subsidiary of the Company all of the capital stock of which is owned directly or indirectly by the Company); (ii) issue, sell, pledge, dispose of issue or encumber sell any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire acquire, any shares of, of capital stock of any class of the Company or its Subsidiaries, other than shares reserved for issuance on the date hereof issuances pursuant to the exercise of Options outstanding on the date hereofhereof and disclosed on Schedule 3.2(a) hereto or conversion of Class A Shares into Common Shares in accordance with the terms thereof; (iii) transfersell, lease, license, sell, mortgage, pledge, license (subject to the further restrictions of paragraph (vi) hereof) or dispose of, of any assets or encumber any material assets properties other than in the ordinary and usual course of business and consistent with past practicepractices which individually or in the aggregate are in an amount in excess of $500,000; (iv) incur, or incur assume, prepay or modify any material indebtedness debt, other than in the ordinary course of business consistent with past practices; (v) license or other liabilitysublicense (in each case subject to the further restrictions of paragraph (vi) hereof) any asset or property of the Company or any Subsidiary of the Company except in the ordinary course of business consistent with past practice on a basis that results in a positive current royalty net of any royalties due by the Company or any Subsidiary on account of sales by the licensee or sublicensee; (vi) license or sublicense any Intellectual Property of the Company or any Subsidiary; or (ivvii) redeem, purchase or otherwise acquire acquire, directly or indirectly indirectly, any of its or its Subsidiaries' capital stockstock (except as contemplated by any employee benefit or stock plans or any employment or severance agreement as in effect on the date hereof);
(d) neither the Company nor any of its Subsidiaries shall: shall acquire (iby merger, consolidation or acquisition of stock or assets) grant any increase in the compensation payable or to become payable by the Company or any of its Subsidiaries to any of its employees; (ii) (A) adopt any newcorporation, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under any existing, bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement partnership or other employee benefit plan agreement business organization or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company or any its Subsidiariesdivision thereof;
(e) neither the Company nor any of its Subsidiaries shall modifymake any investment other than in readily marketable securities in an amount in excess of $500,000 in the aggregate whether by purchase of stock or securities, amend contributions to capital or terminate any of its material contracts or waive, release or assign any material rights or claims thereunderproperty transfer;
(f) neither the Company nor any of its Subsidiaries shall permit waive, release, grant, or transfer any rights of value material insurance policy naming it to the Company and its Subsidiaries taken as a beneficiary or a loss payable payee to be cancelled or terminated without notice to Parentwhole;
(g) neither the Company nor any of its Subsidiaries shall, except as may be required or contemplated by this Agreement or by applicable law, (i) enter into, adopt, materially amend or terminate any Benefit Plans, (ii) enter into or amend any retention plan or stay bonus arrangement, employment or severance agreement, (iii) increase in any manner the compensation or other benefits of its officers or directors or (iv) increase in any manner the compensation or other benefits of any other employees (except, in the case of this clause (iv), for normal increases in the ordinary course of business, consistent with past practices);
(h) neither the Company nor any of its Subsidiaries shall: (i) incur or assume any long-term debt or any short-term indebtedness; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other personperson (other than Subsidiaries of the Company), except pursuant to contractual indemnification agreements entered into in the ordinary course of business and business, consistent with past practicepractices; (iiiii) make any loans, advances or capital contributions to, or investments in, any other person (other than to wholly owned Subsidiaries of the Company or customary loans or and payroll, travel and similar advances to employees made in accordance the ordinary course of business consistent with past practicepractices); (iii) revalue in any material respect any of its assets, including, without limitation, writing down the value of inventory in any material manner or write-off of notes or accounts receivable in any material manner; or (iv) enter into any material commitment authorize or transaction (including, but not limited to, any borrowing, make capital expenditure expenditures which exceed $2,500,000 individually or purchase, sale or lease of assets or real estate);
(h) neither $20,000,000 in the Company nor any of its Subsidiaries shall change any of the accounting methods used by it unless required by GAAPaggregate;
(i) neither the Company nor any of its Subsidiaries shall pay, discharge or satisfy any material claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), ) other than the payment, discharge or satisfaction in the ordinary course of any such claimsbusiness, consistent with past practices, of liabilities or obligations reflected or reserved against in, or contemplated by, in the consolidated financial statements (or the notes thereto) of the Company and its consolidated Subsidiariesor incurred since the most recent date thereof pursuant to an agreement or transaction described in this Agreement (including the schedules hereto) or incurred in the ordinary course of business, consistent with past practices;
(j) neither the Company nor any of its Subsidiaries will adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization shall change in any material respect any of the Company accounting methods, principles, policies or any of its Subsidiaries (other than the Merger)procedures used by it unless required by GAAP or applicable law;
(k) the Company will not amend, modify or terminate any Material Agreement or enter into any new agreement material to the business of the Company, other than in the ordinary course of business consistent with past practices or with the prior written consent of Parent, which consent shall not be unreasonably withheld;
(l) neither the Company nor any Subsidiary will amend or modify any existing Affiliate Transaction or enter into any new Affiliate Transaction other than with the prior written consent of Parent;
(m) neither the Company nor any of its Subsidiaries will take, take or agree to commit to take, take any action that would make any representation or warranty of the Company contained herein, in the case of any representation or warranty not qualified by materiality, materially inaccurate or, in the case of any other representation or warranty, hereunder inaccurate in any respect at, or as of any time prior to, the Effective TimeElection Date; and
(ln) neither the Company nor any of its Subsidiaries will authorize or enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention agreement to do any of the foregoing.
Appears in 1 contract
Samples: Merger Agreement (Muse John R)
Interim Operations of the Company. The Company covenants --------------------------------- and agrees thatthat prior to the Effective Time, except (i) if consistent with past practice, (ii) as expressly contemplated by this Agreement, (iiiii) as set forth in Section 5.1 6.1 of the Company's Company Disclosure Schedule Letter or (iiiiv) as agreed in writing by ParentParent (which agreement shall not be unreasonably withheld), after the date hereof, and prior to the time the designees of the Purchaser have been elected to, and shall constitute a majority of, the Board of Directors of the Company pursuant to Section 1.3 (the "Appointment Date")::
(a) the business of the Company and its Subsidiaries of each Company Subsidiary shall be conducted only in the usual, regular and ordinary course and usual course andsubstantially in the same manner as heretofore conducted, to the extent consistent therewith, each of and the Company and its Subsidiaries each Company Subsidiary shall use its commercially reasonable best efforts to preserve its business organization intact intact, keep available the services of its current officers and employees and maintain its existing relations with licensors, customers, suppliers, employeesdistributors, creditors creditors, business partners and others having business partnersdealings with it, to the end that their respective goodwill and ongoing business shall be unimpaired at the Effective Time;
(b) the Company will not, directly or indirectly, (i) sell, transfer or pledge or agree to sell, transfer or pledge any of the Shares, Preferred Stock or capital stock of any of its Subsidiaries beneficially owned by it; (ii) amend its Articles of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares or Preferred Stock or any outstanding capital stock of any of the Subsidiaries of the Company;
(c) neither the Company nor any of its Subsidiaries Company Subsidiary shall: (i) declareamend its certificate of incorporation or bylaws or similar organizational documents, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, transfer, pledge, dispose of or encumber any additional shares ofof any class or series of its capital stock or Voting Debt, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire acquire, any shares of, capital stock of any class or series of the Company its capital stock or its Subsidiariesany Voting Debt, other than (x) the issuance of shares of Company Common Stock reserved for issuance on the date hereof of this Agreement pursuant to the exercise of Company Options and Purchase Rights under the Company ESPP outstanding on the date hereof; of this Agreement or (y) the issuance of Company Options to new non-officer employees consistent with past practices in the ordinary course of business, (iii) transferdeclare, lease, license, sell, mortgage, pledge, dispose of, set aside or encumber pay any material assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any material indebtedness dividend or other liability; distribution payable in cash, stock or property with respect to any shares of any class or series of its capital stock, (iv) split, combine or reclassify any shares of any class or series of its capital stock or (ivv) redeem, purchase or otherwise acquire directly or indirectly any shares of any class or series of its capital stock, or enter into any instrument or security which consists of or includes a right to acquire such shares, other than (1) the acquisition shares of Company Common Stock from holders of Company Options in full or partial payment of the exercise price or withholding taxes payable by such holder upon exercise of Company Options to the extent required under the terms of such Company Options as in effect on the date thereof; or (2) the repurchase of Restricted Stock from former employees, directors and consultants in connection with any termination of services to Company or any of its Subsidiaries;
(c) adopt or implement any stockholder rights plan or, except as provided in Section 4.23, alter or further amend the Company Rights Plan or Company Rights;
(d) neither the Company nor any of its Subsidiaries shall: Company Subsidiary shall (i) grant incur or modify any increase indebtedness or other liability, other than in the compensation payable ordinary course of business consistent with past practice or to become payable by the Company or any of its Subsidiaries to any of its employees; (ii) (A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under any existing, bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company or any its Subsidiaries;
(e) neither the Company nor any of its Subsidiaries shall modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims thereunderclaims, except in the ordinary course of business consistent with past practice;
(fe) neither the Company nor any of its Subsidiaries Company Subsidiary shall permit any material insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to Parent;
(g) neither the Company nor any of its Subsidiaries shall: (i) incur or assume any long-term debt debt, or except in the ordinary course of business, incur or assume any short-term indebtednessindebtedness in amounts not consistent with past practice; (ii) modify the terms of any indebtedness or other liability, other than modifications of short term debt in the ordinary course of business consistent with past practice; (iii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other personPerson, except as described in Section 6.1(e) of the Company Disclosure Letter as being in the ordinary course of business and consistent with past practice; (iiiiv) make any loans, advances or capital contributions to, or investments in, any other person Person (other than to or in wholly owned Company Subsidiaries of the Company or customary loans or and expense advances to employees in accordance the ordinary course of business consistent with past practicepractices); or (ivv) enter into any material commitment or transaction (includingincluding any capital expenditure, but not limited to, any borrowing, capital expenditure or purchaseacquisition, sale or lease of assets or real estateestate or merger or consolidation (except one involving only wholly-owned Company Subsidiaries));
(hf) neither the Company nor any Company Subsidiary shall transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any asset, other than in the ordinary course of business consistent with past practice; or
(g) except as otherwise specifically provided in this Agreement, neither the Company nor any Company Subsidiary shall make or offer to make any change in the compensation payable or to become payable to any of its Subsidiaries shall change officers, directors, employees, agents or consultants (other than normal recurring increases in wages to employees who are not officers or directors or Affiliates in the ordinary course of business consistent with past practice) or to Persons providing management services, or enter into or amend any employment, stock options, severance, consulting, termination or other agreement or employee benefit plan or make any loans to any of its officers, directors, employees, Affiliates, agents or consultants or make any change in its existing borrowing or lending arrangements for or on behalf of any of such Persons pursuant to a Company Benefit Plan or otherwise;
(h) except as otherwise specifically contemplated by this Agreement or as set forth in Section 6.1(h) of the accounting methods used by it unless Company Disclosure Letter, neither the Company nor any Company Subsidiary shall (i) pay or make any accrual or arrangement for payment of any pension, retirement allowance or other employee benefit pursuant to any existing plan, agreement or arrangement to any officer, director, employee or Affiliate, (ii) pay, offer to pay or agree to pay or make any accrual or arrangement for payment to any officers, directors, employees or Affiliates of the Company or any Company Subsidiary of any amount relating to unused vacation days (except payments and accruals made in the ordinary course of business consistent with past practice), (iii) adopt or pay, grant, issue, accelerate or accrue salary or other payments or benefits pursuant to any pension, profit-sharing, bonus, extra compensation, incentive, deferred compensation, stock purchase, stock option, stock appreciation right, group insurance, severance pay, retirement or other employee benefit plan, agreement or arrangement, or any employment or consulting agreement with or for the benefit of any director, officer, employee, agent or consultant, whether past or present, or amend in any material respect any such existing plan, agreement or arrangement in a manner inconsistent with the foregoing, except as may otherwise be required by GAAPapplicable Law;
(i) neither the Company nor any Company Subsidiary shall permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to and the prior consent of Parent, except which are replaced with new policies providing for continuation of similar coverage;
(j) neither the Company nor any Company Subsidiary shall revalue in any material respect any of its assets, including writing down the value of inventory or writing-off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by a change in GAAP promulgated after the date of this Agreement;
(k) neither the Company nor any Company Subsidiary shall settle or compromise any pending or threatened suit, action or claim that (i) relates to the Transactions or (ii) the settlement or compromise of which would involve more than $75,000 and does not obligate the Company to take or refrain from taking any action other than the payment of such sum or that would otherwise be material to the Company and Company Subsidiaries, considering the Company together with the Company Subsidiaries as a whole, or that relates to any matters concerning Company Intellectual Property;
(l) neither the Company nor any Company Subsidiary shall pay, purchase, discharge or satisfy any of its claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of any such business consistent with past practice, of claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company and its consolidated SubsidiariesFinancial Statements;
(jm) neither the Company nor any of its Subsidiaries Company Subsidiary will adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries Company Subsidiary (other than the Merger);
(kn) neither the Company nor any Company Subsidiary will (i) change any of its Subsidiaries the accounting methods used by it unless required by a change in GAAP promulgated after the date of this Agreement or (ii) make any material election relating to Taxes, change any material election relating to Taxes already made, adopt any material accounting method relating to Taxes, change any material accounting method relating to Taxes unless required by a change in GAAP or change in the Code or the regulations under the Code promulgated after the date of this Agreement, enter into any closing agreement relating to Taxes, settle any claim or assessment relating to Taxes or consent to any claim or assessment relating to Taxes or any waiver of the statute of limitations for any such claim or assessment;
(o) neither the Company nor any Company Subsidiary will take, or agree to commit to take, any action that would be reasonably likely to result in any of the conditions set forth in Article 7 not being satisfied, or would make any representation or warranty of the Company contained herein, in the case of any representation or warranty not qualified by materiality, materially inaccurate or, in the case of any other representation or warranty, this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time; and, or that would materially impair the ability of the Company, Parent or Merger Sub to consummate the Merger in accordance with the terms thereof or materially delay such consummation;
(lp) neither the Company nor any of its Subsidiaries will Company Subsidiary shall enter into an any agreement, contract, commitment commitment, understanding or arrangement with any officer or director of the Company or any Company Subsidiary with respect to any property, real or personal, tangible or intangible, including inventions, patents, trademarks or trade names, used in or pertaining to the business of the Company or any Company Subsidiary or modify, amend or terminate any such existing agreement, contract, commitment, understanding or arrangement; and
(q) neither the Company nor any Company Subsidiary will enter into any agreement, contract, commitment, understanding or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.
Appears in 1 contract
Samples: Merger Agreement (Be Free Inc)
Interim Operations of the Company. The Company covenants and agrees thatthat prior to the Effective Date, except (i) as expressly contemplated by this Agreement, (ii) as set forth in Section 5.1 of the Company's Disclosure Schedule Interim Business Plan, or (iii) as agreed in writing by Parent, after the date hereof, and prior to the time the designees of the Purchaser have been elected to, and shall constitute a majority of, the Board of Directors of the Company pursuant to Section 1.3 (the "Appointment Date")::
(a) the business of the Company and its the Company Subsidiaries shall be conducted only in the usual, regular and ordinary course and usual course andsubstantially in the same manner as heretofore conducted, to and except as otherwise required or prohibited by this SECTION 5.1 or the extent consistent therewithInterim Business Plan, each of the Company and its Company Subsidiaries shall use its commercially reasonable best efforts to preserve its business organization intact intact, and maintain its existing relations with franchisees, customers, suppliers, employeescreditors, creditors business partners and others having business partnersdealings with it, to the end that the goodwill and ongoing business of each of them shall be materially unimpaired at the Effective Time, and the Company will comply with its obligations and covenants in the Interim Business Plan;
(b) the Company will not, directly or indirectly, (i) sell, transfer or pledge or agree to sell, transfer or pledge any of the Shares, Preferred Stock or capital stock of any of its Subsidiaries beneficially owned by it; (ii) amend its Articles of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares or Preferred Stock or any outstanding capital stock of any of the Subsidiaries of the Company;
(c) neither the Company nor any of its Subsidiaries Company Subsidiary shall: (i) declareamend its certificate of incorporation or by-laws or similar organizational documents, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, transfer, pledge, dispose of or encumber any additional shares ofof any class or series of its capital stock or Voting Debt, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire acquire, any shares of, capital stock of any class or series of the Company its capital stock or its Subsidiariesany Voting Debt, other than shares Shares reserved for issuance on the date hereof pursuant to the exercise of Company Options or Company Warrants outstanding on the date hereof, (iii) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to any shares of any class or series of its capital stock; (iv) split, combine or reclassify any shares of any class or series of its stock; or (v) redeem, purchase or otherwise acquire directly or indirectly any shares of any class or series of its capital stock, or any instrument or security which consists of or includes a right to acquire such shares;
(c) neither the Company nor any of Company Subsidiaries shall (i) incur or modify any indebtedness or other liability, other than in the ordinary and usual course of business and consistent with past practice; or (ii) modify, amend or terminate any of its material contracts or waive, release or assign any material rights or Claims, except in the ordinary course of business and consistent with past practice;
(d) neither the Company nor any of Company Subsidiaries shall: (i) incur or assume any long-term debt, or except in the ordinary course of business, incur or assume any short-term indebtedness in amounts not consistent with past practice; (ii) modify the terms of any indebtedness or other liability; (iii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person, except as described in the Disclosure Schedule as being in the ordinary course of business and consistent with past practice; (iv) make any loans, advances or capital contributions to, or investments in, any other person (other than to or in wholly owned Subsidiaries of the Company); or (v) enter into any material commitment or transaction (including, but not limited to, any material capital expenditure or purchase, sale or lease of assets or real estate);
(e) neither the Company nor any Company Subsidiary shall transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any material assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any material indebtedness or other liability; or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock;
(df) neither except as otherwise specifically provided in this Agreement or as otherwise described in the Company nor Disclosure Schedule, make any of its Subsidiaries shall: (i) grant any increase change in the compensation payable or to become payable by the Company or any of its Subsidiaries to any of its officers, directors, employees; , agents or consultants (iiother than normal recurring increases in wages to employees who are not officers or directors or Affiliates in the ordinary course of business consistent with past practice) (A) adopt any newor to Persons providing management services, or enter into or amend any employment, severance, consulting, termination or other agreement or employee benefit plan (Bincluding, without limitation any Company health Plan) amend or make any loans to any of its officers, directors, employees, Affiliates, agents or consultants or make any change in its existing borrowing or lending arrangements for or on behalf of any of such Persons pursuant to an employee benefit plan or otherwise;
(g) except as otherwise increasespecifically contemplated by this Agreement or as otherwise described in the Disclosure Schedule, pay or accelerate the make any accrual or arrangement for payment of any pension, retirement allowance or vesting other employee benefit pursuant to any existing plan, agreement or arrangement (including, without limitation any Company health Plan) to any officer, director, employee or Affiliate or pay or agree to pay or make any accrual or arrangement for payment to any officers, directors, employees or Affiliates of the amounts payable Company of any amount relating to unused vacation days, except payments and accruals made in the ordinary course of business consistent with past practice; adopt or pay, grant, issue, accelerate or accrue salary or other payments or benefits pursuant to become payable under any existingpension, profit-sharing, bonus, incentive extra compensation, incentive, deferred compensation, severance, profit sharingstock purchase, stock option, stock purchaseappreciation right, group insurance, pensionseverance pay, retirement or other employee benefit plan (including, without limitation any Company health Plan), agreement or arrangement; , or (iii) enter into any employment or severance consulting agreement with oror for the benefit of any director, except officer, employee, agent or consultant, whether past or present; or amend in accordance any material respect any such existing plan, agreement or arrangement in a manner inconsistent with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company or any its Subsidiariesforegoing;
(eh) neither the Company nor any of its and the Company Subsidiaries shall modify, amend or terminate use commercially reasonable efforts to prevent any of its material contracts or waive, release or assign any material rights or claims thereunder;
(f) neither the Company nor any of its Subsidiaries shall permit any material insurance policy naming it or them as a beneficiary or a loss payable payee to lapse or to be cancelled or terminated without notice to Parent;
(g) neither the Company nor any of its Subsidiaries shall: (i) incur or assume any long-term debt or any short-term indebtedness; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person, except in the ordinary course of business and consistent with past practice; (iii) make any loans, advances or capital contributions to, or investments in, any other person (other than to wholly owned Subsidiaries of the Company or customary loans or advances to employees in accordance with past practice); or (iv) enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate);
(h) neither the Company nor any of its Subsidiaries shall change any of the accounting methods used by it unless required by GAAPcomparable substitute insurance is obtained;
(i) neither the Company nor any of its Company Subsidiaries shall enter into any contract or transaction relating to the purchase of assets other than in the ordinary course of business consistent with prior practices;
(j) neither the Company nor any Company Subsidiary shall pay, repurchase, discharge or satisfy any claims, of its Claims or other liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of any such claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company business and its consolidated Subsidiariesconsistent with past practice;
(jk) neither the Company nor any of its Company Subsidiaries will adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries Company Subsidiary (other than the Merger);
(kl) neither the Company nor any Company Subsidiary will (i) change any of the accounting methods used by it unless required by GAAP or (ii) make any material election relating to Taxes, change any material election relating to Taxes already made, adopt any material accounting method relating to Taxes, change any material accounting method relating to Taxes unless required by GAAP, enter into any closing agreement relating to Taxes, settle any Claim or assessment relating to Taxes or consent to any such claim or assessment relating to Taxes or any waiver of the statute of limitations for any such claim or assessment;
(m) except for this Agreement and the transactions expressly contemplated hereby, take any action or fail to take any action that could limit the utilization of any of the net operating losses, built-in losses, tax credits or other similar items of the Company and its Subsidiaries under Section 382, 383, 384 or 1502 of the Code and the Treasury Regulations thereunder;
(n) accelerate the collection of receivables or defer the payment of payables, or modify the payment terms of any receivables or payables, other than immaterial changes in a manner consistent with prudent and past business practice;
(o) neither the Company nor any of its Company Subsidiaries will take, or agree to commit to take, any action that would or is reasonably likely to result in any of the conditions to the Offer set forth in ANNEX A or any of the conditions to the Merger set forth in ARTICLE VI not being satisfied, or would make any representation or warranty of the Company contained herein, in the case of any representation or warranty not qualified by materiality, materially inaccurate or, in the case of any other representation or warranty, herein inaccurate in any material respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company, Parent, Purchaser or the holders of Shares to consummate the Offer or the Merger in accordance with the terms hereof or materially delay such consummation; and
(lp) neither the Company nor any of its Company Subsidiaries will enter into an agreement, contract, binding commitment or binding arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.
Appears in 1 contract
Samples: Merger Agreement (U S Realtel Inc)
Interim Operations of the Company. The Company covenants and agrees that, except (i) as expressly contemplated by this Agreement, or (ii) as set forth in Section 5.1 of the Company's Disclosure Schedule or (iii) as agreed in writing by Parent, after the date hereof, and prior to the time the designees directors of the Purchaser have been elected to, and shall constitute a majority of, the Board of Directors of the Company pursuant to Section 1.3 (the "Appointment Date"):
(a) the business of the Company and its Subsidiaries shall be conducted only in the ordinary and usual course and, to the extent consistent therewith, each of the Company and its Subsidiaries shall use its commercially best reasonable best efforts to preserve its business organization intact and maintain its existing relations with customers, suppliers, employees, creditors and business partners;
(b) the Company will not, directly or indirectly, (i) except upon exercise of employee stock options or other rights to purchase shares of Common Stock pursuant to the ESPP outstanding on the date hereof, issue, sell, transfer or pledge or agree to sell, transfer or pledge any treasury stock of the Shares, Preferred Stock Company or any capital stock of any of its Subsidiaries beneficially owned by it; , (ii) amend its Articles Certificate of Incorporation or Bylaws By-laws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares or Preferred Stock or any outstanding capital stock of any of the Subsidiaries of the Company;
(c) neither the Company nor any of its Subsidiaries shall: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stockstock other than dividends paid by Subsidiaries of the Company to the Company or any of its Subsidiaries in the ordinary course of business; (ii) issue, sell, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire any shares of, capital stock of any class of the Company or its Subsidiaries, other than shares reserved for issuance on the date hereof pursuant to the exercise of Options outstanding on the date hereof; (iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any material assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any material indebtedness or other liability; or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock;
(d) neither the Company nor any of its Subsidiaries shall: (i) grant any increase in the compensation payable or to become payable by the Company or any of its Subsidiaries to any of its employees; (ii) (A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under any existing, bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company or any its Subsidiaries;
(e) neither the Company nor any of its Subsidiaries shall modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims thereunder;
(f) neither the Company nor any of its Subsidiaries shall permit any material insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to Parent;
(g) neither the Company nor any of its Subsidiaries shall: (i) incur or assume any long-term debt or any short-term indebtedness; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person, except in the ordinary course of business and consistent with past practice; (iii) make any loans, advances or capital contributions to, or investments in, any other person (other than to wholly owned Subsidiaries of the Company or customary loans or advances to employees in accordance with past practice); or (iv) enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate);
(h) neither the Company nor any of its Subsidiaries shall change any of the accounting methods used by it unless required by GAAP;
(i) neither the Company nor any of its Subsidiaries shall pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company and its consolidated Subsidiaries;
(j) neither the Company nor any of its Subsidiaries will adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than the Merger);
(k) neither the Company nor any of its Subsidiaries will take, or agree to commit to take, any action that would make any representation or warranty of the Company contained herein, in the case of any representation or warranty not qualified by materiality, materially inaccurate or, in the case of any other representation or warranty, inaccurate in any respect at, or as of any time prior to, the Effective Time; and
(l) neither the Company nor any of its Subsidiaries will enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.
Appears in 1 contract
Interim Operations of the Company. The Company covenants and agrees that, except (i) as expressly contemplated by this Agreement, Agreement or (ii) as set forth in Section 5.1 of the Company's Disclosure Schedule or (iii) as agreed in writing by Parentthe Purchaser, after the date hereof, hereof and prior to the time the designees of the Purchaser have been elected to, and shall constitute a majority of, the Board of Directors of the Company pursuant to Section 1.3 (the "Appointment Date"):Effective Time:
(a) the business of the Company and each of its Subsidiaries shall be conducted only in the ordinary and usual course and, to the extent consistent therewith, each of the Company and its Subsidiaries shall use its commercially reasonable best efforts to preserve its business organization intact and maintain its existing relations with customers, suppliers, employees, creditors creditors, business partners and others having business partnersdealings with them;
(b) the Company will shall not, directly or indirectly, (i) sell, transfer or pledge or agree to sell, transfer or pledge any of the Shares, Preferred Stock or capital stock of and shall not permit any of its Subsidiaries beneficially owned by it; to: (iii) amend its Articles certificate of Incorporation incorporation or Bylaws bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares or Preferred Stock or any outstanding capital stock of any of the Subsidiaries of the Company;
(c) neither the Company nor any of its Subsidiaries shall: (iii) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock, except that a wholly owned Subsidiary of the Company may declare and pay a dividend or make advances to its parent or the Company; (iiiii) issue, sell, transfer, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire any shares of, capital stock of any class or Voting Debt of the Company or any of its Subsidiaries, other than shares of Company Common Stock reserved for issuance on the date hereof issuances pursuant to the exercise of Options outstanding on the date hereof; (iiiiv) split, combine or reclassify the outstanding Company Common Stock or any outstanding capital stock of any of the Subsidiaries of the Company; or (v) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock or any instrument or security which consists of or includes a right to acquire such shares;
(c) the Company shall not, and shall not permit any of its Subsidiaries to, transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any material assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any material indebtedness or provided that such transactions, other liability; or (iv) redeemthan sales of inventory, purchase or otherwise acquire directly or indirectly any of its capital stockdo not exceed $50,000 per transaction and $250,000 in the aggregate;
(d) neither the Company nor shall not, and shall not permit any of its Subsidiaries shallto, acquire or publicly propose to acquire or agree to acquire (i) by merging or consolidating with, or by purchasing an equity interest in or a substantial portion of the assets of, or by any other manner, any business or any corporation, partnership, joint venture, association or other business organization or division thereof or (ii) any assets having a cost in excess of $50,000 individually or $500,000 in the aggregate;
(e) except in substantial accordance with the historical practice of the Company with respect to persons that are not executive officers or directors of the Company or any of its Subsidiaries, the Company shall not, and shall not permit any of its Subsidiaries to: (i) grant any increase in the non-equity-based compensation payable or to become payable by the Company or any of its Subsidiaries to any of its employees; (ii) directors, executive officers or employees or (A) enter into or adopt any new, new or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts any benefit or amount payable or to become payable under under, any existing, bonus, non-equity-based incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other non-equity-based employee benefit plan agreement plan, or other contract, agreement, commitment, arrangement, plan, trust fund or policy maintained or contributed to or entered into by the Company or any of its Subsidiaries; or (iiiii) enter into any employment (other than "at will") or severance agreement with or, except in accordance with the existing written policies of the CompanyCompany existing on the date hereof, grant any severance or termination pay to any officer, director or employee of the Company or any of its Subsidiaries;
(ef) neither the Company nor shall not, and shall not permit any of its Subsidiaries shall modify, amend to: grant any increase in the equity-based compensation payable or terminate to become payable by the Company or any of its Subsidiaries to any of its directors, executive officers or employees or (i) enter into or adopt any new or (ii) amend or otherwise increase, or accelerate the payment or vesting of any benefit or amount payable or to become payable under, any equity-based incentive compensation, stock option, stock purchase or other equity-based employee benefit plan, or other equity-based contract, agreement, commitment, arrangement, plan, trust fund or policy maintained or contributed to or entered into by the Company or any of its Subsidiaries;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into new contracts, modify, amend, terminate, renew or fail to use reasonable business efforts to renew any contract or agreement to which the Company or any of its Subsidiaries is a party, which is material contracts to the Company and its Subsidiaries taken as a whole and provided that the term of any new contract or any contract modification, amendment or renewal does not exceed twelve months, and, PROVIDED FURTHER, that no loans or advances shall be made or extended to any customer in connection with any such contract, modification, amendment or renewal, or waive, release or assign any material rights or claims thereundertherein or (ii) enter into, modify, amend, or renew any contract or agreement if the dollar value of such new contract or agreement, or existing contract or agreement as so amended, modified, or renewed, is or would be in excess of $50,000 (not to exceed $500,000 in the aggregate) or have an initial term (or a renewal or extension term) greater than twelve months;
(fh) neither the Company nor shall, and shall cause each of its Subsidiaries to, maintain with insurance companies reasonably believed by the Company to be financially responsible insurance in such amounts and against such risks and losses as are customary for companies engaged in the business of the Company and its Subsidiaries;
(i) the Company shall not, and shall not permit any of its Subsidiaries shall permit any material insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to Parent;
(g) neither the Company nor any of its Subsidiaries shallto: (i) incur or assume any long-term debt or incur or assume any short-term indebtedness; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person, except in the ordinary course of business and consistent with past practice; (iii) make any loans, advances or capital contributions to, or investments in, any other person (other than to wholly owned Subsidiaries of the Company or customary loans or advances to employees in accordance consistent with past practice); or (iv) enter into make any material commitment or transaction (including, but not limited to, any borrowing, new capital expenditure or purchaseexpenditures which exceed the amounts budgeted therefor in the 2003 capital expenditure budget for the Company, sale or lease a copy of assets or real estate)which has been provided to the Purchaser;
(hj) neither the Company nor shall not, and shall not permit any of its Subsidiaries shall to, change any of the accounting methods principles used by it except as required by law, rule, regulation or GAAP;
(k) the Company shall not, and shall not permit any of its Subsidiaries to, make any material Tax election other than in the ordinary course of business and consistent with past practice, change any material Tax election already made, adopt any material accounting method relating to Taxes, change any material accounting method relating to Taxes unless required by GAAP, settle or compromise any Tax liability in excess of $50,000 arising from or in connection with any single issue or consent to any waiver of the statute of limitations for any such tax liability;
(il) neither the Company nor shall not, and shall not permit any of its Subsidiaries shall to, pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations (i) in the ordinary course of business and consistent with past practice, properly reflected or reserved against in, or contemplated by, in the consolidated financial statements (or the notes thereto) as of and for the fiscal year ended June 30, 2002 of the Company and its consolidated SubsidiariesSubsidiaries or (ii) incurred since June 30, 2002 in the ordinary course of business and consistent with past practice; PROVIDED, HOWEVER, that notwithstanding the foregoing, the Company shall be entitled to pay on a timely basis all reasonable, documented fees and expenses related to this Agreement and the transactions contemplated hereby;
(jm) neither the Company nor shall not, and shall not permit any of its Subsidiaries will to adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than the Merger);
(kn) neither the Company nor shall not, and shall not permit any of its Subsidiaries will to, amend, renew, terminate or cause to be extended any lease, agreement or arrangement relating to any of its leased properties or enter into any lease, agreement or arrangement with respect to any real property;
(o) the Company shall, and shall cause each of its Subsidiaries to, use reasonable best efforts to maintain in effect all existing Permits that are material to the operations of the Company or any of its Subsidiaries;
(p) subject to the other restrictions set forth in this SECTION 5.1, the Company shall not, and shall not permit any of its Subsidiaries to, enter into any agreement or arrangement with any of their respective affiliates other than such agreements and arrangements as are entered into in the usual, ordinary and regular course of business and which have been negotiated on an arms-length basis and are no less favorable to the Company or its Subsidiaries than the Company or such Subsidiary would have obtained from an unaffiliated third party, and PROVIDED THAT the Company shall have scheduled such items pursuant to SCHEDULE 3.7 or, if after the date of this Agreement, the Company shall have notified the Purchaser in writing prior to entering into any such affiliate transaction;
(q) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree to commit to take, any action that (i) would to the Company's knowledge make any representation or warranty of the Company contained herein, in the case of any representation or warranty not qualified by materiality, materially inaccurate or, in the case of any other representation or warranty, herein inaccurate in any respect at, or as of any time prior to, the Effective Time, (ii) would result in any of the conditions to the consummation of the Merger set forth in ARTICLE VI not being satisfied or (iii) would materially impair the ability of the Company or the Purchaser to consummate the Merger in accordance with the terms hereof or materially delay such consummation; and
(lr) neither the Company nor shall not, and shall not permit any of its Subsidiaries will to, enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.
Appears in 1 contract
Samples: Merger Agreement (Prophet 21 Inc)
Interim Operations of the Company. The Company covenants and agrees that, except as (i) as expressly contemplated by provided to the contrary in this Agreement, (ii) as set forth disclosed in Section 5.1 of the Company's Disclosure Schedule or (iii) as agreed approved in writing by ParentParent (which approval Parent shall not unreasonably withhold, delay, or condition), after the date hereof, of this Agreement and prior to the time the designees of the Purchaser have been elected to, and shall constitute a majority of, the Board of Directors of the Company pursuant to Section 1.3 (the "Appointment Date"):Effective Time:
(a) the business of the Company and its Subsidiaries shall be conducted only in the ordinary course consistent with the requirements of law and usual course past practice and, to the extent consistent therewith, each of the Company and its Subsidiaries shall use its commercially reasonable best efforts to preserve its business organization intact and maintain its existing relations with customers, suppliers, employees, creditors and business partners, and the Company shall use its reasonable efforts to cause the key executive employees of the Company (such individuals being later collectively referred to as the "Key Executives" or individually as a "Key Executive" (which Key Executives are identified and listed on Section 5.1 of the Disclosure Schedule) to continue to perform their duties as currently performed for the Company;
(b) the Company will not, directly or indirectly, split, combine or reclassify the outstanding Company Common Stock;
(c) the Company shall not: (i) sell, transfer or pledge or agree to sell, transfer or pledge any of the Shares, Preferred Stock or capital stock of any of its Subsidiaries beneficially owned by it; (ii) amend its Articles of Incorporation or Bylaws or similar organizational documentsBylaws; or (iii) split, combine or reclassify the outstanding Shares or Preferred Stock or any outstanding capital stock of any of the Subsidiaries of the Company;
(c) neither the Company nor any of its Subsidiaries shall: (iii) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (iiiii) issue, sell, transfer, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire acquire, any shares of, of the capital stock of any class of the Company or its SubsidiariesCompany, other than shares reserved for issuance on the date hereof issuances pursuant to the exercise of Company Options and Company benefit plan obligations disclosed in Section 3.9(a) of the Disclosure Schedule, in each case which are outstanding on the date hereof; (iiiiv) transfer, lease, license, sell, mortgage, pledge, dispose of, of or encumber any material assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any material indebtedness or other liabilitybusiness; or (ivv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock;
(d) neither the Company nor any of its Subsidiaries shallshall not, except as required by law or as otherwise expressly provided elsewhere in this Agreement: (i) grant any increase in the compensation payable or to become payable by the Company or any of its Subsidiaries to any of its employees; (ii) the Key Executives, key employees or directors or (A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under any existing, bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan agreement agreement, program, fund, policy, practice or arrangement; or (iiiii) enter into any, or amend any existing, employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company; provided, however, that the Company may, in the ordinary course of business, consistent with past practice, enter into termination agreements or arrangements with employees other than any its Subsidiaries;Key Executive (collectively, the "Non-Key Employees"), so long as the aggregate value of such agreements and arrangements does not exceed the aggregate amounts that are payable under the Company's present Severance Pay Plan listed in Section 3.9(a) of the Disclosure Schedule by more than $100,000, and with respect to any individual Non-Key Employee does not have a value not in excess of $10,000.
(e) neither the Company nor any of its Subsidiaries shall not modify, amend or terminate any of its material contracts the Material Company Agreements or waive, release or assign any material rights or claims thereunderwith respect to such Material Company Agreements, except in the ordinary course of business and consistent with past practice;
(f) neither the Company nor any of its Subsidiaries shall not permit any material insurance policy naming it as a beneficiary or a loss payable payee to be cancelled canceled or terminated without notice to and consent of Parent, unless equivalent replacement policies, without lapse of coverage, shall be put in place;
(g) neither the Company nor any of its Subsidiaries shallshall not: (i) except as described in Section 5.1of the Disclosure Schedule, incur or assume any long-term debt indebtedness for borrowed money or enter into any short-term indebtednesscapital leases or other arrangements with similar economic effects except pursuant to the Existing Credit Documents (as later defined); (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person, except in the ordinary course of business and consistent with past practice; (iii) make any loans, advances or capital contributions to, or investments in, any other person (other than to wholly owned Subsidiaries of the Company or customary loans or advances to employees in accordance with past practice); or (iv) except as described in Section 5.1 of the Disclosure Schedule, enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estateassets);
(h) neither the Company nor shall not settle or compromise any of its Subsidiaries shall change any of the accounting methods used by it unless required by GAAP;
(i) neither claim, liability or obligation which is described in the Company nor any of its Subsidiaries SEC documents filed prior to the date hereof and the Company shall not pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations obligations, (x) to the extent reflected or reserved against in, or contemplated by, the consolidated financial statements Company Balance Sheet (or the notes thereto), (y) incurred in the ordinary course of business and consistent with past practice or (z) which are legally required to be paid, discharged or satisfied (provided that if such claims, liabilities or obligations referred to in this clause (z) are legally required to be paid and are also not otherwise payable in accordance with clauses (x) or (y) above, the Company will notify Parent in writing if such claims, liabilities or obligations exceed, individually or in the aggregate, $200,000 in value, reasonably in advance of their payment), provided that notwithstanding anything to the contrary set forth in this Section 5.1(h), the Company shall not settle or compromise any claim or litigation brought by any stockholder of the Company and its consolidated Subsidiariesmaking such claim or bringing such litigation as such a stockholder, either individually or on behalf of any class;
(ji) neither the Company nor any of its Subsidiaries will not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than with respect to the Merger);
(j) the Company will not change any method of accounting or any accounting principle or practice, except for changes required by a concurrent change in GAAP;
(k) neither the Company nor any of its Subsidiaries will not take, or agree to commit to take, any action that would make any representation or warranty of the Company contained herein, in the case of any representation or warranty not qualified by materiality, materially this Agreement inaccurate or, in the case of any other representation or warranty, inaccurate in any respect at, or as of any time prior to, the Effective Time;
(l) the Company shall (i) use reasonable efforts to maintain or otherwise preserve its rights in all of the Intellectual Property owned by the Company that is material to the business and operations of the Company and use reasonable efforts not to permit any of such Intellectual Property to lapse, expire or go abandoned by any action or inaction on its part; (ii) diligently and responsively prosecute all applications or registrations before whichever Governmental Entity the same may be pending; and (iii) not allow any rights with respect to trademarks material to the Company to go abandoned for failure to timely file new applications for registrations corresponding to the subject matter thereof;
(m) the Company shall not voluntarily make or agree to make any material change in any Tax accounting method, waive or consent to the extension of any statute of limitations with respect to income or other material Taxes, or consent to any material assessment of Taxes, or settle any judicial proceeding affecting any material amount of Taxes;
(n) the Company shall not fail to take all reasonable steps in defense of any claim (which would be disclosable by the Company in a filing pursuant to the Exchange Act or the Securities Act) asserted against the Company in any proceedings before any Governmental Entity; and
(lo) neither Except as otherwise expressly permitted in this Agreement, the Company nor shall not (i) issue, sell or otherwise distribute or dispose of any shares of its Subsidiaries Company Common Stock to, (ii) become indebted in respect of borrowed money or make any commitment with respect to borrowed money from, (iii) sell (other than sales of retail merchandise), distribute, mortgage, license, lease or otherwise dispose of any assets of the Company to, or (iv) enter into any other such agreement, arrangement or transaction involving the Company s assets or finances with any officer, director or legal or beneficial owner of more than 5% of the Company Common Stock and their affiliates, without the prior consent of Parent, which consent is in Parent s sole and absolute discretion;
(p) the Company shall not make, or commit to make, any capital expenditures in excess of $100,000 for each such individual expenditure or $300,000 in the aggregate;
(q) the Company shall not amend, modify, supplement or terminate any agreement listed in Sections 3.24(a)(i) and 3.24(a)(ii) of the Disclosure Schedule with respect to Real Property or enter into any new agreement or arrangement with respect to real property; except Company may, with Parent s written consent, which consent may not be unreasonably withheld, delayed or conditioned, enter into and execute subordination agreements, estoppel certificates and similar instruments required to be executed pursuant to the terms of the agreements listed in Sections 3.24(a)(i) or 3.24(a)(ii) with respect to the Real Property leases;
(r) the Company will not enter into any agreement, contract or other commitment with any beneficial owner of more than 5% of the Company Common Stock without Parent s consent, which consent is in Parent s sole and absolute discretion; and
(s) the Company will not enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.
Appears in 1 contract
Interim Operations of the Company. The Company covenants and agrees that, except (i) as expressly contemplated by this Agreementset forth in Section 4.1 of the Disclosure Schedule, (ii) as set forth in Section 5.1 of the Company's Disclosure Schedule specifically contemplated by this Agreement or (iii) as agreed in writing by the Parent, after during the period from the date hereof, and prior hereof to the time the designees of the Purchaser have been elected to, and shall constitute a majority of, the Board of Directors of the Company pursuant to Section 1.3 (the "Appointment Date"):Effective Time:
(a) the business of the Company and its Subsidiaries shall be conducted only in the ordinary Ordinary Course of Business and usual course andin compliance with all applicable laws and regulations, to the extent consistent therewith, each of and the Company and its Subsidiaries shall use its commercially reasonable best efforts to preserve its and its Subsidiaries' business organization intact intact, keep available the services of its and its Subsidiaries' current officers and employees and maintain its and its Subsidiaries' existing relations with franchisees, customers, suppliers, employeescreditors, creditors business partners and others having business partnersdealings with it, to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time;
(b) neither the Company will not, directly or indirectly, (i) sell, transfer or pledge or agree to sell, transfer or pledge any of the Shares, Preferred Stock or capital stock of nor any of its Subsidiaries beneficially owned by it; shall make or commit to make capital expenditures in excess of $50,000 in the aggregate in any consecutive twelve (ii12) amend its Articles of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares or Preferred Stock or any outstanding capital stock of any of the Subsidiaries of the Companymonth period;
(c) increase the aggregate amount of the Company's or any of its Subsidiaries' accounts payable by an aggregate amount greater than $50,000;
(d) neither the Company nor any of its Subsidiaries shall: (i) declare, set aside amend the Certificate of Incorporation or pay any dividend Bylaws or other distribution payable in cash, stock or property with respect to its capital stocksimilar organizational documents of the Company's Subsidiaries; (ii) issue, sell, transfer, pledge, dispose of or encumber any additional shares ofof any class or series of its capital stock or Voting Debt, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire acquire, any shares of, capital stock of any class or series of the Company its capital stock or its Subsidiariesany Voting Debt, other than issue shares reserved for issuance on the date hereof pursuant to of Company Common Stock upon the exercise of Options outstanding on the date hereofhereof (to the extent then exercisable); (iii) transferdeclare, lease, license, sell, mortgage, pledge, dispose of, set aside or encumber pay any material assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any material indebtedness dividend or other liabilitydistribution payable in cash, stock or property with respect to any shares of any class or series of its capital stock; (iv) split, combine or reclassify any shares of any class or series of its stock; or (ivv) redeem, purchase or otherwise acquire directly or indirectly any shares of any class or series of its capital stock;
(d) neither the Company nor any of its Subsidiaries shall: (i) grant any increase in the compensation payable or to become payable by the Company , or any instrument or security which consists of its Subsidiaries or includes a right to any of its employees; (ii) (A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under any existing, bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company or any its Subsidiariesacquire such shares;
(e) neither the Company nor any of its Subsidiaries shall modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims thereunder;
(f) neither the Company nor any of its Subsidiaries shall permit any material insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to Parent;
(g) neither the Company nor any of its Subsidiaries shall: (i) incur or assume modify any long-term debt indebtedness or any short-term indebtednessother liability (absolute, accrued, contingent or otherwise), other than in the Ordinary Course of Business; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the liabilities or obligations of any other person, except in the ordinary course of business and consistent with past practice; or (iiiiv) make any loans, advances or capital contributions to, or investments in, any other person person;
(f) neither the Company nor any of its Subsidiaries shall transfer, lease, license, sell, mortgage, pledge, dispose of, encumber or otherwise dispose of any assets or subject any assets to any Security Interest other than to wholly owned Subsidiaries in the Ordinary Course of Business;
(g) neither the Company or customary loans or advances to employees in accordance with past practice); or (iv) nor any of its Subsidiaries shall enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or to purchase, sale sell or lease of assets or real estate)any Real Property;
(h) neither the Company nor any of its Subsidiaries shall (i) make any change in the compensation payable or to become payable to any of its officers, directors, employees, agents or consultants or to persons providing management services (other than normal recurring increases in wages in the accounting methods used by it unless required by GAAPOrdinary Course of Business to employees who are not officers or directors); or (ii) enter into or amend any employment, severance, consulting, termination or other agreement, including any Employee Benefit Plan, with, or make any loans to, any of its stockholders, officers, directors, employees, agents or consultants or make any change in its existing borrowing or lending arrangements for or on behalf of any of such persons pursuant to an Employee Benefit Plan or otherwise;
(i) neither the Company nor any of its Subsidiaries shall: (i) pay or make any accrual or arrangement for payment of any pension, retirement allowance or other employee benefit pursuant to any existing Employee Benefit Plan, agreement or arrangement to any officer, director or employee or pay or agree to pay or make any accrual or arrangement for payment to any officers, directors or employees of the Company or any of its Subsidiaries of any amount relating to unused vacation days, except payments and accruals made in the Ordinary Course of Business, or except as required by law or the express terms of this Agreement; (ii) adopt or pay, grant, issue, accelerate or accrue salary or other payments or benefits pursuant to any pension, profit-sharing, bonus, extra compensation, incentive, deferred compensation, stock purchase, stock option, stock appreciation right, group insurance, severance pay, retirement or other employee benefit plan, agreement or arrangement, or any employment or consulting agreement with or for the benefit of any director, officer, employee, agent or consultant, whether past or present, or except as required by law, the express terms of an employee Benefit Plan, or the express terms of third Agreement; or (iii) amend in any material respect any such existing plan, agreement or arrangement in a manner inconsistent with the foregoing;
(j) neither the Company nor any of its Subsidiaries shall: (i) modify, amend or terminate, or take or omit to take any action that would constitute a violation or a default under, any Material Contract, or waive, release or assign any material rights or claims thereunder; (ii) enter into any Contract requiring the Company or any of its Subsidiaries to pay in excess of $10,000 in the aggregate in any consecutive twelve (12) month period; or (iii) enter into any Contract containing, or otherwise subject the Surviving Corporation or the Parent to, any non-competition, exclusivity, "most favorable nation" or other material restriction;
(k) neither the Company nor any of its Subsidiaries shall permit any insurance policy naming it as a beneficiary or a loss payable payee to be canceled or terminated without notice to Parent, except policies providing coverage for losses not in excess of $25,000;
(l) neither the Company nor any of its Subsidiaries shall enter into any Contract or transaction relating to the purchase or sale of assets other than in the Ordinary Course of Business;
(m) neither the Company nor any of its Subsidiaries shall pay, repurchase, discharge or satisfy any of its claims, liabilities liabilities, Security Interests or other obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the Ordinary Course of any such Business of claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company and its consolidated SubsidiariesBalance Sheet;
(jn) neither the Company nor any of its Subsidiaries will shall adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than the Merger);
(ko) neither the Company nor any of its Subsidiaries will shall do any act or omit to do any act whereby any material Intellectual Property owned by the Company may lapse, become abandoned, dedicated to the public, or rendered unenforceable;
(p) neither the Company nor any of its Subsidiaries shall initiate any litigation or arbitration proceeding or settle any litigation or arbitration proceeding;
(q) neither the Company nor any of its Subsidiaries shall take, or agree to or commit to take, any action that results, or would reasonably be likely to result, in any of the conditions to the Merger set forth in Article V not being satisfied, or would make any representation or warranty of the Company contained herein, in the case of any representation or warranty not qualified by materiality, materially inaccurate or, in the case of any other representation or warranty, herein inaccurate in any respect at, or as of any time prior to, the Effective Time; and, or that would materially impair the ability of the Company, the Parent, the Transitory Subsidiary or the holders of the Company Common Stock to consummate the Merger in accordance with the terms hereof or materially delay such consummation;
(lr) the Company shall not, except as required by GAAP as concurred with by its independent auditors, make any material change in its methods or principals of accounting since the date of the Balance Sheet;
(s) neither the Company nor any of its Subsidiaries will shall: (i) make, revoke, or amend any Tax election; (ii) file any Tax Return; (iii) consent to extend the period of limitations for the payment or assessment of any Tax; (iv) enter into any agreement with any Governmental Entity affecting any Tax liability or refund; or (v) settle or compromise any Tax liability or refund; and
(t) neither the Company nor any of its Subsidiaries shall enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.
Appears in 1 contract
Samples: Merger Agreement (Gsi Lumonics Inc)
Interim Operations of the Company. The Company covenants and agrees that, on or after the date hereof and prior to the Closing Date, except (i) as expressly provided in this Agreement or as required to consummate the transactions contemplated by this Agreement, (ii) or as set forth in Section Schedule 5.1 of the Company's Disclosure Schedule hereof or (iii) as may be agreed in writing in advance by Parent, after the date hereof, and prior to the time the designees of the Purchaser have been elected to, and shall constitute a majority of, the Board of Directors of the Company pursuant to Section 1.3 (the "Appointment Date"):Purchaser:
(a) the business of the Company and its Subsidiaries each Company Subsidiary shall be conducted only in the ordinary Ordinary Course of Business, and usual course and, to the extent consistent therewith, each of the Company and its Subsidiaries shall use its commercially reasonable best efforts to (i) preserve its the business organization intact of the Company and each Company Subsidiary intact, (ii) keep available the services of the current officers and employees of the Company and each Company Subsidiary and (iii) maintain its the existing relations with customers, suppliers, employeescreditors, creditors business partners and others having business partnersdealings with the Company or any Company Subsidiary, to the end that the goodwill and ongoing business of the Company and the Company Subsidiaries, taken as a whole, shall be unimpaired in any materially adverse manner at the Closing Date. Neither the Company nor any Company Subsidiary shall institute any new methods of manufacture, purchase, lease, management, accounting or operation or engage in any transaction or activity other than changes in the Ordinary Course of Business;
(b) the Company will not, directly or indirectly, (i) sell, transfer or pledge or agree to sell, transfer or pledge any of the Shares, Preferred Stock or capital stock of any of its Subsidiaries beneficially owned by it; (ii) amend its Articles of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares or Preferred Stock or any outstanding capital stock of any of the Subsidiaries of the Company;
(c) neither the Company nor any of its Subsidiaries Company Subsidiary shall: (i) declareamend its Governing Documents, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, transfer, pledge, dispose of or encumber any additional shares ofof any class or series of its capital stock or Voting Debt, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire acquire, any shares of, capital stock of any class or series of the Company its capital stock or its Subsidiariesany Voting Debt, other than shares of Company Common Stock reserved for issuance on the date hereof pursuant to the exercise of Options Company Options, in each case outstanding on the date hereof; , (iii) transferdeclare, lease, license, sell, mortgage, pledge, dispose of, set aside or encumber pay any material assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any material indebtedness dividend or other liabilitydistribution payable in cash, stock or property with respect to any shares of any class or series of its capital stock; (iv) split, combine or reclassify any shares of any class or series of its stock; or (ivv) redeem, purchase or otherwise acquire directly or indirectly any shares of any class or series of its capital stock, or any instrument or security which consists of or includes a right to acquire such shares;
(c) neither the Company nor any Company Subsidiary shall organize any new Subsidiary or acquire any capital stock or other equity securities, or equity or ownership interest in the business, of any other Person;
(d) neither the Company nor any of its Subsidiaries shall: Company Subsidiary shall (i) grant any increase in the compensation payable modify, amend or to become payable by the Company or terminate any of its Subsidiaries to Material Contracts or waive, release or assign any material rights or claims, except in the Ordinary Course of its employees; Business or (ii) (A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under any existing, bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies a Change of the Company, grant any severance or termination pay to any officer, director or employee of the Company or any its SubsidiariesControl Agreement;
(e) neither the Company nor any of its Subsidiaries shall modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims thereunder;
(f) neither the Company nor any of its Subsidiaries shall permit any material insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to Parent;
(g) neither the Company nor any of its Subsidiaries Subsidiary shall: (i) other than pursuant to the Zions Bank Loan or the Credit Suisse Loan, incur or assume any long-term debt or any short-term indebtednessIndebtedness other than trade payables in the Ordinary Course of Business; (ii) pay, repay, discharge, purchase, repurchase or satisfy any Indebtedness (other than short term Indebtedness paid in the Ordinary Course of Business) issued or guaranteed by the Company or any Company Subsidiary, except as required by the terms thereof or this Agreement; (iii) modify the terms of any Indebtedness or, except in the Ordinary Course of Business, any other Liability, (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person, except in the ordinary course of business and consistent with past practice; (iii) make any loans, advances or capital contributions to, or investments in, any other person Person (other than to wholly owned Subsidiaries of the Company or customary loans or advances to employees in accordance with past practicea Company Subsidiary); or , (ivv) enter into any material commitment or transaction transaction, other than those entered into in the Ordinary Course of Business; (includingvi) except in the Ordinary Course of Business, but not limited write down the value of any inventory or write off as uncollectible any notes or accounts receivable; or (vii) dispose of or permit to lapse any rights to any material Company Intellectual Property;
(f) neither the Company nor any Company Subsidiary shall lease, license, mortgage, pledge or encumber any assets other than in the Ordinary Course of Business or transfer, sell or dispose of any assets other than in the Ordinary Course of Business;
(g) except as set forth in Section 5.18 and Section 5.19 hereof, neither the Company nor any Company Subsidiary shall make any change in the compensation payable or to become payable to, or enter into or amend any employment, consulting, severance, termination, or other Contract with, or employee benefit for, or make any loan or advance to, any borrowingof its officers, capital expenditure directors, Affiliates or purchase, sale or lease of assets or real estate)Related Persons;
(h) neither the Company nor any Company Subsidiary shall, except in the Ordinary Course of its Subsidiaries shall change Business and except pursuant to the Company Retention Agreements, (i) pay or make any accrual or arrangement for payment of any pension, retirement allowance or other employee benefit pursuant to any existing plan, Contract or arrangement to any officer, director, employee or Affiliate or pay or agree to pay or make any accrual or arrangement for payment to any officer, director, employee or Affiliate of any amount relating to unused vacation days, except to the accounting methods used extent the Company or any Company Subsidiary is obligated to do so on the date hereof or is subsequently obligated to do so by it unless required Law or, in the case of employees that are not officers would, in the Ordinary Course of Business, make such payment, accrual or arrangement, (ii) adopt or pay, grant, issue, accelerate or accrue salary or other payments or benefits pursuant to any Benefit Plan, or any employment or consulting Contract with or for the benefit of any director, officer, employee, agent or consultant, whether past or present, except to the extent the Company or any Company Subsidiary is obligated to do so on the date hereof or is subsequently obligated to do so by GAAPLaw, or (iii) amend in any material respect any such plan, Contract or arrangement in a manner inconsistent with the foregoing;
(i) neither the Company nor any Company Subsidiary shall permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to Purchaser, except policies which are replaced without any material diminution of or gaps in coverage;
(j) neither the Company nor any Company Subsidiary shall enter into any Contract or transaction, or related series of Contracts or transactions, involving the expenditure in excess of $50,000.00 and relating to the purchase of assets other than in the Ordinary Course of Business or pursuant to its Subsidiaries existing capital expenditure budget made available to Purchaser in Section “II.I.” of the Electronic Data Room;
(k) neither the Company nor any Company Subsidiary shall pay, repurchase, discharge or satisfy any of its claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the Ordinary Course of any such Business of claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (Financial Statements or incurred since the notes thereto) Balance Sheet Date in the Ordinary Course of the Company and its consolidated SubsidiariesBusiness;
(jl) neither the Company nor any of its Subsidiaries will Company Subsidiary shall adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than the Merger)Company Subsidiary;
(km) neither the Company nor any of its Subsidiaries will Company Subsidiary shall take, or agree to or commit to take, any action that would result in any of the conditions to the Closing set forth in Article VI and Article VII not being satisfied, or would make any representation or warranty of the Company or any Company Subsidiary contained herein, in the case of any representation or warranty not qualified by materiality, materially inaccurate or, in the case of any other representation or warranty, herein inaccurate in any respect at, or as of any time prior to, the Effective TimeClosing Date, or that would materially impair the ability of the Company or Purchaser to consummate the Closing in accordance with the terms hereof or materially delay such consummation; and
(ln) neither the Company nor any of its Subsidiaries will Company Subsidiary shall enter into an agreement, contractany Contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do do, any of the foregoing.
Appears in 1 contract
Interim Operations of the Company. The Company covenants and agrees that, except (i) as expressly contemplated by this Agreement, (ii) as set forth in Section 5.1 of the Company's Company Disclosure Schedule Schedule, as required by Law, or (iii) as agreed unless Parent shall otherwise consent in writing by Parent(which consent shall not be unreasonably withheld or delayed), after the date hereofof this Agreement, and prior to the time earlier of (x) the designees termination of this Agreement in accordance with Article VIII and (y) the Purchaser have been elected to, and shall constitute a majority of, the Board of Directors of the Company pursuant to Section 1.3 (the "Appointment Date"):Acceptance Time:
(a) the business of the Company and its Subsidiaries shall be conducted only in the ordinary course of business consistent with past practice, and usual course and, to the extent consistent therewith, each of the Company and its Subsidiaries shall use its commercially reasonable best efforts to preserve its present business organization intact intact, to keep available the services of its current officers, key employees and key consultants, and to maintain its existing goodwill and relations with customers, suppliers, employees, creditors contractors, distributors and others having significant business partnersdealings with it;
(b) the Company will shall not, (i) directly or indirectly, (i) except for the issuance of Shares upon the exercise of the Options outstanding on the date of this Agreement pursuant to the terms of such Options or upon the satisfaction of the conditions set forth in any Restricted Stock Unit, issue, sell, transfer or pledge or agree to sellmodify, transfer transfer, dispose of, encumber or pledge any shares of the Shares, Preferred Stock or capital stock of the Company, securities convertible into or exchangeable for, or options, warrants or rights of any kind to acquire any shares of its Subsidiaries beneficially owned by itsuch capital stock or other equity interests or any other ownership interest; (ii) amend or otherwise change its Articles Certificate of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine combine, reclassify, subdivide or reclassify the outstanding Shares redeem, or Preferred Stock purchase or any outstanding capital stock of any of the Subsidiaries of the Company;
(c) neither the Company nor otherwise acquire, directly or indirectly, any of its Subsidiaries shall: capital stock or other equity interests; or (iiv) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire any shares of, capital stock of any class of the Company or its Subsidiaries, other than shares reserved for issuance on the date hereof pursuant to the exercise of Options outstanding on the date hereof; (iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any material assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any material indebtedness or other liability; or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock;
(dc) neither the Company nor any of its Subsidiaries shall: (i) grant any increase in the compensation payable or to become payable by the Company or any of its Subsidiaries to any of its employees; (ii) (A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under any existing, bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company or any its Subsidiaries;
(e) neither the Company nor any of its Subsidiaries shall modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims thereunder;
(f) neither the Company nor any of its Subsidiaries shall permit any material insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to Parent;
(g) neither the Company nor any of its Subsidiaries shall: will not (i) incur or assume any long-term indebtedness for borrowed money or issue any debt or any short-term indebtednesssecurities in respect of borrowed money; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person, except in the ordinary course of business and consistent with past practicePerson; (iii) make any loans, advances or capital contributions to, or investments in, any other person Person; (iv) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or any equity interest therein; (v) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any of its assets or properties, in each case other than in the ordinary course of business consistent with past practice or sales or dispositions of assets of less than $1,000,000 in the aggregate;
(d) the Company shall not except in order to wholly owned Subsidiaries conform to the applicable provisions of Section 409A of the Code and related authority, (i) change the compensation or benefits payable or to become payable to any of its officers or directors, or in any material respect its employees, agents or consultants, except as required pursuant to applicable Law or Contracts in effect on the date of this Agreement and listed in Section 5.1(d) of the Company Disclosure Schedule and except as provided in the agreements set forth on Exhibit C; (ii) enter into, extend or customary amend any employment, collective bargaining, severance, consulting, termination or other agreement or employee benefit plan; or (iii) make any loans or advances to any of its officers, directors, employees, agents, consultants or affiliates or change its existing borrowing or lending arrangements for or on behalf of any of such persons pursuant to an employee benefit plan or otherwise; provided, however, that nothing in this Section 5.1(d) shall prevent the Company or its Subsidiaries from hiring new employees as non-officers or non-directors of the Company in accordance the ordinary course of business consistent with past practice so long as the amount of salaries, wages, bonuses and benefits provided to such new employees shall be in the ordinary course of business consistent with past practice with respect to similarly situated employees, and in any event not in excess of $150,000 per employee;
(e) the Company shall not (i) pay or arrange for payment of any pension, retirement allowance or other employee benefit pursuant to any existing plan, agreement or arrangement to any officer, director, employee or affiliate or pay or make any arrangement for payment to any officers, directors, employees or affiliates of the Company of any amount relating to unused vacation days, except payments and accruals made in the ordinary course of business consistent with past practice); (ii) except as may be required pursuant to the terms of a Benefit Plan as in effect as of the date of this Agreement, adopt or pay, grant, issue, accelerate or accrue salary or other payments or benefits pursuant to any pension, profit-sharing, bonus, extra compensation, incentive, deferred compensation, stock purchase, stock option, stock appreciation right, group insurance, severance pay, retirement or other employee benefit plan, agreement or arrangement, or any employment or consulting agreement with or for the benefit of any director, officer or employee, whether past or present, or (iii) amend in any material respect any such existing plan, agreement or arrangement;
(f) except as provided by (d) above, the Company will not (i) modify, extend, amend or terminate any Material Contract to which the Company is a party or by which the Company or any of its properties or assets may be bound; (ii) waive, release or assign any rights or claims under any of such Material Contracts; or (iviii) enter into any material commitment Material Contract;
(g) the Company shall not, except as necessary in the ordinary course of business consistent with past practice, grant or transaction (includingacquire, but not limited agree to grant to or acquire from any Person, or dispose of or permit to lapse any rights to, any borrowingIntellectual Property, capital expenditure or purchasedisclose or agree to disclose to any Person, sale other than Representatives of Purchaser and Parent, any trade secret or lease of assets or real estate)other confidential information;
(h) neither the Company nor any of its Subsidiaries shall will not (i) change any of the accounting methods used by it unless except for such changes required by GAAPGAAP or applicable Law or (ii) make any Tax election or change any Tax election already made, adopt any Tax accounting method, change any Tax accounting method, enter into any closing agreement or settle any claim or assessment relating to Taxes or consent to any claim or assessment relating to Taxes or any waiver of the statute of limitations for any such claim or assessment;
(i) neither the Company nor any of its Subsidiaries shall will not pay, discharge or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations, in the ordinary course of business consistent with past practice, or of claims, liabilities or obligations reflected or reserved against in, or contemplated by, in the consolidated financial statements (or the notes thereto) Financial Statements of the Company and its consolidated Subsidiariesfor the period ended December 31, 2007 or incurred since December 31, 2007 in the ordinary course of business consistent with past practice;
(j) neither the Company nor will not (i) settle or commence any action, suit, claim, litigation or other proceeding involving an amount in excess of its Subsidiaries $100,000 or, in the aggregate, an amount in excess of $1,000,000 or (ii) enter into any consent decree, injunction or other similar restraint or form of equitable relief in settlement of any action, suit, claim, litigation or other proceeding;
(k) the Company will not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than the Merger);
(kl) neither the Company nor any of its Subsidiaries will take, not take or agree to commit to take, permit any action that would result in any of the conditions to the Merger set forth in Article VII or any of the conditions to the Offer set forth in subsection (e) of Annex I not being satisfied;
(m) the Company shall not make any representation or warranty of the Company contained herein, capital expenditures that are not included in the case Company’s capital expenditure budget for 2008 (a copy of any representation or warranty not qualified by materiality, materially inaccurate or, which has been made available to Parent) in the case excess of any other representation or warranty, inaccurate in any respect at, or as of any time prior to, the Effective Time$200,000; and
(ln) neither the Company nor any of its Subsidiaries will not enter into an any agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.
Appears in 1 contract
Interim Operations of the Company. The Company covenants Each Selling Shareholder (other than IFC and agrees thatNMP) shall use its reasonable efforts to cause the Company, from the date hereof to the Initial Closing Date, except (i) as expressly contemplated by provided in this Agreement, (ii) as set forth in Section 5.1 of the Company's Disclosure Schedule are Permitted Preparatory Actions or (iii) as may be mutually agreed in writing by Parent, after Purchaser and the date hereof, and prior to the time the designees of the Purchaser have been elected to, and shall constitute a majority of, the Board of Directors of the Company pursuant to Section 1.3 (the "Appointment Date"):Selling Shareholders:
(a) to conduct its business in the ordinary course and in accordance with all material applicable laws and regulations;
(i) so as to keep available the services of its current directors; and
(ii) so as to maintain relations with suppliers, creditors, business partners and others having business dealings with it so that the goodwill and ongoing business of the Company and its Subsidiaries shall be conducted only unimpaired at the Initial Closing Date; and other than in each case with a view to winding down its operations in accordance with the ordinary and usual course and, to the extent consistent therewith, each of the Company and its Subsidiaries shall use its commercially reasonable best efforts to preserve its business organization intact and maintain its existing relations with customers, suppliers, employees, creditors and business partnersPermitted Preparatory Actions;
(b) the Company will not, directly or indirectly, not to:
(i) sell, transfer or pledge or agree to sell, transfer or pledge any of the Shares, Preferred Stock or capital stock of any of its Subsidiaries beneficially owned by it; (ii) amend its Articles of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares or Preferred Stock or any outstanding capital stock of any of the Subsidiaries of the Company;
(c) neither the Company nor any of its Subsidiaries shall: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, transfer, pledge, dispose of or encumber any additional shares ofof any class or series of its capital stock, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire acquire, any shares of, capital stock of any class or series of its capital stock or any Voting Debt;
(iii) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to any shares of any class or series of its capital stock;
(iv) split, combine or reclassify any shares of any class or series of its capital stock;
(v) redeem, purchase or otherwise acquire, directly or indirectly, any shares of any class or series of its capital stock, or any instrument or security which consists of or includes a right to acquire such shares; or
(vi) make any loan to or enter into any transaction with any Selling Shareholder or Person related thereto except as contemplated specifically by this Agreement.
(c) not to organize any new Subsidiary or acquire any capital stock or other equity securities, or equity or ownership interest in the Company business, of any other Person;
(d) not to modify, amend or terminate any of its SubsidiariesMaterial Agreements or waive, release or assign any material rights or claims, except in the ordinary course of business and with a view to winding down its operations in accordance with the Permitted Preparatory Actions;
(e) not to:
(i) incur or assume any indebtedness except in the ordinary course of business;
(ii) subject to Section 7.9, pay, repay, discharge, purchase, repurchase or satisfy any indebtedness issued or guaranteed by the Company, except as required by the terms thereof;
(iii) modify the terms of any indebtedness or other liability, other than shares reserved for issuance on the date hereof pursuant to the exercise modifications of Options outstanding on the date hereof; (iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any material assets other than short term debt in the ordinary and usual course of business and consistent with past practice, or incur or modify any material indebtedness or other liability; or or
(iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock;
(d) neither the Company nor any of its Subsidiaries shall: (i) grant any increase in the compensation payable or to become payable by the Company or any of its Subsidiaries to any of its employees; (ii) (A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under any existing, bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company or any its Subsidiaries;
(e) neither the Company nor any of its Subsidiaries shall modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims thereunder;
(f) neither the Company nor any of its Subsidiaries shall permit any material insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to Parent;
(g) neither the Company nor any of its Subsidiaries shall: (i) incur or assume any long-term debt or any short-term indebtedness; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other personPerson;
(f) not to sell, lease, license, hypothecate, mortgage, pledge, transfer or otherwise encumber or dispose of any assets or property, individually or in the aggregate, material to its business, other than in the ordinary course of business and with a view to winding down its operations in accordance with the Permitted Preparatory Actions;
(g) except as contemplated by Section 7.5 hereof, not to make any change in the compensation payable or to become payable to any of its directors, commissioners, employees, agents or consultants or to Persons providing management services, or enter into or amend any employment, severance, consulting, termination or other agreement with, or employee benefit plan for, or make any loan or advance to, any of its directors, commissioners, employees, agents or consultants or make any change in its existing borrowing or lending arrangements for or on behalf of any of such Persons pursuant to an employee benefit plan or otherwise other than in each case with a view to winding down its operations in accordance with the Permitted Preparatory Actions;
(h) except as contemplated by Section 7.5 hereof, not to:
(i) pay or make any accrual or arrangement for payment of any pension, retirement allowance or other employee benefit pursuant to any existing plan, agreement or arrangement to any director, commissioner or employee, except to the extent it is unconditionally obligated to do so on the date hereof (except in respect of a change of law) and other than in each case with a view to winding down its operations in accordance with the Permitted Preparatory Actions;
(ii) adopt or pay, grant, issue, accelerate or accrue salary or other payments or benefits pursuant to any pension, profit-sharing, bonus, extra compensation, incentive, deferred compensation, stock purchase, stock option, stock appreciation right, group insurance, severance pay, retirement or other employee benefit plan, agreement or arrangement, or any employment or consulting agreement with or for the benefit of any director, employee, agent or consultant, whether past or present, except to the extent the Company is unconditionally obligated to do so on the date hereof (except in respect of a change of law) and other than in each case with a view to winding down its operations in accordance with the Permitted Preparatory Actions; or
(iii) amend in any material respect any such existing plan, agreement or arrangement in a manner inconsistent with the foregoing;
(i) not to enter into any agreement, contract or transaction or make any payment under any agreement, contract or transaction entered into on other than an arm's length basis, and other than in the ordinary course of business and consistent with past practice; (iii) make any loans, advances practice or capital contributions to, or investments in, any other person (other than to wholly owned Subsidiaries of the Company or customary loans or advances to employees in accordance with past practice); or (iv) enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate)the Permitted Preparatory Actions;
(hj) neither other than in each case with a view to winding down its operations in accordance with the Company nor any of its Subsidiaries shall change any of the accounting methods used by it unless required by GAAP;
(i) neither the Company nor any of its Subsidiaries shall Permitted Preparatory Actions not to pay, repurchase, discharge or satisfy any of its claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of:
(i) claims, liabilities or obligations in the ordinary course of any such business and consistent with past practice; or
(ii) claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements Financial Statements to the extent so reflected or reserved against; or
(or the notes theretoiii) payments in respect of the Company and its consolidated Subsidiaries;
(j) neither the Company nor any of its Subsidiaries will adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than the Merger)Existing IFC Loans;
(k) neither the Company nor not to:
(i) change any of its Subsidiaries will take, or agree to commit to take, any action that would the accounting methods used by it unless required by GAAP; or
(ii) make any representation election relating to Taxes, change any election relating to Taxes already made, adopt any accounting method relating to Taxes, change any accounting method relating to Taxes unless required by GAAP, enter into any closing agreement relating to Taxes, settle any claim or warranty assessment relating to Taxes or consent to any claim or assessment relating to Taxes or any waiver of the Company contained herein, in the case statute of limitations for any representation such claim or warranty not qualified by materiality, materially inaccurate or, in the case of any other representation or warranty, inaccurate in any respect at, or as of any time prior to, the Effective Time; andassessment;
(l) neither the Company nor any of its Subsidiaries will not to enter into an any agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do do, any of the foregoing; and
(m) to cause the delivery to Purchaser at the Initial Closing of letter(s) evidencing the resignation and removal of each of the members of the Board of Commissioners and Board of Directors of the Company nominated by such Selling Shareholder without claims for compensation. PROVIDED that each of IFC and NMP agrees for the benefit of Purchaser that it shall not vote in favour of any resolution which may be tabled which would, if passed, cause any of the above covenants to be contravened.
Appears in 1 contract
Interim Operations of the Company. The Company covenants and agrees that, except (i) with the prior written consent of the Parent, for the matters set forth on Schedule 5.1 and as expressly contemplated by this Agreement, (ii) as set forth in Section 5.1 of the Company's Disclosure Schedule or (iii) as agreed in writing by Parent, after the date hereofof this Agreement, and prior to the earlier of (x) the termination of this Agreement in accordance with Article VIII and (y) the time the designees of the Purchaser have been elected to, and shall Parent constitute a majority of, the Board of Directors of the Company pursuant to Section 1.3 (the "Appointment Date"):Board of Directors:
(a) the business of the Company and its Subsidiaries shall be conducted only in the ordinary course of business consistent with past practice, and usual course and, to the extent consistent therewith, each of the Company and its Subsidiaries shall use its commercially reasonable best efforts to preserve its present business organization intact intact, to keep available the services of its current officers, key employees and consultants, and to maintain its existing good relations with material customers, suppliers, employeescontractors, creditors distributors and others having material business partnersdealings with it;
(b) the Company will not, directly or indirectly, (i) sell, transfer or pledge or agree to sell, transfer or pledge any of the Shares, Preferred Stock or capital stock of any of its Subsidiaries beneficially owned by it; (ii) amend its Articles of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares or Preferred Stock or any outstanding capital stock of any of the Subsidiaries of the Company;
(c) neither the Company nor any of its Subsidiaries shall: , (i) directly or indirectly, except for the issuance of a maximum of 40,578 shares of Common Stock upon the exercise of the Options outstanding on the date of this Agreement pursuant to the terms of such Options, issue, sell, modify, transfer, dispose of, encumber or pledge any shares of capital stock of the Company or any capital stock or other equity interests of any of the Company’s Subsidiaries, securities convertible into or exchangeable for, or options, warrants or rights of any kind to acquire any shares of such capital stock or other equity interests or any other ownership interest; (ii) amend or otherwise change its Certificate of Incorporation or Bylaws or similar organizational documents; (iii) except for the purchase of shares of Common Stock in connection with matching contributions made in accordance with the Company’s 401(k) plans, split, combine, reclassify, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of its capital stock or other equity interests; or (iv) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire any shares of, capital stock of any class of the Company or its Subsidiaries, other than shares reserved for issuance on the date hereof pursuant to the exercise of Options outstanding on the date hereof; (iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any material assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any material indebtedness or other liability; or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock;
(dc) neither the Company nor any of its Subsidiaries shall: (i) grant any increase in the compensation payable or to become payable by the Company or any of its Subsidiaries to any of its employees; (ii) (A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under any existing, bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company or any its Subsidiaries;
(e) neither the Company nor any of its Subsidiaries shall modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims thereunder;
(f) neither the Company nor any of its Subsidiaries shall permit any material insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to Parent;
(g) neither the Company nor any of its Subsidiaries shall: will (i) incur or assume any long-term indebtedness or issue any debt or any short-term indebtednesssecurities; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person, except in the ordinary course of business and consistent with past practicePerson (but not including intracompany or intercompany transactions); (iii) make any loans, advances or capital contributions to, or investments in, any other person Person; (iv) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or any equity interest therein; or (v) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any of its assets or properties, other than in the ordinary course of business consistent with past practice (including any such transaction permitted under the debt instruments set forth in Section 3.14(b) of the Company Disclosure Schedule);
(d) neither the Company nor any of its Subsidiaries shall increase in any manner the compensation of any of its directors, officers, employees, consultants or advisors or enter into, establish, amend or terminate any employment, consulting, retention, change in control, collective bargaining, bonus or other incentive compensation, profit sharing, health or other welfare, stock option or other equity (or equity-based), pension, retirement, vacation, severance, deferred compensation or other compensation or benefit plan, policy, agreement, trust, fund or arrangement with, for or in respect of, any stockholder, director, officer, other employee, consultant or Affiliate or (ii) other than pursuant to a contract entered into prior to the date hereof, amend or otherwise modify benefits under any Company Plan, grant any awards under any Company Plan (including the grant of stock options, stock appreciation rights, stock-based or stock-related awards, performance units, restricted stock units or restricted stock, or the removal of existing restrictions in any Contract or Company Plan or awards made thereunder), accelerate the payment or vesting of benefits or amounts payable or to become payable under any Company Plan as in effect on the date hereof, excluding such acceleration as a result of the transactions contemplated hereby, or terminate or establish any Company Plan, other than, in the case of clause (i) or (ii), (x) as required pursuant to applicable Law or the terms of the agreements set forth in Section 3.12(a) of the Company Disclosure Schedule (correct and complete copies of which have been made available to Parent) and (y) increases in salaries and wages of employees (other than officers) made in the ordinary course of business and in amounts and in a manner consistent with past practice;
(e) neither the Company nor any of its Subsidiaries will (i) modify, extend, amend or terminate any Material Contract to wholly owned Subsidiaries of which the Company or customary loans any of its Subsidiaries is a party or advances to employees by which the Company or any of its Subsidiaries or any of their respective properties or assets may be bound other than in accordance the ordinary course of business consistent with past practice); (ii) waive, release or assign any rights or claims under any of such Contracts; or (iviii) enter into any material commitment contract that would constitute a Material Contract if in effect on the date hereof other than in the ordinary course of business consistent with past practice;
(f) neither the Company nor any of its Subsidiaries will authorize any capital expenditure in excess of $500,000 individually or transaction $2,000,000 in the aggregate;
(includingg) neither the Company nor any of its Subsidiaries shall, but not limited except as necessary in the ordinary course of business consistent with past practice, grant or acquire, agree to grant to or acquire from any Person, or dispose of or permit to lapse any rights to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate)Intellectual Property;
(h) neither the Company nor any of its Subsidiaries shall will (i) change any of the accounting methods methods, principles or practices used by it unless except for such changes required by GAAPGAAP or applicable Law or (ii) make any material Tax election or change or revoke any Tax election already made, file any material amendment to a material Tax Return, adopt any Tax accounting method, change any Tax accounting method, principle or practice, enter into any closing agreement, settle or compromise any material claim or assessment relating to Taxes or consent to any claim or assessment relating to Taxes or any waiver of the statute of limitations for any such claim or assessment, agree to any extension of time with respect to an assessment or deficiency for a material amount of Taxes, surrender any right to claim a refund in a material amount for Taxes, or obtain any Tax ruling;
(i) neither the Company nor any of its Subsidiaries shall will pay, discharge or satisfy any material claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations, in the ordinary course of business consistent with past practice, or of claims, liabilities or obligations reflected or reserved against in, or contemplated by, in the consolidated financial statements (or the notes thereto) Financial Statements of the Company and its consolidated Subsidiariesfor the period ended December 31, 2007 or incurred since December 31, 2007 in the ordinary course of business consistent with past practice;
(j) neither the Company nor any of its Subsidiaries will (i) settle any action, suit, claim, litigation or other proceeding involving an amount in excess of $500,000 or, in the aggregate, an amount in excess of $2,000,000;
(k) neither the Company nor any of its Subsidiaries will adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than the Merger);
(kl) neither the Company nor any of its Subsidiaries will take, take or agree to commit to take, permit any action that would make reasonably be expected to result in any representation of the conditions to the Merger set forth in Article VII or warranty any of the conditions to the Offer set forth in Annex I not being satisfied or that could delay the consummation of, or impair the ability of the Company contained hereinto consummate, the Transactions in accordance with the case terms of this Agreement;
(m) neither the Company nor any of its Subsidiaries shall enter into, amend, modify or supplement any agreement, transaction, commitment or arrangement with any officer or director (or any affiliate of any representation of the foregoing);
(n) no Subsidiary of the Company that is a member or warranty not qualified by materialitymanager of a Joint Venture will authorize, materially inaccurate orapprove, recommend or propose any of the foregoing in the case of any other representation its capacity as such a member or warranty, inaccurate in any respect at, or as of any time prior to, the Effective Timemanager; and
(lo) neither the Company nor any of its Subsidiaries will enter into an any agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.
Appears in 1 contract
Samples: Merger Agreement (Esmark INC)
Interim Operations of the Company. The Company covenants and agrees that, except (i) as expressly contemplated by provided in this Agreement, (ii) as set forth in Section 5.1 with the prior written consent of the Company's Disclosure Schedule Parent, which consent shall not be unreasonably withheld, or (iii) as agreed in writing by Parent, after the date hereof, and prior to the time the designees of the Purchaser have been elected to, and shall constitute a majority of, the Board of Directors set forth on Section 5.1 of the Company pursuant to Section 1.3 (Disclosure Schedule, from the "Appointment Date"):date hereof until the Effective Time:
(a) the business of the Company and its Subsidiaries shall be conducted only in the ordinary course of business consistent with past practice and usual course and, to the extent consistent therewith, each of the Company and its Subsidiaries shall use its commercially reasonable best efforts to preserve its business organization intact and maintain its existing relations with material customers, suppliers, employees, creditors officers, creditors, business partners and others having business partnersdealings with the Company and its Subsidiaries;
(b) the Company will shall not, directly or indirectly, (i) sell, transfer or pledge or agree to sell, transfer or pledge any of the Shares, Preferred Stock or capital stock of any of its Subsidiaries beneficially owned by it; (ii) amend its Articles of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares or Preferred Stock Company Common Stock, or any outstanding capital stock of any of the Subsidiaries of the Company;
(c) neither the Company nor any of its Subsidiaries shall: (i) amend or propose to amend its articles of incorporation or by laws or similar organizational documents; (ii) declare, set aside or pay any dividend or make any other distribution payable in cash, stock or property with respect to its capital stockstock other than dividends paid by the Company’s wholly-owned Subsidiaries to the Company or its wholly-owned Subsidiaries; (iiiii) issue, sell, transfer, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire acquire, any shares of, of capital stock of any class of the Company or its Subsidiaries, other than shares reserved for issuance on the date hereof issuances pursuant to the exercise exercises of Company Stock Options outstanding on the date hereofor Company Warrants; (iiiiv) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any material assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any material indebtedness or other liabilityassets; or (ivv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock; or (vi) adopt or implement a shareholder rights plan;
(d) neither the Company nor any of its Subsidiaries shall: (i) grant any increase in or accelerate the compensation (whether annual base salary or wages or bonus opportunities or amounts) payable or to become payable by the Company or any of its Subsidiaries to any of its employeesBusiness Employee; (ii) (A) except to the extent currently required under applicable Law or the terms of the applicable Benefit Plan, adopt or enter into any new, or (B) amend or otherwise increaseincrease or terminate, or accelerate the payment or vesting of the amounts payable or to become payable under any existing, bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan plan, agreement or arrangement; or (iii) enter into hire any new officers, executives or employees or terminate the employment of any officers, executives or severance agreement with oremployees (except for cause), except in accordance with the existing written policies of the Companyor promote any officers, grant any severance executives or termination pay to any officer, director or employee of the Company or any its Subsidiariesemployees;
(e) neither the Company nor any of its Subsidiaries shall modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims thereunder;
(f) neither the Company nor any of its Subsidiaries shall permit any material insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to Parentterminated, or enter into or renew any insurance policies;
(gf) neither the Company nor any of its Subsidiaries shall: (i) incur or assume any long-term debt or any short-term indebtednessdebt, except pursuant to letters of credit and other Indebtedness set forth in Section 3.2(c) of the Company Disclosure Schedule; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any Person (other person, except in than the ordinary course Company or one of business and consistent with past practiceits wholly-owned Subsidiaries); (iii) make any loans, advances or capital contributions to, or investments in, any other person Person (other than to wholly wholly-owned Subsidiaries of the Company or customary loans or advances to non-officer employees in accordance with past practice); or (iv) enter into make any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease commitment therefor in excess of assets or real estate)$5,000;
(hg) neither the Company nor any of its Subsidiaries shall change any of the accounting methods methods, policies, procedures, practices or principles used by it unless required by GAAP, or change its fiscal year;
(i) neither the Company nor any of its Subsidiaries shall pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company and its consolidated Subsidiaries;
(jh) neither the Company nor any of its Subsidiaries will adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other material reorganization of the Company or any of its Subsidiaries other than the Merger and other than as permitted by Section 5.5 and Section 5.6;
(i) neither the Company nor any of its Subsidiaries shall merge or consolidate with any other Person (other than as permitted by Section 5.5 and Section 5.6) or acquire assets or capital stock of any Person;
(j) neither the Merger)Company nor any of its Subsidiaries will engage in any transaction with, or enter into any agreement, arrangement, or understanding with, directly or indirectly, any of the Company’s affiliates, including any transactions, agreements, arrangements or understandings with any affiliate or other Person covered under Item 404 of Regulation S K under the Securities Act that would be required to be disclosed under such Item 404 other than such transactions of the same general nature, scope and magnitude as are disclosed in the Company SEC Documents;
(k) neither the Company nor any of its Subsidiaries will takeshall enter into any joint venture, partnership or agree to commit to take, any action that would make any representation or warranty of the Company contained herein, in the case of any representation or warranty not qualified by materiality, materially inaccurate or, in the case of any other representation or warranty, inaccurate in any respect at, or as of any time prior to, the Effective Time; andsimilar arrangement;
(l) neither the Company nor any of its Subsidiaries will shall (i) enter into any Contract that if existing on the date hereof would be a Company Material Contract, other than Contracts with suppliers and customers in the ordinary course of business and consistent with past practice, (ii) terminate, amend, supplement or modify in any material respect any Company Material Contract to which the Company or any of its Subsidiaries is a party, (iii) waive, release, cancel, allow to lapse, convey, encumber or otherwise transfer any material rights or claims under any Company Material Contract, (iv) change incentive policies or payments under any Company Material Contracts existing on the date hereof or entered into after the date hereof, (v) enter into any Contract relating to the disposition of assets and/or capital stock except as permitted by Section 5.5 and except in the ordinary course of business consistent with past practice, or (vi) enter into any Contract with respect to real property, including any lease thereof, or renew any Real Property Lease;
(m) neither the Company nor any of its Subsidiaries shall (i) settle or compromise any material Action, whether administrative, civil or criminal, in law or in equity or any claim under any insurance policy for the benefit of the Company or any of its Subsidiaries or (ii) otherwise pay, discharge, settle or satisfy any claims, liabilities or obligations of any nature other than in the ordinary course of business consistent with past practice or in accordance with their terms;
(n) neither the Company nor any of its Subsidiaries shall waive or fail to enforce any provision of any confidentiality agreement or standstill or similar agreement to which it is a party;
(o) neither the Company nor any of its Subsidiaries shall make or change any elections with respect to Taxes, amend any Tax Returns, change any annual Tax accounting period, adopt or change any Tax accounting method, enter into any closing agreement, settle or compromise any proceeding with respect to any Tax claim or assessment, surrender any right to claim a refund of Taxes, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action relating to the filing of any Tax Return or the payment of any Tax;
(p) neither the Company nor any of its Subsidiaries shall enter into any material line of business other than the line of business in which the Company and its Subsidiaries is currently engaged as of the date of this Agreement;
(q) take any action to exempt or make not subject to or to otherwise waive or cause to be inapplicable (x) the provisions of 805 ICLS 5/7.85 or 805 ICLS 5/11.75 or (y) any other state takeover law or state law that purports to limit or restrict business combinations or the ability to acquire or vote shares, in each case to any individual or entity (other than Parent, Sub or their respective subsidiaries), or any action taken thereby, which individual, entity or action would have otherwise been subject to the restrictive provisions thereof and not exempt therefrom;
(r) neither the Company nor any of its Subsidiaries shall fail to take, or cause to be taken, all actions or fail to do, or cause to be done, all things necessary to maintain the registration of the Registered Intellectual Property, including paying all recordation, registration, maintenance and other fees, responding to all office action or other correspondence from the United States Patent and Trademark Office, United States Copyright Office, and all other corresponding governmental offices throughout the world, and paying all fees necessary to maintain any domain name registrations, and, consistent with past practice, to register and record all documents necessary to establish, maintain, transfer or identify the Intellectual Property;
(s) neither the Company nor any of its Subsidiaries shall amend, modify or change (in any material respect) any of their respective material policies or procedures, including policies and procedures governing the sale (or return) of products or services or the treatment of accounts receivable; and
(t) neither the Company nor any of its Subsidiaries shall enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing. The Company shall, and shall cause each of its Subsidiaries to, use commercially reasonable efforts to operate their respective businesses in a manner designed to preserve the current assets of the Company.
Appears in 1 contract
Interim Operations of the Company. The Company shall use its commercially reasonable efforts to procure that, and the Company covenants and agrees that, after the date hereof and prior to the Closing Date, except (i) as expressly contemplated by provided in this Agreement, (ii) as set forth in Section 5.1 of the Company's Disclosure Schedule or (iii) as may be agreed in writing by Parent, after the date hereof, and prior to the time the designees of the Purchaser have been elected to, and shall constitute a majority of, the Board of Directors of the Company pursuant to Section 1.3 (the "Appointment Date"):Viejas:
(a) the Company shall conduct its business of in the Company same manner as heretofore conducted and its Subsidiaries shall be conducted only in the ordinary course, and usual course and, to the extent consistent therewith, each of the Company and its Subsidiaries subsidiaries shall use its commercially reasonable best efforts to preserve its the business organization intact of the Company intact, keep available the services of the current officers and employees of the Company and maintain its the existing relations with franchisees, customers, suppliers, employeescreditors, creditors business partners and others having business partnersdealings with the Company;
(b) the Company will not, directly shall not amend or indirectly, (i) sell, transfer otherwise change its certificate of incorporation or pledge or agree to sell, transfer or pledge any of the Shares, Preferred Stock or capital stock of any of its Subsidiaries beneficially owned by it; (ii) amend its Articles of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares or Preferred Stock or any outstanding capital stock of any of the Subsidiaries of the Companybylaws;
(c) neither the Company nor any of its Subsidiaries shall: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) shall not issue, sell, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable forgrant, encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance (including in each case by way of share split, combination or reclassification) of any shares of its capital stock, or any options, warrants, calls, commitments convertible securities or other rights of any kind to acquire any shares ofof such capital stock, capital stock of or any class other ownership interest (including any phantom interest), of the Company or its SubsidiariesCompany, other than shares reserved for issuance on the date hereof except pursuant to the exercise terms of Options the options and the warrants outstanding on the date hereof; (iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any material assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any material indebtedness or other liability; or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stockthis Agreement;
(d) neither the Company nor shall not incur any indebtedness outside the ordinary course of its Subsidiaries shall: (i) grant business or issue any increase in the compensation payable debt securities or to become payable by the Company assume, guarantee or any of its Subsidiaries to any of its employees; (ii) (A) adopt any newendorse, or (B) amend or otherwise increaseas an accommodation become responsible for, the obligations of any person, or accelerate the payment make any loans or vesting of the amounts payable or to become payable under any existing, bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company or any its Subsidiariesadvances;
(e) neither the Company nor any of its Subsidiaries shall modifyfile, amend or terminate any of its material contracts or waiveon a timely basis, release or assign any material rights or claims thereunder;with appropriate taxing authorities all Tax Returns required to be filed prior to the Closing Date.
(f) neither the Company nor any of its Subsidiaries shall permit any material insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to Parent;
(g) neither the Company nor any of its Subsidiaries shall: (i) incur or assume any long-term debt or any short-term indebtedness; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person, except in the ordinary course of business and consistent with past practice; (iii) make any loans, advances or capital contributions to, or investments in, any other person (other than to wholly owned Subsidiaries of the Company or customary loans or advances to employees in accordance with past practice); or (iv) enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate);
(h) neither the Company nor any of its Subsidiaries shall change any of the accounting methods used by it unless required by GAAP;
(i) neither the Company nor any of its Subsidiaries shall pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company and its consolidated Subsidiaries;
(j) neither the Company nor any of its Subsidiaries will adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than the Merger);
(k) neither the Company nor any of its Subsidiaries will take, or agree to or commit to take, any action that would or is reasonably likely to result in any of the conditions to the Closing set forth in Sections 6 or 7 not being satisfied, or would make any representation or warranty of the Company contained herein, in the case of any representation or warranty not qualified by materiality, materially inaccurate or, in the case of any other representation or warranty, herein inaccurate in any respect at, or as of any time prior to, the Effective TimeClosing Date, or that would materially impair the ability of the Company or Viejas to consummate the Closing in accordance with the terms hereof or materially delay such consummation; and
(lg) neither the Company nor any of its Subsidiaries will Purchaser shall not enter into an any agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do do, any of the foregoing.
Appears in 1 contract
Interim Operations of the Company. The Company covenants and agrees that, after the date hereof and prior to the Closing Date, except (i) as expressly contemplated by provided in this Agreement, (ii) as set forth in Section 5.1 of the Company's Disclosure Schedule Schedule, or (iii) as may be agreed in writing by Parent, after the date hereof, and prior to the time the designees of the Purchaser have been elected to, and shall constitute a majority of, the Board of Directors of the Company pursuant to Section 1.3 (the "Appointment Date"):Purchaser:
(a) the business of the Company and its the Company Subsidiaries shall be conducted in the same manner as heretofore conducted and only in the ordinary course, and usual course and, to the extent consistent therewith, each of the Company and its Subsidiaries shall use its commercially reasonable best efforts to preserve its the business organization intact of the Company and each Company Subsidiary intact, keep available the services of the current officers and employees of the Company and the Company Subsidiaries and maintain its the existing relations with franchisees, customers, suppliers, employeescreditors, creditors business partners and others having business partnersdealings with the Company or the Company Subsidiaries, to the end that the goodwill and ongoing business of the Company and the Company Subsidiaries shall be unimpaired at the Closing Date. Neither the Company nor any Company Subsidiary shall institute any new methods of manufacture, purchase, sale, lease, management, accounting or operation or engage in any transaction or activity other than minor changes in the ordinary course of business and consistent with past practice;
(b) the Company will not, directly or indirectly, (i) sell, transfer or pledge or agree to sell, transfer or pledge any of the Shares, Preferred Stock or capital stock of any of its Subsidiaries beneficially owned by it; (ii) amend its Articles of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares or Preferred Stock or any outstanding capital stock of any of the Subsidiaries of the Company;
(c) neither the Company nor any of its Subsidiaries Company Subsidiary shall: (i) declareamend its certificate of incorporation or by-laws or similar organizational documents, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, transfer, pledge, dispose of or encumber any additional shares ofof any class or series of its capital stock or Voting Debt, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire acquire, any shares of, capital stock of any class or series of the Company its capital stock or its Subsidiariesany Voting Debt, other than shares Shares reserved for issuance on the date hereof pursuant to the exercise of Company Options outstanding on the date hereof; hereof or under the Company's Employee Share Purchase Plan, (iii) transferdeclare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to any shares of any class or series of its capital stock; (iv) split, combine or reclassify any shares of any class or series of its stock; or (v) redeem, purchase or otherwise acquire directly or indirectly any shares of any class or series of its capital stock, or any instrument or security which consists of or includes a right to acquire such shares;
(c) neither the Company nor any Company Subsidiary shall lease, license, sell, mortgage, pledge, dispose of, pledge or encumber any material assets other than in the ordinary and usual course of business and consistent with the past practice or transfer, sell or dispose of any assets other than in the ordinary and usual course of business and consistent with past practice, practice or incur dispose of or modify permit to lapse any material indebtedness or other liability; or (iv) redeem, purchase or otherwise acquire directly or indirectly rights to any of its capital stockIntellectual Property;
(d) neither the Company nor any of its Subsidiaries shall: (i) grant any increase in the compensation payable or to become payable by the Company or any of its Subsidiaries to any of its employees; (ii) (A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under any existing, bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company or any its Subsidiaries;
(e) neither the Company nor any of its Subsidiaries shall modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims thereunder;
(f) neither the Company nor any of its Subsidiaries shall permit any material insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to Parent;
(g) neither the Company nor any of its Subsidiaries shall: (i) incur or assume any long-term debt or any short-term indebtedness; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person, except in the ordinary course of business and consistent with past practice; (iii) make any loans, advances or capital contributions to, or investments in, any other person (other than to wholly owned Subsidiaries of the Company or customary loans or advances to employees in accordance with past practice); or (iv) enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate);
(h) neither the Company nor any of its Subsidiaries shall change any of the accounting methods used by it unless required by GAAP;
(i) neither the Company nor any of its Subsidiaries shall pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company and its consolidated Subsidiaries;
(j) neither the Company nor any of its Subsidiaries will adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than the Merger)Company Subsidiary;
(ke) neither the Company nor any of its the Company Subsidiaries will shall take, or agree to or commit to take, any action that would or is reasonably likely to result in any of the conditions to the Closing set forth in Article VI not being satisfied, or would make any representation or warranty of the Company contained herein, in the case of any representation or warranty not qualified by materiality, materially inaccurate or, in the case of any other representation or warranty, herein inaccurate in any material respect at, or as of any time prior to, the Effective TimeClosing Date, or that would materially impair the ability of the Company, Purchaser or the holders of Common Shares to consummate the Closing in accordance with the terms hereof or materially delay such consummation; and
(lf) neither the Company nor any of its the Company Subsidiaries will shall enter into an any agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do do, any of the foregoing.
Appears in 1 contract
Interim Operations of the Company. The Company covenants and agrees thatDuring the period from the date hereof to the earlier of the date of termination of this Agreement pursuant to Section 10.1 or the Closing Date, except (i) as expressly contemplated or permitted by this Agreement, as described in Schedule 6.1 or Section 6.12 or as consented to by Purchaser in writing (ii) as set forth such consent not to be unreasonably withheld, conditioned or delayed), the Company shall use commercially reasonable efforts to operate in Section 5.1 all material respects in the ordinary course of business consistent with past practice, and the Company shall not do any of the Company's Disclosure Schedule or (iii) as agreed in writing by Parent, after the date hereof, and prior to the time the designees of the Purchaser have been elected to, and shall constitute a majority of, the Board of Directors of the Company pursuant to Section 1.3 (the "Appointment Date"):following:
(a) the business of the Company and amend or modify its Subsidiaries shall be conducted only in the ordinary and usual course and, to the extent consistent therewith, each of the Company and its Subsidiaries shall use its commercially reasonable best efforts to preserve its business organization intact and maintain its existing relations with customers, suppliers, employees, creditors and business partnersOrganizational Documents or Operating Documents;
(b) the Company will not, directly or indirectly, (i) sell, transfer or pledge or agree to sell, transfer or pledge any of the Shares, Preferred Stock or capital stock of any of its Subsidiaries beneficially owned by it; (ii) amend its Articles of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares or Preferred Stock or any outstanding capital stock of any of the Subsidiaries of the Company;
(c) neither the Company nor any of its Subsidiaries shall: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, pledgetransfer, dispose of of, pledge or encumber any additional shares ofof its capital stock or other equity interests, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any of its capital stock or other equity interests;
(c) redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or other equity interests, or any instrument or security which consists of or includes a right to acquire such capital stock or other equity interest or declare, set aside, pay or make any distributions or payment to its stockholders with respect to any shares of, of its capital stock or other equity interests or make any payments with respect to any stock appreciation rights, phantom stock plans or similar arrangements (other than cash dividends or distributions, dividends or transfers of Retained Assets made prior to the Closing);
(d) incur, assume, endorse, or otherwise become liable for any Indebtedness, modify in any material respect the terms of any class Indebtedness (other than modifications of short-term debt in the Company ordinary course of business consistent with past practice), or assume or guarantee the obligations of any other Person, except in the ordinary course of business;
(e) create any Encumbrance (other than a Permitted Encumbrance) on any of its Subsidiariesassets that materially detracts from the value of such asset;
(f) make any change in the compensation or benefits payable to any of its directors, officers or employees, other than shares reserved for issuance on the date hereof pursuant to the exercise of Options outstanding on the date hereof; (iiii) transfernormal recurring salary increases or bonuses, lease, license, sell, mortgage, pledge, dispose of, or encumber any material assets other than in each case made in the ordinary and usual course of business and consistent with past practice, or incur or modify (ii) pursuant to the terms of any material indebtedness or other liability; or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stockBenefit Plan;
(dg) neither enter into, adopt or amend or make any commitment to enter into, adopt or amend any Benefit Plan;
(h) hire employees or retain consultants other than in the Company nor any ordinary course of its Subsidiaries shall: business consistent with past practice;
(i) grant terminate any increase employee or otherwise cause any employee to resign, in each case other than (i) in the compensation payable ordinary course of business consistent with past practice, or to become payable by the Company or any of its Subsidiaries to any of its employees; (ii) for cause or poor performance (A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under any existing, bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in either case which is documented in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company or any its Subsidiaries’s past practices);
(ej) neither the Company nor any of its Subsidiaries shall modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims thereunder;
(f) neither the Company nor any of its Subsidiaries shall voluntarily permit any material insurance policy naming it as a beneficiary or a loss payable payee to be cancelled canceled or terminated without giving notice to ParentPurchaser;
(gk) neither commence or settle any litigation or arbitration;
(l) sell, lease, license, assign, transfer or otherwise dispose of any properties or assets of the Company nor Company, including any of its Subsidiaries shall: (i) incur Intellectual Property or assume any long-term debt or any short-term indebtedness; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other personintangible assets, except in the ordinary course of business and consistent with past practice; (iii) make any loans, advances or capital contributions to, or investments in, any other person (other than to wholly owned Subsidiaries of the Company or customary loans or advances to employees in accordance with past practice); or (iv) enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate)practices;
(hm) neither the Company nor any of its Subsidiaries shall change any of the accounting methods used by it unless required by GAAP;
(i) neither the Company nor any of its Subsidiaries shall pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company and its consolidated Subsidiaries;
(j) neither the Company nor any of its Subsidiaries will adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization consolidation or other reorganization of the Company or any of its Subsidiaries (other than the Merger)reorganization;
(kn) neither the Company nor any of its Subsidiaries will take, or agree to commit to take, any action that would make any representation acquisition of all or warranty any significant part of the Company contained hereinassets, in the case of any representation properties, capital stock or warranty not qualified by materiality, materially inaccurate or, in the case business of any other representation Person, whether by merger, stock or warranty, inaccurate in any respect at, asset purchase or as of any time prior to, the Effective Time; andotherwise;
(lo) neither terminate or remove any officer or plan, announce, implement or effect any reduction in force, lay off, early retirement program or similar program applicable generally across the Company nor any of its Subsidiaries will Company’s employee base;
(p) enter into any Contract or other agreement with any labor union;
(q) make, change or revoke any material Tax election; settle or compromise any material Tax claim, notice, audit report or assessment; file an agreementamended material Tax Return; enter into any Tax allocation, contractsharing or indemnity agreement or closing agreement relating to any Tax; surrender any right to claim a material Tax refund; or consent to extend or waive the statute of limitations for any material Tax claim or assessment;
(r) make any change in its accounting, commitment auditing or arrangement tax reporting methods, principles or practices, except as required by changes in GAAP; or
(s) agree, authorize, resolve, arrange or commit to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoingthings described in subsections (a) through (r) above.
Appears in 1 contract
Interim Operations of the Company. The Company covenants and --------------------------------- agrees that, except (i) as expressly contemplated by this Agreement or the Stock Option Agreement, (ii) as set forth in Section 5.1 the ordinary course of the Company's Disclosure Schedule business consistent with past practice or (iii) as agreed in writing by Parent, after the date hereof, and prior to the earlier of (x) the termination of this Agreement in accordance with Article VIII and (y) the time the designees of the Purchaser Parent have been elected to, and shall constitute a majority of, the Company Board of Directors of the Company pursuant to Section 1.3 (the "Appointment Date"):): ----------------
(a) the business of the Company and its the Company Subsidiaries shall be conducted only in the ordinary course of business consistent with past practice, and usual course and, to the extent consistent therewith, each of the Company and its the Company Subsidiaries shall use its commercially reasonable best efforts to preserve its present business organization intact and maintain its existing satisfactory relations with customers, suppliers, employeesemployees (except as noted in severance agreements or stay bonuses), creditors contractors, distributors and others having business partnersdealings with it;
(b) the Company will shall not, directly or indirectly, (i) except upon exercise of the Options or other rights to purchase Shares pursuant to the Option Plans outstanding on the date hereof or granted in compliance with this Section 5.2, issue, sell, transfer or pledge or agree to sell, transfer or pledge any treasury stock of the Shares, Preferred Stock Company or any capital stock of any of its Subsidiaries Company Subsidiary beneficially owned by it; , (ii) amend its Articles Certificate of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares or Preferred Stock or any outstanding capital stock of any of the Subsidiaries of the Company;
(c) neither the Company nor any of its Subsidiaries Company Subsidiary shall: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire acquire, any shares of, of capital stock of any class of the Company or its any Company Subsidiaries, other than shares Shares reserved for issuance on the date hereof pursuant to the exercise of the Options outstanding on the date hereofhereof or as permitted under this Agreement; (iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any of its material assets other than in the ordinary and usual course of business and consistent with past practiceassets, or incur or modify any material indebtedness or other liability, other than in the ordinary course of business consistent with past practice; or (iv) redeem, purchase or otherwise acquire directly any shares of any class or indirectly any series of its capital stock, or any instrument or security which consists of or includes a right to acquire such shares except in connection with the exercise of repurchase rights or rights of first refusal in favor of the Company with respect to shares of Common Stock issued upon exercise of Options granted under the Option Plans;
(d) except as provided in Section 5.2(d) of the Company Disclosure Schedule, neither the Company nor any of its Subsidiaries shall: (i) grant Company Subsidiary shall make any increase change in the compensation or benefits payable or to become payable by the Company or any of its Subsidiaries to any of its officers, directors, employees; , agents or consultants (iiother than increases in wages to employees who are not directors or affiliates, in the ordinary course of business consistent with past practice) (A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under persons providing management services, enter into or amend any existing, bonus, incentive compensation, deferred compensationemployment, severance, profit sharingconsulting, stock option, stock purchase, insurance, pension, retirement termination or other agreement or employee benefit plan agreement or arrangement; or (iii) enter into make any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay loans to any officerof its officers, director directors, employees, affiliates, agents or consultants or make any change in its existing borrowing or lending arrangements for or on behalf of any of such persons pursuant to an employee of the Company benefit plan or any its Subsidiariesotherwise;
(e) neither the Company nor any Company Subsidiary shall pay or make any accrual or arrangement for payment of its Subsidiaries shall any pension, retirement allowance or other employee benefit pursuant to any existing plan, agreement or arrangement to any officer, director, employee or affiliate or pay or agree to pay or make any accrual or arrangement for payment to any officers, directors, employees or affiliates of the Company of any amount relating to unused vacation days, except payments and accruals made in the ordinary course of business consistent with past practice; adopt or pay, grant, issue, accelerate or accrue salary or other payments or benefits pursuant to any pension, profit-sharing, bonus, extra compensation, incentive, deferred compensation, stock purchase, stock option, stock appreciation right, group insurance, severance pay, retirement or other employee benefit plan, agreement or arrangement, or any employment or consulting agreement with or for the benefit of any Company director, officer, employee, agent or consultant, whether past or present, except pay benefits under a Benefit Plan in the ordinary course of business consistent with past practice, or amend in any material respect any such existing plan, agreement or arrangement in a manner inconsistent with the foregoing; nor, except as provided in Section 2.4(b) with respect to the ESPP, will the Company or any Company Subsidiary offer, grant or issue any stock options;
(f) the Company will not, in any material respect, modify, amend or terminate any of its material contracts or the Company Agreements, and neither the Company nor any Company Subsidiary shall waive, release or assign any material rights or on claims thereunderunder any of the Company Agreements;
(fg) neither the Company nor any of its Subsidiaries shall Company Subsidiary will permit any material insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to Parent;
(gh) except as permitted under Section 7.1 of that certain Loan and Security Agreement dated March 16, 2001 between the Company and Foothill Capital Corporation as in effect on the date hereof (the "Foothill Agreement," true and ------------------ complete copies of which have been provided to Parent and its counsel, as amended to the date hereof) neither the Company nor any of its Subsidiaries shall: Company Subsidiary will (i) incur or assume any long-term debt or any short-term indebtedness; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person, except in the ordinary course of business and consistent with past practicePerson; (iii) make any loans, advances or capital contributions to, or investments in, any other person (other than to wholly owned Subsidiaries of the Company or customary loans or advances to employees in accordance with past practice)Person; or (iv) enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate);
(h) neither . Notwithstanding the foregoing, the Company shall not, without the prior consent of Parent, make any investment within the meaning of clause (d) of the definition of "Permitted Investment" in the Foothill Agreement, nor shall it enter into any guarantees for the obligations of any of its Subsidiaries shall change any other than general guarantees, not to exceed one year, for the obligations of the accounting methods used by it unless its international subsidiaries that may required by GAAPas part of a statutory audit.;
(i) neither the Company nor any Company Subsidiary will (i) change any of the accounting methods used by it materially affecting its Subsidiaries shall assets, liabilities or business, except for such changes required by GAAP or (ii) make any Tax election or change any Tax election already made, adopt any Tax accounting method, change any Tax accounting method, enter into any closing agreement or settle any claim or assessment relating to Taxes or consent to any claim or assessment relating to Taxes or any waiver of the statute of limitations for any such claim or assessment;
(j) neither the Company nor any Company Subsidiary will pay, discharge or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations, in the ordinary course of business consistent with past practice, or of claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company and its consolidated SubsidiariesCompany;
(jk) neither the Company nor any of its Subsidiaries Company Subsidiary will adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries Company Subsidiary (other than the Merger);
(kl) neither the Company nor any of its Subsidiaries Company Subsidiary will take, or agree to commit in writing or otherwise to take, any action that would or is reasonably likely to result in any of the conditions to the Merger set forth in Article VII or any of the conditions to the Offer set forth in Annex I not being satisfied, or would make any many representation or warranty of the Company contained herein, in the case of any representation or warranty not qualified by materiality, materially inaccurate or, in the case of any other representation or warranty, herein inaccurate in any material respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation; and
(lm) neither the Company nor any of its Subsidiaries Company Subsidiary will enter into an any written agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose propose, in writing or announce an intention to do any of the foregoing.
Appears in 1 contract
Interim Operations of the Company. The Company covenants and agrees that, except (i) as expressly contemplated by this Agreement, (ii) as set forth in Section 5.1 of the Company's Disclosure Schedule or (iii) as agreed in writing by ParentMergerco, after the date hereof, and prior to the time the designees of the Purchaser have been elected to, and shall constitute a majority of, the Board of Directors of the Company pursuant to Section 1.3 (the "Appointment Date"):Effective Time:
(a) the business of the Company and its Subsidiaries shall be conducted only in the ordinary and usual course and, to the extent consistent therewith, each of the Company and its Subsidiaries shall use its commercially reasonable best efforts to preserve its business organization intact and maintain its existing relations with customers, material customers and suppliers, key employees, material creditors and business partnerspartners (including, without limitation, those party to the Material Agreements);
(b) the Company will not, directly or indirectly, (i) sell, transfer or pledge or agree to sell, transfer or pledge any of the Shares, Preferred Stock Stock, or capital stock of it or of any of its Subsidiaries beneficially owned by it; (ii) amend its Articles of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares or Preferred Stock Stock, or any outstanding capital stock of any of the Subsidiaries of the Company;
(c) neither the Company nor any of its Subsidiaries shall: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire any shares of, capital stock of any class of the Company or its Subsidiaries, other than shares reserved for issuance on the date hereof pursuant to the exercise of Options outstanding on the date hereof; (iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any material assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any material indebtedness or other liability; or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock;
(d) neither the Company nor any of its Subsidiaries shall: (i) grant any increase in the compensation payable or to become payable by the Company or any of its Subsidiaries to any of its executive officers or key employees; (ii) (A) adopt 33 27 any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under any existing, bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to to, any officer, director or employee of the Company or any its Subsidiaries;
(e) neither the Company nor any of its Subsidiaries shall modify, amend or terminate any of its material contracts Agreements or waive, release or assign any material rights or claims thereunder;
(f) neither the Company nor any of its Subsidiaries shall permit any material insurance policy naming it as a beneficiary or a loss payable payee to be cancelled canceled or terminated without notice to ParentMergerco, and the Company shall use its reasonable commercial best efforts to maintain all such policies;
(g) neither the Company nor any of its Subsidiaries shall: (i) incur or assume any long-term debt or any short-term indebtednessindebtedness other than normal borrowings under the Company's existing revolving credit facility; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person, except in the ordinary course of business and consistent with past practice; (iii) make any loans, advances or capital contributions to, or investments in, any other person (other than to wholly owned Subsidiaries of the Company or customary loans or expense advances to employees in accordance with past practice); or (iv) enter into any material commitment or transaction (including, but not limited to, any material borrowing, capital expenditure or purchase, sale or lease of assets or real estate);
(h) neither the Company nor any of its Subsidiaries shall change any of the accounting methods used by it unless required by GAAP;
(i) neither the Company nor any of its Subsidiaries shall pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company and its consolidated SubsidiariesSubsidiaries or those incurred in the ordinary course of business subsequent to the date of such financial statements;
(j) neither the Company nor any of its Subsidiaries will adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, 34 28 recapitalization or other reorganization of the Company or any of its Subsidiaries (other than the Merger);
(k) neither the Company nor any of its Subsidiaries will take, or agree to commit to take, any action that would make any representation or warranty of the Company contained herein, in the case of any representation or warranty not qualified by materiality, materially inaccurate or, in the case of any other representation or warranty, inaccurate in any respect at, or as of any time prior to, the Effective TimeTime in each case without regard to any knowledge qualification; and
(l) neither the Company nor any of its Subsidiaries will enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.
Appears in 1 contract
Interim Operations of the Company. The Company covenants and agrees ----------------------------------- that, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, except (i) as expressly contemplated by this Agreement, (ii) as set forth Agreement or the transaction described in Section 5.1 Schedule 6.1 or with the prior written consent of the Company's Disclosure Schedule Pulse or (iii) as agreed in writing by Parent, after the date hereof, and prior to the time the designees of the Purchaser have been elected to, and shall constitute a majority of, the Board of Directors of the Company pursuant to Section 1.3 (the "Appointment Date"):Acquisition Corp.:
(a) the The business of the Company and its Subsidiaries shall be conducted only in the ordinary and usual course andand substantially in accordance with past custom and practice and in material compliance with all applicable Regulations, to the extent consistent therewith, and each of the Company and its Subsidiaries shall use its commercially reasonable best efforts to preserve its business organization intact intact, keep available the services of its officers and employees, and maintain its goodwill and existing relations with customers, suppliers, employeeslandlords, creditors creditors, agents and other business partnersassociates;
(b) Except for an amendment to its Certificate of Determination and to its Articles of Incorporation to cure a prior overissue of Preferred Stock, a copy of which amendments will be submitted to the Acquisition Companies prior to filing for their review, the Company will not, directly or indirectly, shall not (i) sell, transfer amend its Articles or pledge Certificate of Incorporation or agree to sell, transfer By-Laws or pledge any of the Shares, Preferred Stock or capital stock those of any of its Subsidiaries beneficially owned by it(or equivalent charter documents); (ii) amend its Articles of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares or Preferred Stock or any outstanding shares of capital stock of any of the Subsidiaries of the Company;
(c) neither the Company nor or equity interest in any of its Subsidiaries shall: Subsidiary; or (iiii) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to the shares of capital stock of the Company or equity interests in any Subsidiary;
(c) Except for the exercise by the holders of outstanding Company Stock Options, Warrants or shares of Preferred Stock of their purchase or conversion rights with respect to the Company's Common Stock, neither the Company nor any of its capital stock; Subsidiaries shall (iii) authorize, issue, sell, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire acquire, any shares of, of capital stock of any class of the Company or its Subsidiariescapital stock or other equity interests in any Subsidiary, other than shares reserved except for issuance on the date hereof pursuant to the exercise of Options outstanding on the date hereof; (iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any material assets other than options issued in the ordinary and usual course of business pursuant to an existing plan previously provided to the Acquisition Companies to employees, directors and consistent with past practiceconsultants for services rendered or to be rendered to the Company or any Subsidiary, or incur or modify any material indebtedness or other liabilityall of which options shall terminate at the Effective Time; or (ivii) redeem, purchase or otherwise acquire directly or indirectly by redemption or otherwise any shares of its the capital stockstock of the Company or any Subsidiary, except from former employees, directors and consultants pursuant to agreements providing for the repurchase of shares in connection with any termination of service in accordance with the terms of such agreements and all applicable Regulations (including, without limitation, state and federal securities laws); or (iii) acquire or make any material investment, whether by purchase of stock or assets, merger or consolidation, contributions to capital, property transfers or otherwise, in any other entity;
(d) neither the Company nor any of its Subsidiaries shall: (i) grant any increase in the compensation payable or to become payable by the Company or any of its Subsidiaries to any of its employees; (ii) (A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under any existing, bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company or any its Subsidiaries;
(e) neither Neither the Company nor any of its Subsidiaries shall modify(i) establish, adopt, enter into or amend any Employee Plan, except for any amendments that are required by applicable Regulations, (ii) grant any general or terminate uniform increase in the rates of pay (including without limitation, any severance pay), or benefits to officers, directors or employees (or a class thereof), or (iii) other than in the ordinary course of its material contracts business consistent with past practice, grant any increase in the compensation (including without limitation, severance pay) or waivebenefits of any director, release officer or assign any material rights or claims thereunderemployee;
(fe) neither Neither the Company nor any of its Subsidiaries shall permit any material insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to Parent;
sell (g) neither the Company nor any other than sales of its Subsidiaries shall: (i) incur or assume any long-term debt or any short-term indebtedness; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person, except Inventory in the ordinary course of business and consistent with past practice; (iii) make any loansbusiness), advances or capital contributions tolease, or investments in, otherwise dispose of any other person (other than to wholly owned Subsidiaries material Asset or property of the Company or customary loans any Subsidiary or advances mortgage, pledge, or impose an Encumbrance on any Asset or property of the Company or any Subsidiary, including the sale, lease, lapse of rights in or other disposition of any of the Intellectual Property used in the conduct of the Business. Notwithstanding the foregoing, however, the Company intends to employees distribute the Concept (as defined in accordance Schedule 6.1) and certain related assets on or prior to the Effective Time in connection with past practicethe Merger, as described in Schedule 6.1. The parties agree that this distribution shall be based on an agreed value of $14,300 and shall be made pro rata to the Shareholders; provided, however this provision does not in any way negate the representation and warranty made by the Company in Section 5.2(t)(vi) of this Agreement. The Company has advised the Acquisition Companies that the distribution is in redemption of a portion of the Shares (such portion to be determined by dividing such value by the sum of such value and the amount of the Purchase Price); or (iv) enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate);.
(hf) neither Neither the Company nor any of its Subsidiaries shall change cancel or waive any claims or rights with a value to the Company or any Subsidiary in excess of the accounting methods used by it unless required by GAAP$75,000;
(ig) neither Neither the Company nor any of its Subsidiaries shall paymake any change in the accounting methods used by the Company or any Subsidiary, except for changes required or mandated by GAAP;
(h) Neither the Company nor any of its Subsidiaries shall make any capital expenditure or commitment for additional property, plant or equipment of the Company or any Subsidiary which exceeds $75,000;
(i) Neither the Company nor any of its Subsidiaries shall make any payment, discharge or satisfy satisfaction of any claims, liabilities liability or obligations obligation (absolute, whether accrued, asserted or unassertedabsolute, contingent or otherwise)) in excess of $75,000, other than the payment, discharge or satisfaction satisfaction, in the ordinary course of any such claimsbusiness, of liabilities or obligations reflected or reserved against in, or contemplated by, incurred in the consolidated financial statements (or the notes thereto) ordinary course of the Company and its consolidated Subsidiariesbusiness;
(j) neither Neither the Company nor any Subsidiary shall make or change any material election in respect of Taxes, adopt or change any accounting method in respect of Taxes, enter into any closing agreement, settle any claim or assessment in respect of Taxes (except settlements effected solely through payment of immaterial sums of money), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes; and
(k) Neither the Company nor any of its Subsidiaries will adopt a plan of complete shall authorize or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than the Merger);
(k) neither the Company nor any of its Subsidiaries will take, or agree to commit to take, any action that would make any representation or warranty of the Company contained herein, in the case of any representation or warranty not qualified by materiality, materially inaccurate or, in the case of any other representation or warranty, inaccurate in any respect at, or as of any time prior to, the Effective Time; and
(l) neither the Company nor any of its Subsidiaries will enter into an agreement, contract, commitment or arrangement agreement to do any of the foregoing, foregoing in subsections (b)-(j) or to authorize, recommend, propose or announce an intention to do breach any of the foregoing.covenants in subsection (a) of this Section 6.1. Notwithstanding anything to the contrary set forth elsewhere in this Agreement, the Company may not modify, supplement or amend Schedule 6.1 following the execution of this Merger Agreement without the prior written consent of the Acquisition Companies, which consent shall not be unreasonably withheld or delayed
Appears in 1 contract
Samples: Merger Agreement (Technitrol Inc)
Interim Operations of the Company. The Company covenants and agrees that, except (i) Except as expressly contemplated by provided in this Agreement, (ii) Agreement and except as set forth in Section 5.1 of the Company's Disclosure Schedule or (iii) and except as agreed may be consented to in writing by ParentPurchaser (such consent not to be unreasonably withheld, conditioned or delayed) the Company shall assure that, after the date hereof, hereof and prior to the time the designees of the Purchaser have been elected to, and shall constitute a majority of, the Board of Directors of the Company pursuant to Section 1.3 (the "Appointment Closing Date")::
(a) the The business of the Company and its the Company Subsidiaries shall be conducted in the same manner as heretofore conducted and only in the ordinary course, and usual course andthe Company shall, to the extent consistent therewith, and shall cause each of the Company and its Subsidiaries shall use its to, make commercially reasonable best efforts consistent with past practices to (A) preserve the existing relationships of the Company and the Company Subsidiaries with their customers, suppliers and others with whom the Company and the Company Subsidiaries deal, (B) preserve intact its business organization intact organization, goodwill and ongoing operations, (C) retain the service of its key employees, (D) perform its obligations under the Contracts listed or required to be listed in Section 3.13 of the Disclosure Schedule, and (E) maintain its existing relations with customers, suppliers, employees, creditors material properties and business partnersassets;
(b) the Company will not, directly or indirectly, (i) sell, transfer or pledge or agree to sell, transfer or pledge any of the Shares, Preferred Stock or capital stock of any of its Subsidiaries beneficially owned by it; (ii) amend its Articles of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares or Preferred Stock or any outstanding capital stock of any of the Subsidiaries of the Company;
(c) neither Neither the Company nor any of its Subsidiaries Company Subsidiary shall: (i) declareamend its certificate of incorporation or bylaws or similar organizational documents, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, transfer, pledge, dispose of, encumber, grant or award any shares of any class or encumber any additional shares ofseries of its capital stock, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire acquire, any shares of, capital stock of any class or series of the Company or its Subsidiaries, other than shares reserved for issuance on the date hereof pursuant to capital stock (excluding issuances and sales of Shares upon the exercise of Options or conversion of Preferred Shares outstanding on as of the date hereof; ), (iii) transferdeclare, lease, license, sell, mortgage, pledge, dispose of, set aside or encumber pay any material assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any material indebtedness dividend or other liability; distribution payable in cash, stock or property with respect to any shares of any class or series of its capital stock, (iv) split, combine or reclassify any shares of any class or series of its stock, (v) redeem, purchase or otherwise acquire directly or indirectly any shares of any class or series of its capital stock, or any instrument or security which consists of or includes a right to acquire such shares other than repurchases from employees in connection with the termination of their employment pursuant to repurchase agreements in effect before the date hereof or (vi) make or authorize any capital expenditure other than in accordance with the 2005 Budget of the Company, a copy of which has been made available to Purchaser before the date hereof;
(c) Neither the Company nor any of the Company Subsidiaries shall: 24
(i) incur or assume any Indebtedness, except pursuant to the Credit Agreement,
(ii) materially modify or amend the terms of the Credit Agreement (other than in connection with the repayment or discharge thereof upon the Closing),
(iii) make any loans, advances or capital contributions to, or assume or guarantee the obligations of, any other Person, except in the ordinary course of business, or
(iv) acquire or agree to acquire by merging or consolidating with, or by purchasing a substantial portion of the assets of, or by any other manner, any Person;
(d) neither Neither the Company nor any of its Subsidiaries shall: Company Subsidiary shall (i) grant make any increase change in the compensation (including severance or termination pay) payable or to become payable by the Company or (including any of its Subsidiaries change that results in an acceleration thereof) to any of its employees, officers or directors (other than normal recurring salary increases in the ordinary course of business or required pursuant to any Plan existing on the date hereof); (ii) (A) adopt or establish any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under any existing, bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other new employee benefit plan agreement plan, program or arrangement; arrangement (including, but not limited to, severance or (iiitermination pay) or enter into any employment or severance agreement with or, except arrangement (other than an at-will arrangement involving amounts not in accordance with the existing written policies excess of the Company, grant $100,000 per year that does not provide for any type of severance or termination pay beyond that required by law) in each case involving amounts in excess of $50,000; (iii) amend or enter into any agreement with the PBGC; or (iv) award bonuses to any officerof its employees, director officers or employee directors other than to officers and employees in the ordinary course of the Company or any its Subsidiariesbusiness consistent with past practice;
(e) neither Neither the Company nor any of its Subsidiaries Company Subsidiary shall modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims thereunder;
(f) neither the Company nor any of its Subsidiaries shall voluntarily permit any material insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated prior to the Closing Date without notice to ParentPurchaser, except policies providing coverage for losses not in excess of $5,000,000 which are replaced without diminution of or gaps in coverage;
(gf) neither Neither the Company nor any of its Subsidiaries shall: (i) incur or assume any long-term debt or any short-term indebtedness; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person, except in the ordinary course of business and consistent with past practice; (iii) make any loans, advances or capital contributions to, or investments in, any other person (other than to wholly owned Subsidiaries of the Company or customary loans or advances to employees in accordance with past practice); or (iv) enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate);
(h) neither the Company nor any of its Subsidiaries shall change any of the accounting methods used by it unless required by GAAP;
(i) neither the Company nor any of its Subsidiaries shall pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company and its consolidated Subsidiaries;
(j) neither the Company nor any of its Subsidiaries will adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any Company Subsidiary;
(g) Neither the Company nor any Company Subsidiary shall change in any material respect any of the accounting methods used by it unless required or permitted by GAAP;
(h) Neither the Company nor any Company Subsidiary shall file any Tax Return or make any Tax election other than in a manner consistent with past practice or settle any Tax Audit with respect to a material amount of Taxes; 25
(i) Neither the Company nor any Company Subsidiary shall waive or cancel any valuable and material right, debt or claim of the Company or any Company Subsidiary with a value to the Company or such Company Subsidiary of greater than $100,000;
(j) Neither the Company nor any Company Subsidiary shall sell, assign, transfer, mortgage, lease, pledge or otherwise dispose of or encumber, any of its tangible or intangible assets or properties, except (i) in the ordinary course of business consistent with past practice and (ii) assets for which the book value does not exceed $250,000 and which are not, in the case of (i) or (ii), individually or in the aggregate, material to the conduct of the business of the Company and the Company Subsidiaries (other than the Merger)as presently conducted;
(k) Except as permitted under Section 5.1(d), neither the Company nor any Company Subsidiary shall make any loan to, or enter into, amend or modify any Contract with, any officer, director, consultant, employee or stockholder of its Subsidiaries will the Company or any Company Subsidiary, or any Affiliate of any such Person (other than advances to such officers, directors, consultants and employees in the ordinary course of business in connection with salary, wages, travel and travel related expenses or other customary expenses);
(l) Except in the ordinary course of business consistent with past practice, neither the Company nor any Company Subsidiary shall enter into any transaction or agreement that provides for aggregate future payments to or by the Company or any Company Subsidiary of more than $250,000 with respect to any particular transaction or agreement entered into by the Company or any Company Subsidiary after the date hereof (or except as expressly required by this Agreement, amend or terminate any Contract listed on Section 3.13 of the Disclosure Schedule;
(m) Neither the Company nor any Company Subsidiary shall take, or agree to or commit to take, any action that would make result in any representation or warranty of the Company contained herein, conditions to the Closing set forth in the case of any representation or warranty Article VI not qualified by materiality, materially inaccurate or, in the case of any other representation or warranty, inaccurate in any respect atbeing satisfied, or as that would materially impair the ability of any time prior toPurchaser, Sub or the Effective TimeCompany to consummate the Closing in accordance with the terms hereof or materially delay such consummation; and
(ln) neither Neither the Company nor any of its Subsidiaries will Company Subsidiary shall enter into an any agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoingthings described in Subsections (a) through (m) above.
Appears in 1 contract
Interim Operations of the Company. The Company covenants --------------------------------- and agrees that, except (i) as expressly contemplated by this Agreement, (ii) as set forth in Section 5.1 of the Company's Disclosure Schedule 5.1, or (iii) as agreed consented to in writing by ParentParent (such consent not to be unreasonably withheld), after the date hereof, and prior to the time the designees of the Purchaser have been elected to, and shall constitute a majority of, the Board of Directors of the Company pursuant to Section 1.3 (the "Appointment Date"):Effective Time:
(a) the business of the Company and each of its Subsidiaries shall be conducted only in the ordinary and usual course consistent with past practice and, to the extent consistent therewith, each of the Company and its Subsidiaries shall use its commercially reasonable best efforts to preserve its business organization substantially intact and maintain its existing relations with customers, suppliers, employees, creditors creditors, business partners and others having significant business partnersdealings with them;
(b) the Company will shall not, directly or indirectly, (i) sell, transfer or pledge or agree to sell, transfer or pledge any of the Shares, Preferred Stock or capital stock of and shall not permit any of its Subsidiaries beneficially owned by it; to: (iii) amend its Articles certificate of Incorporation incorporation or Bylaws by-laws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares or Preferred Stock or any outstanding capital stock of any of the Subsidiaries of the Company;
(c) neither the Company nor any of its Subsidiaries shall: (iii) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock, except that a wholly owned Subsidiary of the Company may declare and pay a dividend or make advances to its parent or the Company; (iiiii) issue, sell, transfer, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire any shares of, capital stock of any class or Voting Debt of the Company or any of its Subsidiaries, or any "phantom" stock, "phantom" stock rights, stock appreciation rights or stock-based performance units, other than shares of Company Common Stock reserved for issuance on the date hereof issuances pursuant to the exercise of Options outstanding on the date hereof; (iiiiv) split, combine or reclassify the outstanding Company Common Stock or any outstanding capital stock of any of the Subsidiaries of the Company or issue or authorize the issuance of any other securities of the Company in respect of, in lieu of or in substitution for shares of its capital stock; (v) except in the ordinary course of business consistent with past practice, take or omit to take any action with respect to any Tax Return, tax accounting period, tax election, tax claim or tax audit if any such action or omission would have the effect of materially increasing the Tax liability or materially reducing any Tax asset of the company or any of its Subsidiaries; or (vi) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock or any instrument or security which consists of or includes a right to acquire such shares;
(c) the Company shall not, and shall not permit any of its Subsidiaries to, transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any material assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any material indebtedness or other liability; or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock;
(d) neither the Company nor shall not, and shall not permit any of its Subsidiaries shall: to, acquire or publicly propose to acquire or agree to acquire (i) by merging or consolidating with, or by purchasing an equity interest in or a substantial portion of the assets of, or by any other manner, any business or any corporation, partnership, joint venture, association or other business organization or division thereof or (ii) any assets outside of the ordinary course of business consistent with past practice;
(e) the Company shall not grant any increase in the compensation payable or to become payable by the Company or to any executive officers of the Company, and the Company shall not, and shall not permit any of its Subsidiaries to (i) grant any increase in the compensation payable or to become payable, except for increases in the ordinary course of business consistent with past practice, including in connection with internal promotions, and consistent with past practice, to employees of the Company or its employees; (ii) (A) Subsidiaries or any executive officer of the Company's Subsidiaries or enter into or adopt any new, or (B) amend or otherwise increase, increase or accelerate the payment or vesting of the amounts any benefit or amount payable or to become payable under any existingany, bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan agreement plan, or other contract, agreement, commitment, arrangement, plan, trust fund or policy maintained or contributed to or entered into by the Company or any of its Subsidiaries for the benefit of any employee; or (iiiii) enter into any employment (other than "at will") or severance agreement with or, except in accordance with the existing written policies and practices of the CompanyCompany existing on the date hereof with respect to non-executive employees, grant any severance or termination pay to any officer, director or employee of the Company or any of its Subsidiaries;
(ef) neither the Company nor shall not, and shall not permit any of its Subsidiaries shall to, other than with respect to contracts terminable upon no more than ninety (90) days notice without penalty, (i) enter into any new contract with a term in excess of twelve (12) months and which is material to the Company and its Subsidiaries, taken as a whole, or (ii) modify, amend amend, terminate, renew or terminate fail to use reasonable business efforts to renew any of its material contracts contract or waive, release or assign any material rights or claims thereunder;
(f) neither agreement to which the Company nor or any of its Subsidiaries shall permit any is a party, which is material insurance policy naming it to the Company and its Subsidiaries taken as a beneficiary or a loss payable payee to be cancelled or terminated without notice to Parentwhole;
(g) neither the Company nor shall not, and shall not permit any of its Subsidiaries shall: (i) incur or assume any long-term debt or any short-term indebtedness; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person, except in the ordinary course of business and consistent with past practice; (iii) make any loans, advances or capital contributions to, or investments in, change any other person (other than to wholly owned Subsidiaries of the Company accounting principles used by it except as required by law, rule, regulation or customary loans or advances to employees in accordance with past practice); or (iv) enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate)GAAP;
(h) neither the Company nor shall not, and shall not permit any of its Subsidiaries shall change any of the accounting methods used by it unless required by GAAP;
(i) neither the Company nor any of its Subsidiaries shall pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company and its consolidated Subsidiaries;
(j) neither the Company nor any of its Subsidiaries will to adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than the Merger);
(ki) neither the Company nor shall not, and shall not permit any of its Subsidiaries will to, amend, renew, terminate or cause to be extended any material lease, agreement or arrangement relating to any of its leased properties or enter into any material lease, agreement or arrangement with respect to any real property;
(j) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree to commit to take, any action that would make any representation or warranty materially impair the ability of the Company contained hereinCompany, Parent or Purchaser to consummate the Offer or the Merger in accordance with the case of any representation terms hereof or warranty not qualified by materiality, materially inaccurate or, in the case of any other representation or warranty, inaccurate in any respect at, or as of any time prior to, the Effective Time; anddelay such consummation;
(lk) neither the Company nor shall not, and shall not permit any of its Subsidiaries will to, enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or publicly announce an intention to do any of the foregoing; and
(l) on or prior to the date on which the Purchaser purchases Shares pursuant to the Offer, the Company shall deliver to Parent a certification signed by an officer of the Company to the effect that the Company is not nor has it been within five (5) years of such date a "United States real property holding corporation" as defined in Section 897 of the Code.
Appears in 1 contract
Interim Operations of the Company. The Selling Shareholders shall severally and not jointly cause each of the Company covenants and agrees thatits Subsidiaries, from the date hereof to the Closing Date, except (i) as expressly provided in the Transaction Documents or (ii) as may be agreed in writing by Purchaser: (a) (i) to conduct its business diligently and in accordance with all applicable laws and regulations, (ii) not to hire any permanent employees, (iii) not to take any action or fail to act resulting in the cancellation, termination, suspension or other alteration or impairment in any way of the License and (iv) not to take any action which would impair any existing relations with customers or suppliers of goods or services, provided however that none of the Company, its Subsidiaries nor the Selling Shareholders shall be prohibited from taking any action (even if such action impairs such existing relations) related to the settlement of liabilities of the Company as contemplated by this Agreement, (ii) as set forth in Section 5.1 of the Company's Disclosure Schedule or (iii) as agreed in writing by Parent, after the date hereof, and prior to the time the designees of the Purchaser have been elected to, and shall constitute a majority of, the Board of Directors of the Company pursuant to Section 1.3 (the "Appointment Date"):
(a) the business of the Company and its Subsidiaries shall be conducted only in the ordinary and usual course and, to the extent consistent therewith, each of the Company and its Subsidiaries shall use its commercially reasonable best efforts to preserve its business organization intact and maintain its existing relations with customers, suppliers, employees, creditors and business partners;
; (b) the Company will not, directly or indirectly, not to (i) sell, transfer or pledge or agree to sell, transfer or pledge any of the Shares, Preferred Stock or capital stock of any of its Subsidiaries beneficially owned by it; (ii) amend its Articles of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares or Preferred Stock or any outstanding capital stock of any of the Subsidiaries of the Company;
(c) neither the Company nor any of its Subsidiaries shall: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, transfer, pledge, dispose of or encumber any additional shares ofof any class or series of its share capital, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire acquire, any shares of, capital stock of any class or series of the Company its capital stock or its Subsidiariesany Voting Debt, other than shares reserved for issuance on the date hereof pursuant to the exercise of Options outstanding on the date hereof; (iii) transferdeclare, lease, license, sell, mortgage, pledge, dispose of, set aside or encumber pay any material assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any material indebtedness dividend or other liability; distribution payable in cash, stock or property with respect to any shares of any class or series of its capita] stock, (iv) split, combine or reclassify any shares of any class or series of its capital stock or (ivv) redeem, purchase or otherwise acquire acquire, directly or indirectly indirectly, any shares of any class or series of its capital stock;
, or any instrument or security which consists of or 57 <PAGE> includes a right to acquire such shares; (c) not to organize any new Subsidiary or acquire any capital stock or other equity securities, or equity or ownership interest in the business, of any other Person; (d) neither the Company nor any of its Subsidiaries shall: (i) grant any increase in the compensation payable or not to become payable by the Company or any of its Subsidiaries to any of its employees; (ii) (A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under any existing, bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company or any its Subsidiaries;
(e) neither the Company nor any of its Subsidiaries shall modify, amend or terminate any Contract set forth in Schedule 4.22 of its material contracts the Closing Disclosure Schedule or waive, release or assign any material rights or claims thereunder;
; (fe) neither the Company nor any of its Subsidiaries shall permit any material insurance policy naming it as a beneficiary or a loss payable payee not to be cancelled or terminated without notice to Parent;
(g) neither the Company nor any of its Subsidiaries shall: (i) incur or assume any long-term debt or any short-term indebtedness; Indebtedness (except for Indebtedness to shareholders of the Company), (ii) assume, guarantee, endorse or otherwise take any action to become liable or responsible (whether directly, contingently or otherwise) for the liabilities or obligations of any other personPerson, except in the ordinary course of business and consistent with past practice; (iii) make except as set forth in Schedule 4.15(b) of the Closing Disclosure Schedule, assign, delegate or otherwise transfer to any loans, advances Selling Shareholder or capital contributions toany third-party all or any interest in, or investments inclaim in respect of, any receivables or other person (amounts that are owing to the Company or any of its Subsidiaries from Purchaser or the KSO Unit or any other than to wholly owned Subsidiaries rights of the Company or customary loans any of its Subsidiaries or advances any Selling Shareholder whether in respect of the KSO Unit or otherwise, provided however in each case that any such assignment, delegation or other transfer shall have been made without recourse and without any obligation to employees the Company whatsoever and the Company shall have no liabilities or obligations in accordance with past practice); respect of such assignment, delegation or other transfer that have not been fully performed or discharged on or prior to the Closing Date, (iv) enter dispose of or permit to lapse any rights to any Intellectual Property or (v) change any of the banking or safe deposit arrangements described or referred to in any part of the Signing Disclosure Schedule or the Closing Disclosure Schedule or open any new safe deposit boxes, savings, time deposit or checking accounts or other accounts of any nature, in each except to transfer to the Person designated by Purchaser (to the sole and absolute satisfaction of Purchaser) all 58 <PAGE> authority, right or interest in such banking or safe deposit arrangements; (f) except is set forth in Schedule 4.17(e) of the Closing Disclosure Schedule, not to sell, lease, license, hypothecate, mortgage, pledge, transfer or otherwise encumber or dispose or destroy any assets or property except to the KSO Unit; (g) except as set forth in Schedule 4.17(g) of the Closing Disclosure Schedule or as may otherwise be directly related to payments of severance, bonus or success fees (provided however that such the aggregate amount of such payments shall not exceed US$6,000,000), not to increase the compensation payable or to become payable to any of its officers, directors, commissioners, employees, agents or consultants (other than Prince Consulting, Canadian Imperial Bank of Commerce, Singapore office, Ernst & Young and PriceWaterhouseCoopers) or to Persons providing management services including by entering into or amending any material commitment employment, severance, consulting, termination or transaction (includingother agreement with, but not limited or employee benefit plan for, by making any loan or advance to, any borrowingof its officers, capital expenditure directors, commissioners, employees, agents or purchaseconsultants (other than Prince Consulting Canadian Imperial Bank of Commerce, sale Singapore office, Ernst & Young and PriceWaterhouseCoopers) or lease by making any change in its existing borrowing or lending arrangements for or on behalf of assets any of such Persons pursuant to an employee benefit plan or real estateotherwise, provided however that on and from the closing Date the Company shall have no liabilities or obligations in respect of any payments or other actions by the Company in respect of any of the matters as contemplated by this Section 6.1(g);
; (h) neither the Company nor any of its Subsidiaries shall change permit any insurance policy in effect as of the accounting methods used by date hereof and 59 <PAGE> naming it unless required by GAAP;
as a beneficiary or a loss payable payee to be canceled or terminated; (i) neither the Company nor any of its Subsidiaries shall pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company and its consolidated Subsidiaries;
(j) neither the Company nor any of its Subsidiaries will not to adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries Subsidiaries; (other than j) not to (i) change any of the Merger);
accounting methods used by it unless required by GAAP or (ii) except as set forth in Schedule 4.26(j) of the Signing Disclosure Schedule, make any election relating to Taxes, change any election relating to Taxes already made, adopt any accounting method relating to Taxes, change any accounting method relating to Taxes unless required by GAAP, enter into any closing agreement relating to Taxes, settle or consent to any claim or assessment relating to Taxes (except with respect to Taxes listed in Schedule 4.26(a) and Schedule 4.26(c) of the Signing Disclosure Disclosure) or waive the statute of limitations for any such claim or assessment; and (k) neither the Company nor any of its Subsidiaries will take, or agree not to commit to take, any action that would make any representation or warranty of the Company contained herein, in the case of any representation or warranty not qualified by materiality, materially inaccurate or, in the case of any other representation or warranty, inaccurate in any respect at, or as of any time prior to, the Effective Time; and
(l) neither the Company nor any of its Subsidiaries will enter into an any agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.
Appears in 1 contract
Interim Operations of the Company. The Company covenants and agrees that, after the date hereof and prior to the Closing Date, except (i) as expressly contemplated by provided in this Agreement, (ii) as set forth in Section 5.1 of the Company's Disclosure Schedule Schedule, or (iii) as may be agreed in writing by Parent, after the date hereof, and prior to the time the designees of the Purchaser have been elected to, and shall constitute a majority of, the Board of Directors of the Company pursuant to Section 1.3 (the "Appointment Date"):Optionee:
(a) the business of the Company and its the Company Subsidiaries shall be conducted only substantially in the same manner as heretofore conducted and in the ordinary course, and usual course and, the Company and the Company Subsidiaries shall use commercially reasonable efforts to preserve the extent consistent therewith, each business organization of the Company and its the Company Subsidiaries shall use its commercially reasonable best efforts to preserve its business organization intact intact, keep available the services of the current officers and employees of the Company and the Company Subsidiaries and maintain its the existing relations with franchisees, customers, suppliers, employeescreditors, creditors business partners and others having business partnersdealings with the Company or the Company Subsidiaries;
(b) the Company will not, directly and the Company Subsidiaries shall timely respond to all customer complaints as required by any applicable law or indirectly, (i) sell, transfer or pledge or agree to sell, transfer or pledge any of the Shares, Preferred Stock or capital stock of any of its Subsidiaries beneficially owned by it; (ii) amend its Articles of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares or Preferred Stock or any outstanding capital stock of any of the Subsidiaries of the CompanyGovernmental Entity;
(c) neither the Company nor any of its Subsidiaries Company Subsidiary shall: (i) declareamend its certificate of incorporation or by-laws or similar organizational documents, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, transfer, pledge, dispose of or encumber any additional shares ofof any class or series of its capital stock or Voting Debt, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire acquire, any shares of, capital stock of any class or series of the Company its capital stock or its Subsidiariesany Voting Debt, other than the shares of Common Stock reserved for issuance on the date hereof pursuant to the exercise of Company Options outstanding on the date hereof; ,
(iii) transferdeclare, lease, license, sell, mortgage, pledge, dispose of, set aside or encumber pay any material assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any material indebtedness dividend or other liabilitydistribution payable in cash, stock or property with respect to any shares of any class or series of its capital stock; (iv) split, combine or reclassify any shares of any class or series of its stock; or (ivv) redeem, purchase or otherwise acquire directly or indirectly any shares of any class or series of its capital stock;
, or any instrument or security which consists of or includes a right to acquire such shares (d) neither other than the Company nor any of its Subsidiaries shall: (i) grant any increase in the compensation payable redemption, purchase or to become payable other acquisition by the Company or any Company Subsidiary of its Subsidiaries to any shares of its employees; (ii) (A) adopt any new, Common Stock or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under any existing, bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company or any its Subsidiaries;
(e) neither the Company nor any of its Subsidiaries shall modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims thereunder;
(f) neither the Company nor any of its Subsidiaries shall permit any material insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to Parent;
(g) neither the Company nor any of its Subsidiaries shall: (i) incur or assume any long-term debt or any short-term indebtedness; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person, except in the ordinary course of business and consistent with past practice; (iii) make any loans, advances or capital contributions to, or investments in, any other person (other than to wholly Options not currently owned Subsidiaries of the Company or customary loans or advances to employees in accordance with past practice); or (iv) enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estateby an Optionor);
(h) neither the Company nor any of its Subsidiaries shall change any of the accounting methods used by it unless required by GAAP;
(i) neither the Company nor any of its Subsidiaries shall pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company and its consolidated Subsidiaries;
(j) neither the Company nor any of its Subsidiaries will adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than the Merger);
(k) neither the Company nor any of its Subsidiaries will take, or agree to commit to take, any action that would make any representation or warranty of the Company contained herein, in the case of any representation or warranty not qualified by materiality, materially inaccurate or, in the case of any other representation or warranty, inaccurate in any respect at, or as of any time prior to, the Effective Time; and
(l) neither the Company nor any of its Subsidiaries will enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.
Appears in 1 contract
Samples: Option Agreement (Pmi Group Inc)
Interim Operations of the Company. The Company covenants and agrees that, except (i) as expressly contemplated by this Agreement, (ii) as set forth disclosed in Section 5.1 of the Company's Company Disclosure Schedule or (iii) as agreed in writing by Parent, after the date hereof, and prior to the time the designees directors of the Purchaser have been elected to, and shall constitute a majority of, the Board of Directors of the Company pursuant to Section 1.3 (the "Appointment Election Date"):
(a) the business of the Company and its Subsidiaries shall be conducted only in the ordinary and usual course of business, consistent with past practices and, to the extent consistent therewith, each of the Company and its Subsidiaries shall use its commercially reasonable best efforts to preserve its business organization intact and maintain its existing relations with customers, supplierssuppliers and other third parties, employeesand to keep available the services of their present officers, creditors employees and business partnersassociates;
(b) each of the Company and its Subsidiaries will not, directly or indirectly, (i) sell, transfer amend or pledge or agree propose any change to sell, transfer or pledge any of the Shares, Preferred Stock or capital stock of any of its Subsidiaries beneficially owned by it; (ii) amend its Articles Certificate of Incorporation or Bylaws By-laws or similar organizational documents; documents or (iiiii) split, combine or reclassify the outstanding Shares or Preferred Stock or any its outstanding capital stock of any of the Subsidiaries of the Companystock;
(c) neither the Company nor any of its Subsidiaries shall: (i) declare, set aside or pay any dividend or other distribution (whether payable in cash, stock or property or any combination thereof) with respect to its capital stockstock (other than cash dividends from any wholly-owned Subsidiary of the Company to the Company or any other Subsidiary of the Company all of the capital stock of which is owned directly or indirectly by the Company); (ii) issue, sell, pledge, dispose of issue or encumber sell any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire acquire, any shares of, of capital stock of any class of the Company or its Subsidiaries, other than shares reserved for issuance on the date hereof issuances pursuant to the exercise of Options outstanding on the date hereofhereof and disclosed on Schedule 3.2(a) hereto or conversion of Class A Shares into Common Shares in accordance with the terms thereof; (iii) transfersell, lease, license, sell, mortgage, pledge, license (subject to the further restrictions of paragraph (vi) hereof) or dispose of, of any assets or encumber any material assets properties other than in the ordinary and usual course of business and consistent with past practicepractices which individually or in the aggregate are in an amount in excess of $500,000; (iv) incur, or incur assume, prepay or modify any material indebtedness or debt, other liability; or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock;
(d) neither the Company nor any of its Subsidiaries shall: (i) grant any increase than in the compensation payable or to become payable by the Company or any ordinary course of its Subsidiaries to any of its employeesbusiness consistent with past practices; (iiv) license or sublicense (Ain each case subject to the further restrictions of paragraph (vi) adopt hereof) any new, asset or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under any existing, bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee property of the Company or any its Subsidiaries;
(e) neither Subsidiary of the Company nor any of its Subsidiaries shall modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims thereunder;
(f) neither the Company nor any of its Subsidiaries shall permit any material insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to Parent;
(g) neither the Company nor any of its Subsidiaries shall: (i) incur or assume any long-term debt or any short-term indebtedness; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person, except in the ordinary course of business and consistent with past practice; (iii) make practice on a basis that results in a positive current royalty net of any loans, advances or capital contributions to, or investments in, any other person (other than to wholly owned Subsidiaries of royalties due by the Company or customary loans any Subsidiary on account of sales by the licensee or advances to employees in accordance with past practice)sublicensee; (vi) license or (iv) enter into sublicense any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate);
(h) neither the Company nor any of its Subsidiaries shall change any of the accounting methods used by it unless required by GAAP;
(i) neither the Company nor any of its Subsidiaries shall pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company and its consolidated Subsidiaries;
(j) neither the Company nor any of its Subsidiaries will adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization Intellectual Property of the Company or any of its Subsidiaries Subsidiary; or (other than the Merger);
(kvii) neither the Company nor redeem, purchase or otherwise acquire, directly or indirectly, any of its Subsidiaries will take, or agree to commit to take, any action that would make any representation or warranty of the Company contained herein, in the case of any representation or warranty not qualified by materiality, materially inaccurate or, in the case of any other representation or warranty, inaccurate in any respect at, or its Subsidiaries' capital stock (except as of any time prior to, the Effective Time; and
(l) neither the Company nor any of its Subsidiaries will enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.contemplated by
Appears in 1 contract
Interim Operations of the Company. The Company covenants and agrees thatthat prior to the Effective Date, except (i) as expressly contemplated by this Agreement, (ii) as set forth in Section 5.1 of the Company's Disclosure Schedule Interim Business Plan, or (iii) as agreed in writing by Parent, after the date hereof, and prior to the time the designees of the Purchaser have been elected to, and shall constitute a majority of, the Board of Directors of the Company pursuant to Section 1.3 (the "Appointment Date")::
(a) the business of the Company and its the Company Subsidiaries shall be conducted only in the usual, regular and ordinary course and usual course andsubstantially in the same manner as heretofore conducted, to and except as otherwise required or prohibited by this Section 5.1 or the extent consistent therewithInterim Business Plan, each of the Company and its Company Subsidiaries shall use its commercially reasonable best efforts to preserve its business organization intact intact, and maintain its existing relations with franchisees, customers, suppliers, employeescreditors, creditors business partners and others having business partnersdealings with it, to the end that the goodwill and ongoing business of each of them shall be materially unimpaired at the Effective Time, and the Company will comply with its obligations and covenants in the Interim Business Plan;
(b) the Company will not, directly or indirectly, (i) sell, transfer or pledge or agree to sell, transfer or pledge any of the Shares, Preferred Stock or capital stock of any of its Subsidiaries beneficially owned by it; (ii) amend its Articles of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares or Preferred Stock or any outstanding capital stock of any of the Subsidiaries of the Company;
(c) neither the Company nor any of its Subsidiaries Company Subsidiary shall: (i) declareamend its certificate of incorporation or by-laws or similar organizational documents, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, transfer, pledge, dispose of or encumber any additional shares ofof any class or series of its capital stock or Voting Debt, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire acquire, any shares of, capital stock of any class or series of the Company its capital stock or its Subsidiariesany Voting Debt, other than shares Shares reserved for issuance on the date hereof pursuant to the exercise of Company Options or Company Warrants outstanding on the date hereof, (iii) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to any shares of any class or series of its capital stock; (iv) split, combine or reclassify any shares of any class or series of its stock; or (v) redeem, purchase or otherwise acquire directly or indirectly any shares of any class or series of its capital stock, or any instrument or security which consists of or includes a right to acquire such shares;
(c) neither the Company nor any of Company Subsidiaries shall (i) incur or modify any indebtedness or other liability, other than in the ordinary and usual course of business and consistent with past practice; or (ii) modify, amend or terminate any of its material contracts or waive, release or assign any material rights or Claims, except in the ordinary course of business and consistent with past practice;
(d) neither the Company nor any of Company Subsidiaries shall: (i) incur or assume any long-term debt, or except in the ordinary course of business, incur or assume any short-term indebtedness in amounts not consistent with past practice; (ii) modify the terms of any indebtedness or other liability; (iii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person, except as described in the Disclosure Schedule as being in the ordinary course of business and consistent with past practice; (iv) make any loans, advances or capital contributions to, or investments in, any other person (other than to or in wholly owned Subsidiaries of the Company); or (v) enter into any material commitment or transaction (including, but not limited to, any material capital expenditure or purchase, sale or lease of assets or real estate);
(e) neither the Company nor any Company Subsidiary shall transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any material assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any material indebtedness or other liability; or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock;
(df) neither except as otherwise specifically provided in this Agreement or as otherwise described in the Company nor Disclosure Schedule, make any of its Subsidiaries shall: (i) grant any increase change in the compensation payable or to become payable by the Company or any of its Subsidiaries to any of its officers, directors, employees; , agents or consultants (iiother than normal recurring increases in wages to employees who are not officers or directors or Affiliates in the ordinary course of business consistent with past practice) (A) adopt any newor to Persons providing management services, or enter into or amend any employment, severance, consulting, termination or other agreement or employee benefit plan (Bincluding, without limitation any Company health Plan) amend or make any loans to any of its officers, directors, employees, Affiliates, agents or consultants or make any change in its existing borrowing or lending arrangements for or on behalf of any of such Persons pursuant to an employee benefit plan or otherwise;
(g) except as otherwise increasespecifically contemplated by this Agreement or as otherwise described in the Disclosure Schedule, pay or accelerate the make any accrual or arrangement for payment of any pension, retirement allowance or vesting other employee benefit pursuant to any existing plan, agreement or arrangement (including, without limitation any Company health Plan) to any officer, director, employee or Affiliate or pay or agree to pay or make any accrual or arrangement for payment to any officers, directors, employees or Affiliates of the amounts payable Company of any amount relating to unused vacation days, except payments and accruals made in the ordinary course of business consistent with past practice; adopt or pay, grant, issue, accelerate or accrue salary or other payments or benefits pursuant to become payable under any existingpension, profit-sharing, bonus, incentive extra compensation, incentive, deferred compensation, severance, profit sharingstock purchase, stock option, stock purchaseappreciation right, group insurance, pensionseverance pay, retirement or other employee benefit plan (including, without limitation any Company health Plan), agreement or arrangement; , or (iii) enter into any employment or severance consulting agreement with oror for the benefit of any director, except officer, employee, agent or consultant, whether past or present; or amend in accordance any material respect any such existing plan, agreement or arrangement in a manner inconsistent with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company or any its Subsidiariesforegoing;
(eh) neither the Company nor any of its and the Company Subsidiaries shall modify, amend or terminate use commercially reasonable efforts to prevent any of its material contracts or waive, release or assign any material rights or claims thereunder;
(f) neither the Company nor any of its Subsidiaries shall permit any material insurance policy naming it or them as a beneficiary or a loss payable payee to lapse or to be cancelled or terminated without notice to Parent;
(g) neither the Company nor any of its Subsidiaries shall: (i) incur or assume any long-term debt or any short-term indebtedness; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person, except in the ordinary course of business and consistent with past practice; (iii) make any loans, advances or capital contributions to, or investments in, any other person (other than to wholly owned Subsidiaries of the Company or customary loans or advances to employees in accordance with past practice); or (iv) enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate);
(h) neither the Company nor any of its Subsidiaries shall change any of the accounting methods used by it unless required by GAAPcomparable substitute insurance is obtained;
(i) neither the Company nor any of its Company Subsidiaries shall enter into any contract or transaction relating to the purchase of assets other than in the ordinary course of business consistent with prior practices;
(j) neither the Company nor any Company Subsidiary shall pay, repurchase, discharge or satisfy any claims, of its Claims or other liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of any such claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company business and its consolidated Subsidiariesconsistent with past practice;
(jk) neither the Company nor any of its Company Subsidiaries will adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries Company Subsidiary (other than the Merger);
(kl) neither the Company nor any Company Subsidiary will (i) change any of the accounting methods used by it unless required by GAAP or (ii) make any material election relating to Taxes, change any material election relating to Taxes already made, adopt any material accounting method relating to Taxes, change any material accounting method relating to Taxes unless required by GAAP, enter into any closing agreement relating to Taxes, settle any Claim or assessment relating to Taxes or consent to any such claim or assessment relating to Taxes or any waiver of the statute of limitations for any such claim or assessment;
(m) except for this Agreement and the transactions expressly contemplated hereby, take any action or fail to take any action that could limit the utilization of any of the net operating losses, built-in losses, tax credits or other similar items of the Company and its Subsidiaries under Section 382, 383, 384 or 1502 of the Code and the Treasury Regulations thereunder;
(n) accelerate the collection of receivables or defer the payment of payables, or modify the payment terms of any receivables or payables, other than immaterial changes in a manner consistent with prudent and past business practice;
(o) neither the Company nor any of its Company Subsidiaries will take, or agree to commit to take, any action that would or is reasonably likely to result in any of the conditions to the Offer set forth in Annex A or any of the conditions to the Merger set forth in Article VI not being satisfied, or would make any representation or warranty of the Company contained herein, in the case of any representation or warranty not qualified by materiality, materially inaccurate or, in the case of any other representation or warranty, herein inaccurate in any material respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company, Parent, Purchaser or the holders of Shares to consummate the Offer or the Merger in accordance with the terms hereof or materially delay such consummation; and
(lp) neither the Company nor any of its Company Subsidiaries will enter into an agreement, contract, binding commitment or binding arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.
Appears in 1 contract
Interim Operations of the Company. The Company covenants and agrees that, after the date hereof and prior to the Effective Time, except (i) as expressly contemplated by provided in this Agreement, (ii) as set forth in Section 5.1 of the Company's Company Disclosure Schedule Schedule, or (iii) as may be agreed in writing by Parent, after the date hereof, and prior to the time the designees of the Purchaser have been elected to, and shall constitute a majority of, the Board of Directors of the Company pursuant to Section 1.3 (the "Appointment Date")::
(a) the business of the Company and its Subsidiaries shall be conducted only in the ordinary Ordinary Course of Business, and usual course and, to the extent consistent therewith, each that it is in the best interests of the Company and its Subsidiaries shareholders, the Company shall use its commercially reasonable best efforts to preserve its the business organization intact of the Company in intact, keep available the services of the current officers and employees of the Company and maintain its the existing relations with franchisees, customers, suppliers, employeescreditors, creditors business partners and others having business partnersdealings with the Company, to the end that the goodwill and ongoing business of the Company shall be unimpaired at the Effective Time. The Company shall not institute any new methods of manufacture, purchase, sale, lease, management, accounting or operation or engage in any transaction or activity other than minor changes in the Ordinary Course of Business;
(b) the Company will shall not, directly or indirectly, : (i) sell, transfer or pledge or agree to sell, transfer or pledge any of the Shares, Preferred Stock or capital stock of any of its Subsidiaries beneficially owned by it; (ii) amend its Articles of Incorporation or Bylaws bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares or Preferred Stock or any outstanding capital stock of any of the Subsidiaries of the Company;
(c) neither the Company nor any of its Subsidiaries shall: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, transfer, pledge, dispose of or encumber any additional shares ofof any class or series of its capital stock, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire acquire, any shares of, capital stock of any class or series of the Company or its Subsidiariescapital stock; provided, other than shares reserved for issuance on however, that after the date hereof pursuant and prior to the Effective Time, the Company shall have the explicit right to facilitate (A) the conversion of all outstanding shares of the Company's Series A Preferred Stock into shares of Company Common Stock in connection with the Transactions and (B) the exercise of Options any options to purchase Company Common Stock outstanding on as of the date hereof; (iii) transferdeclare, lease, license, sell, mortgage, pledge, dispose of, set aside or encumber pay any material assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any material indebtedness dividend or other liabilitydistribution payable in cash, stock or property with respect to any shares of any class or series of its capital stock; (iv) split, combine or reclassify any shares of any class or series of its stock; or (ivv) redeem, purchase or otherwise acquire directly or indirectly any shares of any class or series of its capital stock, or any instrument or security which consists of or includes a right to acquire such shares;
(c) the Company shall not organize any new subsidiary or acquire any capital stock or other equity securities, or equity or ownership interest in the business, of any other Person;
(d) neither the Company nor any of its Subsidiaries shall: (i) grant any increase in the compensation payable or to become payable by the Company or any of its Subsidiaries to any of its employees; (ii) (A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under any existing, bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company or any its Subsidiaries;
(e) neither the Company nor any of its Subsidiaries shall not modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims thereunderclaims, except in the Ordinary Course of Business;
(fe) neither other than the payment by the Company nor any of its Subsidiaries shall permit any material insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to Parent;
(g) neither Third Party Expenses, the Company nor any of its Subsidiaries shallshall not: (i) incur or assume any long-long term debt debt, or any short-except in the Ordinary Course of Business, incur or assume short term indebtednessIndebtedness exceeding One Hundred Fifty Thousand dollars ($150,000) in the aggregate from the date hereof until the Closing; (ii) pay, repay, discharge, purchase, repurchase or satisfy any Indebtedness isxxxx xx xxxxxxxxxx xx xxx Xxxxxxx, xxxept as required by the terms thereof; (iii) modify the terms of any Indebtedness or other liability; (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other personPerson, except as described in the ordinary course Company Disclosure Schedule as being in the Ordinary Course of business Business and consistent with past practice; (iiiv) make any loans, advances or capital contributions to, or investments in, any other person Person; (other than to wholly owned Subsidiaries of the Company or customary loans or advances to employees in accordance with past practice); or (ivvi) enter into any material commitment or transaction (including, but not limited to, including any borrowing, capital expenditure or purchase, sale or lease of assets or real estate); (vii) write down the value of any inventory or write off as uncollectible any notes or accounts receivable; or (viii) dispose of or permit to lapse any rights to any Intellectual Property;
(f) the Company shall not lease, license, mortgage, pledge or encumber any assets other than in the Ordinary Course of Business or transfer, sell or dispose of any assets other than in the Ordinary Course of Business or dispose of or permit to lapse any rights to any Intellectual Property;
(g) the Company shall not make any change in the compensation payable or to become payable to any of its officers, directors, employees, agents or consultants (other than normal recurring increases in the Ordinary Course of Business of wages payable to employees who are not officers or directors or Affiliates of the Company) or to Persons providing management services, or enter into or amend any employment, severance, consulting, termination or other agreement with, or employee benefit plan for, or make any loan or advance to, any of its officers, directors, employees, Affiliates, agents or consultants or make any change in its existing borrowing or lending arrangements for or on behalf of any of such Persons pursuant to an employee benefit plan or otherwise;
(h) neither the Company nor shall not (i) pay or make any accrual or arrangement for payment of its Subsidiaries shall change any pension, retirement allowance or other employee benefit pursuant to any existing plan, agreement or arrangement to any officer, director, employee or Affiliate or pay or agree to pay or make any accrual or arrangement for payment to any officer, director, employee or Affiliate of any amount relating to unused vacation days, except to the accounting methods used by it unless required by GAAPextent the Company is unconditionally obligated to do so on the date hereof, (ii) adopt or pay, grant, issue, accelerate or accrue salary or other payments or benefits pursuant to any pension, profit-sharing, bonus, extra compensation, incentive, deferred compensation, stock purchase, stock option, stock appreciation right, group insurance, severance pay, retirement or other employee benefit plan, agreement or arrangement, or any employment or consulting agreement with or for the benefit of any director, officer, employee, agent or consultant, whether past or present, except to the extent the Company is unconditionally obligated to do so on the date hereof, or (iii) amend in any material respect any such existing plan, agreement or arrangement in a manner inconsistent with the foregoing;
(i) neither the Company nor shall not permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to Parent, except policies providing coverage for losses not in excess of its Subsidiaries $100,000 which are replaced without diminution of or gaps in coverage;
(j) the Company shall not enter into any contract or transaction relating to the purchase of assets other than in the Ordinary Course of Business;
(k) except for the payment by the Company of Third Party Expenses, the Company shall not pay, repurchase, discharge or satisfy any of its claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the Ordinary Course of any such Business, of claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (Internally Prepared Financial Statements or incurred since the notes thereto) Closing Date Balance Sheet in the Ordinary Course of the Company and its consolidated SubsidiariesBusiness;
(jl) neither the Company nor any of its Subsidiaries will shall not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than the Merger)Company;
(km) neither the Company nor shall not (i) change any of its Subsidiaries will the accounting methods used by it unless required by GAAP or (ii) make any election relating to Taxes, change any election relating to Taxes already made, adopt any accounting method relating to Taxes, change any accounting method relating to Taxes unless required by GAAP, enter into any closing agreement relating to Taxes, settle any claim or assessment relating to Taxes or consent to any claim or assessment relating to Taxes or any waiver of the statute of limitations for any such claim or assessment;
(n) the Shareholder Representative shall deliver to Parent at or prior to the Closing a certificate or certificates on behalf of the Shareholders, in form and substance reasonably satisfactory to Parent and consistent with Treasury Regulation Section 1.897-2(h), certifying that the acquisition is exempt from withholding pursuant to the Foreign Investment in Real Property Tax Act;
(o) Parent shall pay all New York State stock transfer taxes incurred in connection with the exchange of Company Common Stock for Parent Common Stock, and Parent shall be entitled to all refunds of such stock transfer taxes;
(p) the Company shall not take, or agree to or commit to take, any action that would or is reasonably likely to result in any of the conditions to the Closing set forth in Article IX not being satisfied, or would make any representation or warranty of the Company contained herein, in the case of any representation or warranty not qualified by materiality, herein materially inaccurate or, in the case of any other representation or warranty, inaccurate in any respect at, or as of any time prior to, the Effective TimeClosing Date, or that would materially impair the ability of the Company, Parent or Merger Sub to consummate the Transactions in accordance with the terms hereof or materially delay such consummation; and
(lq) neither the Company nor any of its Subsidiaries will shall not enter into an any agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do do, any of the foregoing; provided, however, that notwithstanding the foregoing, the Company shall have the explicit right to (1) facilitate (A) the conversion of all outstanding shares of the Company's Series A Preferred Stock into shares of Company Common Stock in connection with the Transactions and (B) the exercise of any options to purchase Company Common Stock outstanding as of the date hereof and (2) terminate, modify or renegotiate the License Agreement.
Appears in 1 contract
Samples: Merger Agreement (Powerhouse Technologies Group Inc)
Interim Operations of the Company. The Company covenants and agrees that, except (i) as expressly contemplated permitted by this Agreement, (ii) as set forth disclosed in Section 5.1 any of the Company's Disclosure Schedule Schedules, or (iii) as agreed in writing by Parent, after the date hereof, and prior to the time the designees of the Purchaser have been elected to, and shall constitute a majority of, the Board of Directors of the Company pursuant to Section 1.3 (the "Appointment Date"):Effective Time:
(a) the business of the Company and its Subsidiaries shall be conducted only in the ordinary course of business consistent with past practice and usual course and, to the extent consistent therewith, each of in compliance in all material respects with all applicable laws and regulations and the Company and its Subsidiaries shall use its commercially reasonable best efforts to preserve its intact their current business organization intact organizations, to keep available the services of their current officers and maintain its existing relations other key employees and to preserve their relationships with customers, suppliers, employees, creditors those persons having business dealings with them to the end that their goodwill and business partnersongoing businesses shall be unimpaired at the Effective Time;
(b) the Company will shall not, directly or indirectly, (i) sell, transfer or pledge or agree to sell, transfer or pledge any of the Shares, Preferred Company Common Stock or capital stock of any of its Subsidiaries beneficially owned by it, either directly or indirectly other than pursuant to the exercise of Options outstanding on the date hereof and disclosed on Schedule 3.2 or Options received by non-employee directors after the date hereof pursuant to the third sentence of Section 6(a) of the Option Plan; (ii) amend its Articles Certificate of Incorporation or Bylaws By-laws or similar organizational documents; or (iii) split, combine or reclassify re- classify the outstanding Shares or Preferred Company Common Stock or any outstanding capital stock of any of the Subsidiaries of the Company;
(c) neither the Company nor any of its Subsidiaries shall: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stockstock other than dividends from a wholly-owned Subsidiary to another Subsidiary or to the Company; (ii) issue, sell, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire acquire, any shares of, of capital stock of any class of the Company or its Subsidiaries, other than shares reserved for issuance on the date hereof of Company Common Stock issued pursuant to the exercise of Options outstanding on the date hereofhereof and disclosed on Schedule 3.2 or Options received by non-employee directors after the date hereof pursuant to the third sentence of Section 6(a) of the Option Plan; (iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any material assets other than in the ordinary and usual course of business and consistent or properties with past practice, or an aggregate value exceeding $500,000; (iv) incur or modify any material indebtedness or other material liability, in an amount exceeding $2,000,000, provided that the Company may borrow money for use in the ordinary and usual course of business; (v) acquire or agree to acquire by merger or consolidation, or purchase a substantial portion of the stock or assets of, any business or any Person; or (ivvi) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock;
(d) neither the Company nor any of its Subsidiaries shall: shall (i) grant enter into any increase contract or agreement that if in existence as of the date hereof would constitute a Material Contract, other than in the compensation payable or to become payable by the Company or any ordinary course of its Subsidiaries to any of its employeesbusiness consistent with past practice; (ii) (A) adopt enter into any newcontract, agreement, commitment or arrangement providing for, or (B) amend any contract, agreement, commitment or otherwise increasearrangement to provide for, or accelerate the payment or vesting taking of the amounts payable or to become payable under any existing, bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan agreement or arrangementaction that would be prohibited hereunder; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company or any its Subsidiaries;
(e) neither the Company nor any of its Subsidiaries shall modify, amend or terminate the Name Agreement or any of its material contracts or Material Contracts or, except in the ordinary course of business and consistent with past practice, waive, release or assign any material rights or claims thereunder(absolute, accrued, asserted or unasserted, contingent or otherwise) in a manner materially adverse to the Company or Subsidiary party thereto; (iv) pay, discharge or satisfy any claim, liability or obligation exceeding $250,000 (absolute, accrued, asserted or unasserted, contingent or otherwise) other than the payment, discharge or satisfaction in the ordinary course of business of liabilities reflected or reserved against in the consolidated financial statements of the Company and its Subsidiaries or incurred in the ordinary course of business; or (v) waive the benefits of, or agree to modify in any manner, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is a party, provided, however, that the Company may enter into a lease in connection with the relocation (to a location within a fifty mile radius of the present location) of its headquarters (the "Headquarters Lease") on such terms and provisions as the Company shall determine provided that the annual lease rental payable to the landlord under such lease does not exceed one million five hundred thousand dollars ($1,500,000) (excluding the effect of common area maintenance charges, operating expense pass-throughs, or similar charges, including, without limitation, insurance, tax and other costs required to be paid by the Company and excluding the effect of any rental increases based upon a "cpi" factor or percentage increase in lieu thereof). The Company will keep Parent reasonably apprised of its relocation efforts and of the proposed terms of any such lease, and will consult in good faith with Parent with respect thereto;
(fe) neither the Company nor any of its Subsidiaries shall permit any material insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to Parent, except in the ordinary course of business and consistent with past practice;
(gf) neither the Company nor any of its Subsidiaries shall: (i) incur or assume any long-term debt or any short-term indebtedness; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other personPerson other than a Subsidiary, or in the case of a Subsidiary, the Company or a Subsidiary, except in the ordinary course of business and consistent with past practice; or (iiiii) make any loans, advances or capital contributions to, or investments in, any other person Person (other than to wholly owned Subsidiaries of the Company or customary loans or advances to employees Company), other than in accordance the ordinary course of business consistent with past practice); ;
(g) neither the Company nor any of its Subsidiaries shall materially change any of the accounting policies or (iv) enter into any material commitment procedures used by it unless required by GAAP or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate)applicable law;
(h) neither the Company nor any of its Subsidiaries shall change any of the accounting methods used by it unless required by GAAP;
(i) neither the Company nor any of its Subsidiaries shall pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company and its consolidated Subsidiaries;
(j) neither the Company nor any of its Subsidiaries will adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than the Merger);
(ki) except as permitted hereunder neither the Company nor any of its Subsidiaries will shall take, or agree to commit to take, any action that would make any representation or warranty of the Company contained herein, in the case of any representation or warranty not qualified by materiality, materially inaccurate or, in the case of any other representation or warranty, herein inaccurate in any material respect at, or as of any time prior to, the Effective Time; andTime (except for representations made as of a specific date) or would be reasonably likely to result in any of the conditions to the Merger set forth in Article VI not being satisfied, or that would materially impair the ability of the Company, Parent, the Purchaser or the holders of the Shares to consummate the Merger in accordance with the terms hereof or materially delay such consummation;
(lj) neither the Company nor any of its Subsidiaries shall make, or commit to make, any capital expenditure or expenditures which (1) exceed $1,000,000 in the aggregate excluding capital expenditures pursuant to (2) or (3) below; (2) exceed $1,000,000 in the aggregate in connection with any refurbishment of any Company-owned centres; and (3) exceed One Hundred Fifty Thousand Dollars ($150,000) in the aggregate in connection with the leasehold improvements relating to the Headquarters Lease and the written consent of Parent, which shall not be unreasonably withheld, shall be required for any capital expenditures in connection with the Headquarters Lease which exceed One Hundred Fifty Thousand Dollars ($150,000);
(k) neither the Company nor any of its Subsidiaries shall make or revoke any Tax election, or change (or make a request to any taxing authority to change) its Tax accounting methods, policies, practice or procedures, except in each case as required by GAAP or shall settle or compromise any Tax liability where the payment required by the Company or its Subsidiaries to compromise or settle such amount exceeds $100,000, in any case other than settlements or compromises of the matters disclosed on Schedule 3.12;
(i) establish any new compensation or benefit plan or arrangement which would require payments in excess of $100,000 in any twelve- month period, or (ii) enter into any employment, consulting, retention, termination, severance or change in control agreement with an executive officer where liability could exceed $100,000;
(m) neither the Company nor any of its Subsidiaries shall revalue in any material respect any of its assets, including, without limitation, writing down the value of inventory or writing-off notes or accounts receivable other than in the ordinary and usual course of business consistent with past practice or as required by GAAP;
(n) neither the Company nor any of its Subsidiaries shall settle or compromise any pending or threatened suit, action or claim relating to the transactions contemplated hereby without Parent's prior written consent which will not be unreasonably withheld where the aggregate amount paid by the Company in settlement (including, without limitation, by funding the retention amount under the applicable insurance policy) and all expenses incurred in connection with all such suits, actions or claims would not exceed five hundred thousand dollars ($500,000) and the Company, Parent and Purchaser and their affiliates are released as part of such settlement, or any other suit, action or claim which would require a payment by the Company or a Subsidiary in excess of $300,000 in the case of claims arising out of or in connection with the employment of the claimant or $100,000 in all other cases or would result in an agreement or covenant by the Company or Subsidiaries which would, or would reasonably be expected to, have a material adverse effect on the Company and its Subsidiaries, taken as a whole;
(o) neither the Company nor any of its Subsidiaries shall enter into any agreement or arrangement that limits or otherwise restricts the Company or any of its Subsidiaries or any successor thereto or that could, after the Effective Time, limit or restrict the Surviving Corporation and its affiliates (including Parent) or any successor thereto, from engaging or competing in any line of business or in any geographic area other than agreements pursuant to which the Company or a Subsidiary grants franchises to operate weight loss centres;
(p) neither the Company nor any of its Subsidiaries shall make any change to, or amend in any way, the employment contracts, salaries or other compensation of any officer, director, employee, agent, or other similar representative of the Company or any of its Subsidiaries whose annual compensation exceeds $100,000 or, in the case of directors, $25,000, other than changes or amendments that (i) are made in the ordinary course of business and consistent with past practice, (ii) do not and will not result in increases of more than 10% in the salary of any such Person, and (iii) do not and will not exceed, in the aggregate, the lesser of (A) 5% of the total salaries, wages and other compensation of all Employees whose annual compensation exceeds $100,000, taken as a whole or (B) $75,000 in the aggregate; provided that in no event shall there be any increase in compensation for any of the individuals listed on Schedule 5.1(a);
(q) neither the Company nor any of its Subsidiaries shall amend, alter, or terminate partially or completely, any Benefit Plan relating to or affecting any Employee where the incremental additional cost to the Company or any Subsidiary of any such action would exceed $100,000 in the twelve-month period following the taking of such action;
(r) neither the Company nor any of its Subsidiaries shall (i) enter into any labor or collective bargaining agreement, (ii) amend, alter or terminate any collective bargaining agreement to which it is a party in any manner that would, or would reasonably be expected to, have a material adverse effect on the Company and its Subsidiaries, taken as a whole; and
(s) neither the Company nor any of its Subsidiaries shall authorize or enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention agreement to do any of the foregoing.
Appears in 1 contract
Interim Operations of the Company. The Company covenants and agrees that, except (i) as expressly contemplated by this Agreement, (ii) as set forth disclosed in Section 5.1 of the Company's Company Disclosure Schedule or (iii) as agreed in writing by ParentXxxxxx, after the date hereof, and prior to the time the designees directors of the Purchaser have been elected to, and shall constitute a majority of, the Board of Directors of the Company pursuant to Section 1.3 1.03 (the "Appointment Election Date"):
(a) the business of the Company and its Subsidiaries shall be conducted only in the ordinary and usual course of business, consistent with past practices and, to the extent consistent therewith, each of the Company and its Subsidiaries shall use its commercially reasonable best efforts to preserve its business organization intact and maintain its existing relations with customers, supplierssuppliers and other third parties, employeesand to keep available the services of their present officers, creditors employees and business partnersassociates;
(b) each of the Company and its Subsidiaries will not, directly or indirectly, (i) sell, transfer amend or pledge or agree propose any change to sell, transfer or pledge any of the Shares, Preferred Stock or capital stock of any of its Subsidiaries beneficially owned by it; (ii) amend its Articles Certificate of Incorporation or Bylaws By-laws or similar organizational documents; documents or (iiiii) split, combine or reclassify the outstanding Shares or Preferred Stock or any its outstanding capital stock of any of the Subsidiaries of the Companystock;
(c) neither the Company nor any of its Subsidiaries shall: (i) declare, set aside or pay any dividend or other distribution (whether payable in cash, stock or property or any combination thereof) with respect to its capital stockstock (other than cash dividends from any wholly-owned Subsidiary of the Company to the Company or any other Subsidiary of the Company all of the capital stock of which is owned directly or indirectly by the Company); (ii) issue, sell, pledge, dispose of issue or encumber sell any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire acquire, any shares of, of capital stock of any class of the Company or its Subsidiaries, other than shares reserved for issuance on the date hereof issuances pursuant to the exercise of Options outstanding on the date hereofhereof and disclosed on Schedule 3.02
(a) hereto or conversion of Class A Shares into Common Shares in accordance with the terms thereof; (iii) transfersell, lease, license, sell, mortgage, pledge, license (subject to the further restrictions of paragraph (vi) hereof) or dispose of, of any assets or encumber any material assets properties other than in the ordinary and usual course of business and consistent with past practicepractices which individually or in the aggregate are in an amount in excess of $500,000; (iv) incur, or incur assume, prepay or modify any material indebtedness debt, other than in the ordinary course of business consistent with past practices; (v) license or other liabilitysublicense (in each case subject to the further restrictions of paragraph (vi) hereof) any asset or property of the Company or any Subsidiary of the Company except in the ordinary course of business consistent with past practice on a basis that results in a positive current royalty net of any royalties due by the Company or any Subsidiary on account of sales by the licensee or sublicensee; (vi) license or sublicense any Intellectual Property of the Company or any Subsidiary; or (ivvii) redeem, purchase or otherwise acquire acquire, directly or indirectly indirectly, any of its or its Subsidiaries' capital stockstock (except as contemplated by any employee benefit or stock plans or any employment or severance agreement as in effect on the date hereof);
(d) neither the Company nor any of its Subsidiaries shall: shall acquire (iby merger, consolidation or acquisition of stock or assets) grant any increase in the compensation payable or to become payable by the Company or any of its Subsidiaries to any of its employees; (ii) (A) adopt any newcorporation, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under any existing, bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement partnership or other employee benefit plan agreement business organization or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company or any its Subsidiariesdivision thereof;
(e) neither the Company nor any of its Subsidiaries shall modifymake any investment other than in readily marketable securities in an amount in excess of $500,000 in the aggregate whether by purchase of stock or securities, amend contributions to capital or terminate any of its material contracts or waive, release or assign any material rights or claims thereunderproperty transfer;
(f) neither the Company nor any of its Subsidiaries shall permit waive, release, grant, or transfer any rights of value material insurance policy naming it to the Company and its Subsidiaries taken as a beneficiary or a loss payable payee to be cancelled or terminated without notice to Parentwhole;
(g) neither the Company nor any of its Subsidiaries shall, except as may be required or contemplated by this Agreement or by applicable law, (i) enter into, adopt, materially amend or terminate any Benefit Plans, (ii) enter into or amend any retention plan or stay bonus arrangement, employment or severance agreement, (iii) increase in any manner the compensation or other benefits of its officers or directors or (iv) increase in any manner the compensation or other benefits of any other employees (except, in the case of this clause (iv), for normal increases in the ordinary course of business, consistent with past practices);
(h) neither the Company nor any of its Subsidiaries shall: (i) incur or assume any long-term debt or any short-term indebtedness; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other personperson (other than Subsidiaries of the Company), except pursuant to contractual indemnification agreements entered into in the ordinary course of business and business, consistent with past practicepractices; (iiiii) make any loans, advances or capital contributions to, or investments in, any other person (other than to wholly owned Subsidiaries of the Company or customary loans or and payroll, travel and similar advances to employees made in accordance the ordinary course of business consistent with past practicepractices); (iii) revalue in any material respect any of its assets, including, without limitation, writing down the value of inventory in any material manner or write-off of notes or accounts receivable in any material manner; or (iv) enter into any material commitment authorize or transaction (including, but not limited to, any borrowing, make capital expenditure expenditures which exceed $2,500,000 individually or purchase, sale or lease of assets or real estate);
(h) neither $20,000,000 in the Company nor any of its Subsidiaries shall change any of the accounting methods used by it unless required by GAAPaggregate;
(i) neither the Company nor any of its Subsidiaries shall pay, discharge or satisfy any material claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), ) other than the payment, discharge or satisfaction in the ordinary course of any such claimsbusiness, consistent with past practices, of liabilities or obligations reflected or reserved against in, or contemplated by, in the consolidated financial statements (or the notes thereto) of the Company and its consolidated Subsidiariesor incurred since the most recent date thereof pursuant to an agreement or transaction described in this Agreement (including the schedules hereto) or incurred in the ordinary course of business, consistent with past practices;
(j) neither the Company nor any of its Subsidiaries will adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization shall change in any material respect any of the Company accounting methods, principles, policies or any of its Subsidiaries (other than the Merger)procedures used by it unless required by GAAP or applicable law;
(k) the Company will not amend, modify or terminate any Material Agreement or enter into any new agreement material to the business of the Company, other than in the ordinary course of business consistent with past practices or with the prior written consent of Parent, which consent shall not be unreasonably withheld;
(l) neither the Company nor any Subsidiary will amend or modify any existing Affiliate Transaction or enter into any new Affiliate Transaction other than with the prior written consent of Parent;
(m) neither the Company nor any of its Subsidiaries will take, take or agree to commit to take, take any action that would make any representation or warranty of the Company contained herein, in the case of any representation or warranty not qualified by materiality, materially inaccurate or, in the case of any other representation or warranty, hereunder inaccurate in any respect at, or as of any time prior to, the Effective TimeElection Date; and
(ln) neither the Company nor any of its Subsidiaries will authorize or enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention agreement to do any of the foregoing.
Appears in 1 contract
Interim Operations of the Company. The Company covenants and agrees thatthat prior to the Effective Time, except (i) as expressly contemplated by this Agreement, (ii) as set forth in Section 5.1 6.1 of the Company's Disclosure Schedule Schedule, or (iii) as agreed consented to in writing by ParentFremont (which consent shall not be unreasonably withheld), after the date hereof, and prior to the time the designees of the Purchaser have been elected to, and shall constitute a majority of, the Board of Directors of the Company pursuant to Section 1.3 (the "Appointment Date")::
(a) the business of the Company and its the Company Subsidiaries shall be conducted only in the usual, regular and ordinary course and usual course andsubstantially in the same manner as heretofore conducted, to the extent consistent therewith, and each of the Company and its the Company Subsidiaries shall use its commercially reasonable best efforts to preserve its business organization intact intact, keep available the services of its current officers and key employees and maintain its existing relations with franchisees, customers, suppliers, employeescreditors, creditors business partners and others having business partnersdealings with it;
(b) the Company will not, directly or indirectly, (i) sell, transfer or pledge or agree to sell, transfer or pledge any of the Shares, Preferred Stock or capital stock of any of its Subsidiaries beneficially owned by it; (ii) amend its Articles of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares or Preferred Stock or any outstanding capital stock of any of the Subsidiaries of the Company;
(c) neither the Company nor any of its Subsidiaries Company Subsidiary shall: (i) declareamend its certificate of incorporation or by-laws or similar organizational documents, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, transfer, pledge, dispose of or encumber any additional shares ofof any class or series of its capital stock or Voting Debt, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire acquire, any shares of, capital stock of any class or series of the Company its capital stock or its Subsidiariesany Voting Debt, other than shares Shares (and associated Rights) reserved for issuance on the date hereof pursuant to the exercise of Stock Options outstanding on the date hereof, (iii) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to any shares of any class or series of its capital stock except (A) pursuant to the Rights Agreement and (B) for a cash dividend in the amount of $0.10 per share declared by the Board of Directors on March 15, 1999 and payable on April 15, 1999; (iv) split, combine or reclassify any shares of any class or series of its stock; or (v) redeem, purchase or otherwise acquire directly or indirectly any shares of any class or series of its capital stock, or any instrument or security which consists of or includes a right to acquire such shares;
(c) neither the Company nor any of the Company Subsidiaries shall (i) incur or modify any indebtedness or other liability, other than in the ordinary and usual course of business and consistent with past practice; or (ii) materially modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims, except in the ordinary course of business and consistent with past practice;
(d) neither the Company nor any of the Company Subsidiaries shall: (i) incur or assume any long-term debt, or except in the ordinary course of business, incur or assume any short-term indebtedness in amounts not consistent with past practice; (ii) materially modify the terms of any indebtedness or other liability, other than modifications of short term debt in the ordinary and usual course of business and consistent with past practice; (iii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person, except as described in the Disclosure Schedule as being in the ordinary course of business and consistent with past practice; (iv) make any loans, advances or capital contributions to, or investments in, any other person (other than to or in wholly owned Subsidiaries of the Company); or (v) enter into any material commitment or transaction (including, but not limited to, any capital expenditure or purchase, sale or lease of assets or real estate) except in the ordinary course of business consistent with past practice;
(e) neither the Company nor any Company Subsidiary shall transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any material assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any material indebtedness or other liability; or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock;
(df) neither the Company nor except as otherwise specifically provided in this Agreement, make any of its Subsidiaries shall: (i) grant any increase change in the compensation payable or to become payable by the Company or any of its Subsidiaries to any of its officers, directors, employees; , agents or consultants (iiother than normal recurring increases in wages to employees who are not officers or directors or Affiliates in the ordinary course of business consistent with past practice) (A) adopt or to Persons providing management services, except as required by any newPlan, or (B) enter into or amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under any existing, bonus, incentive compensation, deferred compensationemployment, severance, profit sharingconsulting, stock optiontermination or other agreement or employee benefit plan or make any loans to any of its officers, stock purchasedirectors, insuranceemployees, Affiliates, agents or consultants or make any change in its existing borrowing or lending arrangements for or on behalf of any of such Persons pursuant to an employee benefit plan or otherwise;
(g) except as otherwise specifically contemplated by this Agreement or as specifically set forth in the Disclosure Schedule and except as required by law, pay or make any accrual or arrangement for payment of any pension, retirement allowance or other employee benefit plan agreement or arrangement; or (iii) enter into not required by any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay Plan to any officer, director director, employee or employee Affiliate or pay or agree to pay or make any accrual or arrangement for payment to any officers, directors, employees or Affiliates of the Company of any amount relating to unused vacation days, except payments and accruals made in the ordinary course of business consistent with past practice; adopt or any its Subsidiaries;(except as required
(eh) except in the ordinary course of business consistent with past practice, neither the Company nor any of its Subsidiaries shall modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims thereunder;
(f) neither the Company nor any of its Subsidiaries Subsidiary shall permit any material insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to Parent;
(g) neither the Company nor any of its Subsidiaries shall: (i) incur or assume any long-term debt or any short-term indebtedness; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person, except in the ordinary course of business and consistent with past practice; (iii) make any loans, advances or capital contributions to, or investments in, any other person (other than to wholly owned Subsidiaries of the Company or customary loans or advances to employees in accordance with past practice); or (iv) enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate);
(h) neither the Company nor any of its Subsidiaries shall change any of the accounting methods used by it unless required by GAAPFremont;
(i) neither the Company nor any of its the Company Subsidiaries shall enter into any contract or transaction relating to the purchase of material assets other than in the ordinary course of business consistent with prior practices;
(j) neither the Company nor any Company Subsidiary shall pay, repurchase, discharge or satisfy any of its material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of any such claims, liabilities or obligations reflected or reserved against inbusiness and consistent with past practice, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company and its consolidated Subsidiariesas required by law;
(jk) neither the Company nor any of its the Company Subsidiaries will adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries Company Subsidiary (other than the MergerMerger and the Transactions);
(kl) neither the Company nor any Company Subsidiary will (i) change any of the accounting methods used by it unless required by GAAP or (ii) make any material election relating to Taxes, change any material election relating to Taxes already made, adopt any material accounting method relating to Taxes, change any material accounting method relating to Taxes, enter into any closing agreement relating to Taxes, settle any claim or assessment relating to Taxes or consent to any claim or assessment relating to Taxes or any waiver of the statute of limitations for any such claim or assessment;
(m) neither the Company nor any of its the Company Subsidiaries will take, or agree to commit to take, any action that would or is reasonably likely to result in any of the conditions to the Stock Purchase or the Merger set forth in Article VII not being satisfied, or would make any representation or warranty of the Company contained herein, in the case of any representation herein (other than representations and warranties which address matters only at a certain date or warranty not qualified by materiality, materially inaccurate or, in the case of any other representation or warranty, dates) inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company, Fremont, Sub or the holders of Shares to consummate the Merger or the Stock Purchase in accordance with the terms hereof or materially delay such consummation; and
(ln) neither the Company nor any of its the Company Subsidiaries will enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.
Appears in 1 contract
Samples: Agreement and Plan of Recapitalization and Merger (Juno Lighting Inc)
Interim Operations of the Company. The Company covenants and agrees that, except (i) as expressly contemplated by this Agreement, or (ii) as set forth in Section 5.1 of the Company's Disclosure Schedule or (iii) as agreed in writing by Parent, after the date hereof, and prior to the time the designees of the Purchaser have been elected to, and shall constitute a majority of, the Board of Directors of the Company pursuant to Section 1.3 (the "Appointment Date"):Effective Time:
(a) the business of the Company and each of its Subsidiaries shall be conducted only in the ordinary and usual course and, to the extent consistent therewith, each of the Company and its Subsidiaries shall use its commercially reasonable best efforts to preserve its business organization intact and maintain its existing relations with customers, suppliers, employees, creditors creditors, business partners and others having business partnersdealings with them;
(b) the Company will shall not, directly or indirectly, (i) sell, transfer or pledge or agree to sell, transfer or pledge any of the Shares, Preferred Stock or capital stock of and shall not permit any of its Subsidiaries beneficially owned by it; to: (iii) amend its Articles certificate of Incorporation incorporation or Bylaws by-laws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares or Preferred Stock or any outstanding capital stock of any of the Subsidiaries of the Company;
(c) neither the Company nor any of its Subsidiaries shall: (iii) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock, except that a wholly-owned Subsidiary of the Company may declare and pay a dividend or make advances to its parent or the Company; (iiiii) issue, sell, transfer, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire any shares of, capital stock of any class or Voting Debt of the Company or any of its Subsidiaries, other than shares of Company Common Stock reserved for issuance on the date hereof issuances pursuant to the exercise of Options outstanding on the date hereof; (iiiiv) split, combine or reclassify the outstanding Company Common Stock or any outstanding capital stock of any of the Subsidiaries of the Company; or (v) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock or any instrument or security which consists of or includes a right to acquire such shares;
(c) the Company shall not, and shall not permit any of its Subsidiaries to, transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any material assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any material indebtedness or other liability; or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock;
(d) neither the Company nor any of its Subsidiaries shall: (i) grant any increase in the compensation payable or to become payable by the Company or any of its Subsidiaries to any of its employees; (ii) (A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under any existing, bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company or any its Subsidiaries;
(e) neither the Company nor any of its Subsidiaries shall modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims thereunder;
(f) neither the Company nor any of its Subsidiaries shall permit any material insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to Parent;
(g) neither the Company nor any of its Subsidiaries shall: (i) incur or assume any long-term debt or any short-term indebtedness; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person, except in the ordinary course of business and consistent with past practice; (iii) make any loans, advances or capital contributions to, or investments in, any other person (other than to wholly owned Subsidiaries of the Company or customary loans or advances to employees in accordance with past practice); or (iv) enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate);
(h) neither the Company nor any of its Subsidiaries shall change any of the accounting methods used by it unless required by GAAP;
(i) neither the Company nor any of its Subsidiaries shall pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise)provided that such transactions, other than the paymentsales of inventory, discharge or satisfaction of any such claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company do not exceed $25,000 per transaction and its consolidated Subsidiaries;
(j) neither the Company nor any of its Subsidiaries will adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than the Merger);
(k) neither the Company nor any of its Subsidiaries will take, or agree to commit to take, any action that would make any representation or warranty of the Company contained herein, $250,000 in the case of any representation or warranty not qualified by materiality, materially inaccurate or, in the case of any other representation or warranty, inaccurate in any respect at, or as of any time prior to, the Effective Time; and
(l) neither the Company nor any of its Subsidiaries will enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.aggre-
Appears in 1 contract
Interim Operations of the Company. The Company and each of the Stockholders covenants and agrees that, on or after the date hereof and prior to the Closing Date, except (i) as expressly provided in this Agreement or as required to consummate the transactions contemplated by this Agreement, (ii) or as set forth in Section 5.1 of the Company's Disclosure Schedule or (iii) as may be agreed in writing in advance by Parent, after the date hereof, and prior to the time the designees of the Purchaser have been elected to, and shall constitute a majority of, the Board of Directors of the Company pursuant to Section 1.3 (the "Appointment Date"):Purchaser:
(a) the The business of the Company and its Subsidiaries shall be conducted only in the ordinary Ordinary Course of Business, and usual course and, to the extent consistent therewith, each of the Company and its Subsidiaries shall use its commercially reasonable best efforts to (i) preserve its the business organization intact of the Company intact, (ii) keep available the services of the current officers and employees of the Company and (iii) maintain its the existing relations with customers, suppliers, employeescreditors, creditors business partners and others having business partnersdealings with the Company, to the end that the goodwill and ongoing business of the Company shall be unimpaired in any materially adverse manner at the Closing Date. The Company shall not institute any new methods of manufacture, purchase, lease, management, accounting or operation or engage in any transaction or activity other than changes in the Ordinary Course of Business;
(b) the The Company will shall not, directly or indirectly, (i) sell, transfer or pledge or agree to sell, transfer or pledge any of the Shares, Preferred Stock or capital stock of any of its Subsidiaries beneficially owned by it; (ii) amend its Articles of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares or Preferred Stock or any outstanding capital stock of any of the Subsidiaries of the Company;
(c) neither the Company nor any of its Subsidiaries shall: (i) declareamend its Governing Documents, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, transfer, pledge, dispose of or encumber any additional shares ofof any class or series of its capital stock or Voting Debt, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire acquire, any shares of, capital stock of any class or series of the Company its capital stock or its Subsidiariesany Voting Debt, other than shares reserved for issuance on the date hereof pursuant to the exercise of Options in each case outstanding on the date hereof; , (iii) transferdeclare, lease, license, sell, mortgage, pledge, dispose of, set aside or encumber pay any material assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any material indebtedness dividend or other liabilitydistribution payable in cash, stock or property with respect to any shares of any class or series of its capital stock; (iv) split, combine or reclassify any shares of any class or series of its stock; or (ivv) redeem, purchase or otherwise acquire directly or indirectly any shares of any class or series of its capital stock, or any instrument or security which consists of or includes a right to acquire such shares;
(c) the Company shall not organize any new Subsidiary or acquire any capital stock or other equity securities, or equity or ownership interest in the business, of any other Person;
(d) neither the Company nor any of its Subsidiaries shall: shall not (i) grant any increase in the compensation payable or to become payable by the Company or any of its Subsidiaries to any of its employees; (ii) (A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under any existing, bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company or any its Subsidiaries;
(e) neither the Company nor any of its Subsidiaries shall modify, amend or terminate any of its material contracts Material Contracts or waive, release or assign any material rights or claims thereunderclaims, except in the Ordinary Course of Business or (ii) enter into a Change of Control Agreement;
(fe) neither the Company nor any of its Subsidiaries shall permit any material insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to Parent;
(g) neither the Company nor any of its Subsidiaries shallnot: (i) other than the Wxxxx Fargo Loan, incur or assume any long-term debt or any short-term indebtednessIndebtedness other than trade payables in the Ordinary Course of Business; (ii) except in the Ordinary Course of Business, pay, repay, discharge, purchase, repurchase or satisfy any Indebtedness issued or guaranteed by the Company, except as required by the terms thereof or this Agreement; (iii) modify the terms of any Indebtedness or, except in the Ordinary Course of Business, any other Liability, (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person, except in the ordinary course of business and consistent with past practice; (iii) make any loans, advances or capital contributions to, or investments in, any other person Person (other than to wholly owned Subsidiaries of the Company or customary loans or advances to employees in accordance with past practiceCompany); or , (ivv) enter into any material commitment or transaction other than those entered into in the Ordinary Course of Business; (includingvi) except in the Ordinary Course of Business, but write down the value of any inventory or write off as uncollectible any notes or accounts receivable; or (vii) dispose of or permit to lapse any rights to any material Company Intellectual Property;
(f) the Company shall not limited lease, license, mortgage, pledge or encumber any assets other than in the Ordinary Course of Business or transfer, sell or dispose of any assets other than in the Ordinary Course of Business;
(g) the Company shall not make any change in the compensation payable or to become payable to, or enter into or amend any employment, severance or termination or other Contract, or make any loan or advance to, any borrowingof its officers, capital expenditure directors, Affiliates or purchaseRelated Parties, sale or lease enter into or amend any employment, severance, consulting, termination or other Contract with, or employee benefit plan for, or make any loan or advance, in excess of assets $25,000.00 individually or real estate)$100,000.00 in the aggregate, to any of its employees, agents or consultants or make any change in its existing borrowing or lending arrangements for or on behalf of any of such Persons pursuant to an employee benefit plan or otherwise;
(h) neither the Company nor shall not (i) pay or make any accrual or arrangement for payment of its Subsidiaries shall change any pension, retirement allowance or other employee benefit pursuant to any existing plan, Contract or arrangement to any officer, director, employee or Affiliate or pay or agree to pay or make any accrual or arrangement for payment to any officer, director, employee or Affiliate of any amount relating to unused vacation days, except to the accounting methods used extent the Company is obligated to do so on the date hereof or is subsequently obligated to do so by it unless required Law or, in the case of employees that are not officers would, in the Ordinary Course of Business, make such payment, accrual or arrangement, (ii) adopt or pay, grant, issue, accelerate or accrue salary or other payments or benefits pursuant to any Benefit Plan, or any employment or consulting Contract with or for the benefit of any director, officer, employee, agent or consultant, whether past or present, except to the extent the Company is obligated to do so on the date hereof or is subsequently obligated to do so by GAAPLaw, or (iii) amend in any material respect any such plan, Contract or arrangement in a manner inconsistent with the foregoing;
(i) neither the Company nor shall not permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to Purchaser, except policies which are replaced without any material diminution of or gaps in coverage;
(j) the Company shall not enter into any Contract or transaction, or related series of Contracts or transactions, involving the expenditure in excess of $50,000.00 and relating to the purchase of assets other than in the Ordinary Course of Business or pursuant to its Subsidiaries existing capital expenditure budget made available to Purchaser in the Electronic Data Room;
(k) the Company shall not pay, repurchase, discharge or satisfy any of its claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the Ordinary Course of any such Business of claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (Financial Statements or incurred since the notes thereto) Balance Sheet Date in the Ordinary Course of the Company and its consolidated SubsidiariesBusiness;
(jl) neither the Company nor any of its Subsidiaries will shall not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than the Merger)Company;
(km) neither the Company nor any of its Subsidiaries will shall not take, or agree to or commit to take, any action that would result in any of the conditions to the Closing set forth in Article VII and Article VIII not being satisfied, or would make any representation or warranty of the Company or the Stockholders contained herein, in the case of any representation or warranty not qualified by materiality, materially inaccurate or, in the case of any other representation or warranty, herein inaccurate in any respect at, or as of any time prior to, the Effective TimeClosing Date, or that would materially impair the ability of the Company or Purchaser to consummate the Closing in accordance with the terms hereof or materially delay such consummation; and
(ln) neither the Company nor any of its Subsidiaries will shall not enter into an agreement, contractany Contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do do, any of the foregoing.
Appears in 1 contract
Samples: Merger Agreement (Clarus Corp)
Interim Operations of the Company. The Company covenants and agrees that, except (i) as expressly contemplated by this Agreement, (ii) as set forth in Section 5.1 of the Company's Disclosure Schedule 5.1, or (iii) as agreed consented to in writing by ParentParent (such consent not to be unreasonably withheld), after the date hereof, and prior to the time the designees of the Purchaser have been elected to, and shall constitute a majority of, the Board of Directors of the Company pursuant to Section 1.3 (the "Appointment Date"):Effective Time:
(a) the business of the Company and each of its Subsidiaries shall be conducted only in the ordinary and usual course and, to the extent consistent therewith, each of the Company and its Subsidiaries shall use its commercially reasonable best efforts to preserve its business organization substantially intact and maintain its existing relations with customers, suppliers, employees, creditors creditors, business partners and others having significant business partnersdealings with them;
(b) the Company will shall not, directly or indirectly, (i) sell, transfer or pledge or agree to sell, transfer or pledge any of the Shares, Preferred Stock or capital stock of and shall not permit any of its Subsidiaries beneficially owned by it; to: (iii) amend its Articles certificate of Incorporation incorporation or Bylaws by-laws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares or Preferred Stock or any outstanding capital stock of any of the Subsidiaries of the Company;
(c) neither the Company nor any of its Subsidiaries shall: (iii) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock, except that a wholly owned Subsidiary of the Company may declare and pay a dividend or make advances to its parent or the Company; (iiiii) issue, sell, transfer, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire any shares of, capital stock of any class or Voting Debt of the Company or any of its Subsidiaries, other than shares of Company Common Stock reserved for issuance on the date hereof issuances pursuant to the exercise of Options outstanding on the date hereof; (iiiiv) split, combine or reclassify the outstanding Company Common Stock or any outstanding capital stock of any of the Subsidiaries of the Company; or (v) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock or any instrument or security which consists of or includes a right to acquire such shares;
(c) the Company shall not, and shall not permit any of its Subsidiaries to, transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any material assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any material indebtedness or practice and other liability; or (iv) redeem, purchase or otherwise acquire directly or indirectly any than sales of its capital stockassets that do not exceed $250,000 per transaction and $1,500,000 in the aggregate;
(d) neither the Company nor shall not, and shall not permit any of its Subsidiaries shall: to, acquire or publicly propose to acquire or agree to acquire (i) by merging or consolidating with, or by purchasing an equity interest in or a substantial portion of the assets of, or by any other manner, any business or any corporation, partnership, joint venture, association or other business organization or division thereof or (ii) any assets outside of the ordinary and usual course of business;
(e) the Company shall not grant any increase in the compensation payable or to become payable by the Company or to any executive officers of the Company, and the Company shall not, and shall not permit any of its Subsidiaries to (i) grant any of its employees; (ii) (A) adopt any new, or (B) amend or otherwise increase, or accelerate increase in the payment or vesting of the amounts compensation payable or to become payable under any existing, bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan agreement or arrangement; or (iii) enter into any employment or severance agreement with orpayable, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company or any its Subsidiaries;
(e) neither the Company nor any of its Subsidiaries shall modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims thereunder;
(f) neither the Company nor any of its Subsidiaries shall permit any material insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to Parent;
(g) neither the Company nor any of its Subsidiaries shall: (i) incur or assume any long-term debt or any short-term indebtedness; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person, except in the ordinary course of business and consistent with past practice; (iii) make any loans, advances or capital contributions to, or investments in, any other person (other than to wholly owned Subsidiaries of the Company or customary loans or advances to employees in accordance with past practice); or (iv) enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate);
(h) neither the Company nor any of its Subsidiaries shall change any of the accounting methods used by it unless required by GAAP;
(i) neither the Company nor any of its Subsidiaries shall pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company and its consolidated Subsidiaries;
(j) neither the Company nor any of its Subsidiaries will adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than the Merger);
(k) neither the Company nor any of its Subsidiaries will take, or agree to commit to take, any action that would make any representation or warranty of the Company contained herein, in the case of any representation or warranty not qualified by materiality, materially inaccurate or, in the case of any other representation or warranty, inaccurate in any respect at, or as of any time prior to, the Effective Time; and
(l) neither the Company nor any of its Subsidiaries will enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.for
Appears in 1 contract
Interim Operations of the Company. The Company covenants and --------------------------------- agrees thatthat prior to the Appointment Date, except (i) as expressly contemplated by this Agreement, (ii) as set forth in Section 5.1 6.1 of the Company's Company Disclosure Schedule Letter or (iii) as agreed in writing by Parent, after the date hereof, and prior to the time the designees of the Purchaser have been elected to, and hereof (which agreement shall constitute a majority of, the Board of Directors of the Company pursuant to Section 1.3 (the "Appointment Date"not be unreasonably withheld or delayed):
(a) the business of the Company and its each of the Company Subsidiaries shall be conducted only in the ordinary course and usual course andsubstantially in the same manner as heretofore conducted, to the extent consistent therewith, each of and the Company and its Subsidiaries each Company Subsidiary shall use its commercially reasonable best efforts to preserve its business organization intact intact, keep available the services of its current officers and employees and maintain its existing relations with franchisees, customers, suppliers, employeescreditors, creditors business partners and others having business partnersdealings with it, to the end that the goodwill and ongoing business of all of them shall be unimpaired at the Appointment Date;
(b) the Company will not, directly or indirectly, (i) sell, transfer or pledge or agree to sell, transfer or pledge any of the Shares, Preferred Stock or capital stock of any of its Subsidiaries beneficially owned by it; (ii) amend its Articles of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares or Preferred Stock or any outstanding capital stock of any of the Subsidiaries of the Company;
(c) neither the Company nor any of its Subsidiaries Company Subsidiary shall: (i) declareamend its certificate of incorporation or by-laws or similar organizational documents, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, transfer, pledge, dispose of or encumber any additional shares ofof any class or series of its capital stock or Voting Debt, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire acquire, any shares of, capital stock of any class or series of the Company its capital stock or its Subsidiariesany Voting Debt, other than shares Shares reserved for issuance on the date hereof of this Agreement pursuant to the exercise of Company Options and purchase rights under the Company ESPP outstanding on the date hereof; of this Agreement, (iii) transferdeclare, leaseset aside or pay any dividend or other distribution payable in cash, licensestock or property with respect to any shares of any class or series of its capital stock, sell(iv) split, mortgagecombine or reclassify any shares of any class or series of its stock or (v) redeem, pledge, dispose ofpurchase or otherwise acquire directly or indirectly any shares of any class or series of its capital stock, or encumber any material assets instrument or security which consists of or includes a right to acquire such shares (other than repurchases of restricted stock at cost pursuant to agreements outstanding on the date of this Agreement or entered into after the date of this Agreement in compliance with the provisions hereof);
(c) neither the Company nor any Company Subsidiary shall (i) incur or modify any indebtedness or other liability, other than in the ordinary and usual course of business and consistent with past practice, practice or incur or modify any material indebtedness or other liability; or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock;
(d) neither the Company nor any of its Subsidiaries shall: (i) grant any increase in the compensation payable or to become payable by the Company or any of its Subsidiaries to any of its employees; (ii) (A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under any existing, bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company or any its Subsidiaries;
(e) neither the Company nor any of its Subsidiaries shall modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims thereunderclaims, except in the ordinary course of business and consistent with past practice;
(fd) neither the Company nor any of its Subsidiaries Company Subsidiary shall permit any material insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to Parent;
(g) neither the Company nor any of its Subsidiaries shall: (i) incur or assume any long-term debt debt, or except in the ordinary course of business, incur or assume any short-term indebtednessindebtedness in amounts not consistent with past practice; (ii) modify the terms of any indebtedness or other liability, other than modifications of short term debt in the ordinary and usual course of business and consistent with past practice; (iii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other personPerson, except as described in Section 6.1(d) of the Company Disclosure Letter as being in the ordinary course of business and consistent with past practice; (iiiiv) make any loansloan, advances advance or capital contributions contribution to, or investments investment in, any other person Person (other than to or in wholly owned Subsidiaries of the Company or customary loans or advances to employees in accordance with past practiceSubsidiaries); or (ivv) enter into any material commitment or transaction (including, but not limited to, including any borrowing, capital expenditure or purchase, sale or lease of assets or real estate)) with a value of $250,000 for any individual commitment or transaction or an aggregate value of $1,500,000 for all such commitments or transactions;
(he) neither the Company nor any Company Subsidiary shall transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any assets which are material, individually or in the aggregate, to the business of the Company and the Company Subsidiaries, taken as a whole, other than in the ordinary and usual course of business and consistent with past practice;
(f) except as otherwise specifically provided in this Agreement or in the Schedule 14D-9, neither the Company nor any Company Subsidiary shall make or offer to make any change in the compensation payable or to become payable to any of its Subsidiaries shall change officers, directors, employees, agents or consultants (other than normal recurring increases in wages to employees who are not officers or directors or Affiliates in the ordinary course of business and consistent with past practice) or to Persons providing management services, or enter into or amend any employment, severance, consulting, termination or other agreement or employee benefit plan or make any loans to any of its officers, directors, employees, Affiliates, agents or consultants or make any change in its existing borrowing or lending arrangements for or on behalf of any of such Persons pursuant to a Company Benefit Plan or otherwise;
(g) except as otherwise specifically contemplated by this Agreement or by the accounting methods used Schedule 14D-9 or as specifically set forth in Section 6.1(g) of the Company Disclosure Letter, neither the Company nor any Company Subsidiary shall (i) pay or make any accrual or arrangement for payment of any pension, retirement allowance or other employee benefit pursuant to any existing plan, agreement or arrangement to any officer, director, employee or Affiliate (except payments and accruals made in the ordinary course of business consistent with past practice), (ii) pay, offer to pay or agree to pay or make any accrual or arrangement for payment to any officers, directors, employees or Affiliates of the Company or any Company Subsidiary of any amount relating to unused vacation days (except payments and accruals made in the ordinary course of business consistent with past practice), (iii) adopt or pay, grant, issue, accelerate or accrue salary or other payments or benefits pursuant to any pension, profit-sharing, bonus, extra compensation, incentive, deferred compensation, stock purchase, stock option, stock appreciation right, group insurance, severance pay, retirement or other employee benefit plan, agreement or arrangement, or any employment or consulting agreement with or for the benefit of any director, officer, employee, agent or consultant, whether past or present, or amend in any material respect any such existing plan, agreement or arrangement in a manner inconsistent with the foregoing;
(h) except as may be required by it unless applicable law, neither the Company nor any Company Subsidiary shall enter into, adopt or amend or terminate any bonus, special remuneration, profit sharing, compensation, severance, termination, stock option, stock appreciation right, restricted stock, performance unit, stock equivalent, stock purchase agreement, pension, retirement, deferred compensation, employment, health, life, or disability insurance, dependent care, severance or other employee benefit plan, agreement, trust, fund or other arrangement for the benefit or welfare of any director, officer, employee or consultant in any manner;
(i) except as set forth in Section 6.1(i) of the Company Disclosure Letter, neither the Company nor any Company Subsidiary shall exercise its discretion or otherwise voluntarily accelerate the vesting of any Company Option as a result of the Merger or any other "change in control" of the Company (as defined in the Company Benefit Plans) or otherwise;
(j) neither the Company nor any Company Subsidiary shall revalue in any material respect any of its assets, including writing down the value of inventory or writing-off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by GAAP;
(ik) neither the Company nor any Company Subsidiary shall settle or compromise any pending or threatened suit, action or claim that (i) relates to the transactions contemplated hereby or (ii) the settlement or compromise of its which would involves more than $250,000 and does not obligate the Company to take or refrain from taking any action other than the payment of such sum or that would otherwise be material to the Company and the Company Subsidiaries, taking the Company together with the Company Subsidiaries as a whole, or that relates to any Intellectual Property matters;
(l) neither the Company nor any Company Subsidiary shall pay, purchase, discharge or satisfy any of its claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of any such business and consistent with past practice, of claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (Financial Statements or incurred, after the notes thereto) date of this Agreement, in the Company and its consolidated Subsidiariesordinary course of business;
(jm) neither the Company nor any of its Subsidiaries Company Subsidiary will adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries Company Subsidiary (other than the Merger);
(kn) neither the Company nor any Company Subsidiary will (i) change any of its Subsidiaries the accounting methods used by it unless required by GAAP or (ii) make any material election relating to Taxes, change any material election relating to Taxes already made, adopt any material accounting method relating to Taxes, change any material accounting method relating to Taxes unless required by GAAP or change in the Internal Revenue Code or the regulations under the Internal Revenue Code, enter into any closing agreement relating to Taxes, settle any claim or assessment relating to Taxes or consent to any claim or assessment relating to Taxes or any waiver of the statute of limitations for any such claim or assessment;
(o) neither the Company nor any Company Subsidiary will take, or agree to commit to take, any action that could or would make be reasonably likely to result in any representation or warranty of the Company contained herein, conditions to the Offer set forth in Appendix A to this Agreement or any of the case of any representation or warranty conditions set forth in Article 7 not qualified by materiality, materially inaccurate or, in the case of any other representation or warranty, inaccurate in any respect atbeing satisfied, or as that would materially impair the ability of any time prior tothe Company, Parent, Purchaser or the Effective Timeholders of Shares to consummate the Offer or the Merger in accordance with the terms thereof or materially delay such consummation; and
(lp) neither the Company nor any of its Subsidiaries Company Subsidiary will enter into an agreement, contract, commitment commitment, understanding or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.
Appears in 1 contract
Interim Operations of the Company. The Company covenants and agrees that, except (i) as expressly contemplated by this Agreement, (ii) as set forth in Section 5.1 of the Company's Company Disclosure Schedule Schedule, as required by Law, or (iii) as agreed unless Parent shall otherwise consent in writing by Parent(which consent shall not be unreasonably withheld or delayed), after the date hereofof this Agreement, and prior to the time earlier of (x) the designees termination of this Agreement in accordance with Article VIII and (y) the Purchaser have been elected to, and shall constitute a majority of, the Board of Directors of the Company pursuant to Section 1.3 (the "Appointment Date"):Acceptance Time:
(a) the business of the Company and its Subsidiaries shall be conducted only in the ordinary course of business consistent with past practice, and usual course and, to the extent consistent therewith, each of the Company and its Subsidiaries shall use its commercially reasonable best efforts to preserve its present business organization intact intact, to keep available the services of its current officers, key employees and key consultants, and to maintain its existing goodwill and relations with customers, suppliers, employees, creditors contractors, distributors and others having significant business partnersdealings with it;
(b) the Company will shall not, (i) directly or indirectly, (i) except for the issuance of Shares upon the exercise of the Options outstanding on the date of this Agreement pursuant to the terms of such Options or upon the satisfaction of the conditions set forth in any Restricted Stock Unit, issue, sell, transfer or pledge or agree to sellmodify, transfer transfer, dispose of, encumber or pledge any shares of the Shares, Preferred Stock or capital stock of the Company, securities convertible into or exchangeable for, or options, warrants or rights of any kind to acquire any shares of its Subsidiaries beneficially owned by itsuch capital stock or other equity interests or any other ownership interest; (ii) amend or otherwise change its Articles Certificate of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine combine, reclassify, subdivide or reclassify the outstanding Shares redeem, or Preferred Stock purchase or any outstanding capital stock of any of the Subsidiaries of the Company;
(c) neither the Company nor otherwise acquire, directly or indirectly, any of its Subsidiaries shall: capital stock or other equity interests; or (iiv) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire any shares of, capital stock of any class of the Company or its Subsidiaries, other than shares reserved for issuance on the date hereof pursuant to the exercise of Options outstanding on the date hereof; (iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any material assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any material indebtedness or other liability; or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock;
(dc) neither the Company nor any of its Subsidiaries shall: (i) grant any increase in the compensation payable or to become payable by the Company or any of its Subsidiaries to any of its employees; (ii) (A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under any existing, bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company or any its Subsidiaries;
(e) neither the Company nor any of its Subsidiaries shall modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims thereunder;
(f) neither the Company nor any of its Subsidiaries shall permit any material insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to Parent;
(g) neither the Company nor any of its Subsidiaries shall: will not (i) incur or assume any long-term indebtedness for borrowed money or issue any debt or any short-term indebtednesssecurities in respect of borrowed money; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person, except in the ordinary course of business and consistent with past practicePerson; (iii) make any loans, advances or capital contributions to, or investments in, any other person Person; (iv) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or any equity interest therein; (v) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any of its assets or properties, in each case other than in the ordinary course of business consistent with past practice or sales or dispositions of assets of less than $1,000,000 in the aggregate;
(d) the Company shall not except in order to wholly owned Subsidiaries conform to the applicable provisions of Section 409A of the Code and related authority, (i) change the compensation or benefits payable or to become payable to any of its officers or directors, or in any material respect its employees, agents or consultants, except as required pursuant to applicable Law or Contracts in effect on the date of this Agreement and listed in Section 5.1(d) of the Company Disclosure Schedule and except as provided in the agreements set forth on Exhibit C; (ii) enter into, extend or customary amend any employment, collective bargaining, severance, consulting, termination or other agreement or employee benefit plan; or (iii) make any loans or advances to any of its officers, directors, employees, agents, consultants or affiliates or change its existing borrowing or lending arrangements for or on behalf of any of such persons pursuant to an employee benefit plan or otherwise; provided, however, that nothing in this Section 5.1(d) shall prevent the Company or its Subsidiaries from hiring new employees as non-officers or non-directors of the Company in accordance the ordinary course of business consistent with past practice so long as the amount of salaries, wages, bonuses and benefits provided to such new employees shall be in the ordinary course of business consistent with past practice with respect to similarly situated employees, and in any event not in excess of $150,000 per employee;
(e) the Company shall not (i) pay or arrange for payment of any pension, retirement allowance or other employee benefit pursuant to any existing plan, agreement or arrangement to any officer, director, employee or affiliate or pay or make any arrangement for payment to any officers, directors, employees or affiliates of the Company of any amount relating to unused vacation days, except payments and accruals made in the ordinary course of business consistent with past practice); (ii) except as may be required pursuant to the terms of a Benefit Plan as in effect as of the date of this Agreement, adopt or pay, grant, issue, accelerate or accrue salary or other payments or benefits pursuant to any pension, profit-sharing, bonus, extra compensation, incentive, deferred compensation, stock purchase, stock option, stock appreciation right, group insurance, severance pay, retirement or other employee benefit plan, agreement or arrangement, or any employment or consulting agreement with or for the benefit of any director, officer or employee, whether past or present, or (iviii) enter into amend in any material commitment respect any such existing plan, agreement or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate)arrangement;
(hf) neither except as provided by (d) above, the Company nor any of its Subsidiaries shall change any of the accounting methods used by it unless required by GAAP;
will not (i) neither modify, extend, amend or terminate any Material Contract to which the Company nor any of its Subsidiaries shall pay, discharge is a party or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company and its consolidated Subsidiaries;
(j) neither the Company nor any of its Subsidiaries will adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of by which the Company or any of its Subsidiaries properties or assets may be bound; (other than the Merger)ii) waive, release or assign any rights or claims under any of such Material Contracts; or (iii) enter into any Material Contract;
(kg) neither the Company nor shall not, except as necessary in the ordinary course of business consistent with past practice, grant or acquire, agree to grant to or acquire from any Person, or dispose of its Subsidiaries will takeor permit to lapse any rights to, any Intellectual Property, or disclose or agree to commit disclose to takeany Person, other than Representatives of Purchaser and Parent, any action that would make any representation trade secret or warranty of the Company contained herein, in the case of any representation or warranty not qualified by materiality, materially inaccurate or, in the case of any other representation or warranty, inaccurate in any respect at, or as of any time prior to, the Effective Time; and
(l) neither the Company nor any of its Subsidiaries will enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.confidential information;
Appears in 1 contract
Samples: Merger Agreement (Lifecell Corp)
Interim Operations of the Company. The Company covenants and agrees that, except (i) as expressly contemplated by this Agreement, (ii) as set forth in Section 5.1 prior to the earlier of the Company's Disclosure Schedule Appointment Date or the date, if any, on which this Agreement is earlier terminated pursuant to SECTION 8.1 (iiithe "TERMINATION DATE") as agreed in writing by Parent, after the date hereof, and prior to the time the designees of the Purchaser have been elected to, and shall constitute a majority of, the Board of Directors of the Company pursuant to Section 1.3 (the "Appointment Date")::
(a) the business of the Company and its each of the Subsidiaries shall be conducted only in the usual, regular and ordinary course and usual course andsubstantially in the same manner as heretofore conducted, to the extent consistent therewith, each of and the Company and its Subsidiaries each Company Subsidiary shall use its commercially reasonable best efforts to preserve its business organization intact in all material respects, keep available the services of its current executive officers and key employees and maintain its existing relations with franchisees, customers, suppliers, employeescreditors, creditors business partners and others having business partnersdealings with it, to the end that the goodwill and ongoing business of each of them shall be materially unimpaired at the Effective Time;
(b) the Company will not, directly or indirectly, (i) sell, transfer or pledge or agree to sell, transfer or pledge any of the Shares, Preferred Stock or capital stock of any of its Subsidiaries beneficially owned by it; (ii) amend its Articles of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares or Preferred Stock or any outstanding capital stock of any of the Subsidiaries of the Company;
(c) neither the Company nor any of its Subsidiaries Company Subsidiary shall: (i) declareamend any of the Company Organizational Documents other than as set forth in SECTION 2.4, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, transfer, pledge, dispose of or encumber any additional shares ofof any class or series of its capital stock or Voting Debt, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire acquire, any shares of, capital stock of any class or series of the Company its capital stock or its Subsidiariesany Voting Debt, other than shares Shares reserved for issuance on the date hereof of this Agreement pursuant to the exercise of Company Stock Options and Warrants outstanding on the date hereof; of this Agreement, (iii) transferdeclare, leaseset aside or pay any dividend or other distribution payable in cash, licensestock or property with respect to any shares of any class or series of its capital stock, sell(iv) split, mortgage, pledge, dispose ofcombine or reclassify any shares of any class or series of its stock, or encumber (v) other than the deemed repurchase of Company Stock Options and Warrants in accordance with SECTION 3.4 of this Agreement, redeem, purchase or otherwise acquire directly or indirectly any material assets shares of any class or series of its capital stock, or any instrument or security which consists of or includes a right to acquire such shares;
(c) neither the Company nor any Company Subsidiary shall (i) incur or assume any Indebtedness or other Liability, other than in the ordinary and usual course of business and consistent with past practice, or incur or (ii) modify the terms of any material indebtedness Indebtedness or other liability; Liability, other than modifications of short term debt in the ordinary and usual course of business and consistent with past practice, or (iviii) redeemmodify, purchase amend or otherwise acquire directly or indirectly terminate any of its capital stockmaterial Company Agreement (including any Company Agreement listed on SECTION 4.22 OF THE COMPANY DISCLOSURE SCHEDULE) or waive, release or assign any material rights or claims, except in the ordinary course of business and consistent with past practice;
(d) neither the Company nor any of its Subsidiaries shall: (i) grant any increase in the compensation payable or to become payable by the Company or any of its Subsidiaries to any of its employees; (ii) (A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under any existing, bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company or any its Subsidiaries;
(e) neither the Company nor any of its Subsidiaries Subsidiary shall modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims thereunder;
(f) neither the Company nor any of its Subsidiaries shall permit any material insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to Parent;
(g) neither the Company nor any of its Subsidiaries shall: (i) incur or assume any long-term debt or any short-term indebtedness; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other personPerson, except as described in SECTION 6.1(d) OF THE COMPANY DISCLOSURE SCHEDULE as being in the ordinary course of business and consistent with past practice; , (iiii) make any loansloan, advances advance or capital contributions contribution to, or investments investment in, any other person Person (other than to or in wholly owned Subsidiaries of the Company or customary loans or advances to employees in accordance with past practiceSubsidiaries); , or (ivii) enter into any material commitment or transaction (including, but not limited to, including any borrowing, capital expenditure or purchase, sale or lease of assets or real estate);
(he) neither the Company nor any Company Subsidiary shall transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any assets other than in the ordinary and usual course of business and consistent with past practice;
(f) except as otherwise specifically provided in this Agreement or in the Schedule 14D-9, make or offer to make any change in the compensation payable or to become payable to any of its Subsidiaries shall change officers, directors, employees, agents or consultants (other than normal recurring increases in wages to employees who are not officers or directors or Affiliates in the ordinary course of business and consistent with past practice) or to Persons providing management services, or enter into or amend any employment, severance, consulting, termination or other agreement or employee benefit plan or make any loans to any of its officers, directors, employees, Affiliates, agents or consultants or make any change in its existing borrowing or lending arrangements for or on behalf of any of such Persons pursuant to an employee benefit plan or otherwise; or
(g) except as otherwise specifically contemplated by this Agreement or by the accounting methods used by it unless Schedule 14D-9 or as specifically set forth in SECTION 6.1(g) OF THE COMPANY DISCLOSURE SCHEDULE, (i) pay or make any accrual or arrangement for payment of any pension, retirement allowance or other employee benefit pursuant to any existing plan, agreement or arrangement to any officer, director, employee or Affiliate, (ii) pay, offer to pay or agree to pay or make any accrual or arrangement for payment to any officers, directors, employees or Affiliates of the Company or any Company Subsidiary of any amount relating to unused vacation days (except payments and accruals made in the ordinary course of business consistent with past practice), or (iii) adopt or pay, grant, issue, accelerate or accrue salary or other payments or benefits pursuant to any pension, profit-sharing, bonus, extra compensation, incentive, deferred compensation, stock purchase, stock option, stock appreciation right, group insurance, severance pay, retirement or other employee benefit plan, agreement or arrangement, or any employment or consulting agreement with or for the benefit of any director, officer, employee, agent or consultant, whether past or present, or amend in any material respect any such existing plan, agreement or arrangement in a manner inconsistent with the foregoing;
(h) except as may be required by GAAPApplicable Law or this Agreement, enter into, adopt or amend or terminate any bonus, special remuneration, profit sharing, compensation, severance, termination, stock option, stock appreciation right, restricted stock, performance unit, stock equivalent, stock purchase agreement, pension, retirement, deferred compensation, employment, health, life, or disability insurance, dependent care, severance or other employee benefit plan, agreement, trust, fund or other arrangement for the benefit or welfare of any director, officer, employee or consultant in any manner;
(i) neither the Company nor any Company Subsidiary shall exercise its discretion or otherwise voluntarily accelerate the vesting of any Company Stock Option as a result of the Merger, any other "change in control" of the Company (as defined in the Company Benefit Plans) or otherwise;
(j) neither the Company nor any Company Subsidiary shall revalue in any material respect any of its assets, including writing down the value of inventory or writing-off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by generally accepted accounting principles;
(k) neither the Company nor any Company Subsidiary shall permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to and the prior consent of Parent;
(l) neither the Company nor any Company Subsidiary shall enter into any Company Agreement or transaction relating to the purchase of assets other than in the ordinary course of business and consistent with prior practices;
(m) neither the Company nor any Company Subsidiary shall settle or compromise any pending or threatened suit, action or claim that (i) relates to the Transactions or (ii) the settlement or compromise of which would involves more than fifty thousand dollars ($50,000) or that would otherwise be material to the Company and the Company Subsidiaries, taking the Company together with the Company Subsidiaries as a whole, or that relates to any Intellectual Property matters;
(n) neither the Company nor any Company Subsidiary shall pay, purchase, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise)of its Liabilities, other than the payment, discharge or satisfaction in the ordinary course of any such claimsbusiness and consistent with past practice, liabilities or obligations of Liabilities reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company and its consolidated SubsidiariesFinancial Statements;
(jo) neither the Company nor any of its Subsidiaries Company Subsidiary will adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries Company Subsidiary (other than the Merger);
(kp) neither the Company nor any Company Subsidiary will (i) change any of the accounting methods used by it unless required by GAAP, (ii) change any of its Subsidiaries policies, procedures or timing of the collection of accounts receivable in accordance with its historical practices, or (iii) make any material election relating to Taxes, change any material election relating to Taxes already made, adopt any material accounting method relating to Taxes, change any material accounting method relating to Taxes unless required by GAAP or change in the Internal Revenue Code or the regulations under the Internal Revenue Code, enter into any closing agreement relating to Taxes, settle any claim or assessment relating to Taxes or consent to any claim or assessment relating to Taxes or any waiver of the statute of limitations for any such claim or assessment;
(q) except as otherwise permitted by SECTION 6.4, neither the Company nor any Company Subsidiary will take, or agree to commit to take, any action that could or would be reasonably likely to result in any of the conditions to the Offer set forth in APPENDIX A to this Agreement or any of the conditions set forth in ARTICLE VII not being satisfied, or would make any representation or warranty of the Company contained herein, in the case of any representation or warranty not qualified by materiality, materially inaccurate or, in the case of any other representation or warranty, this Agreement inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company or the holders of Shares to consummate the Offer or the Merger in accordance with the terms thereof or materially delay such consummation; and
(lr) neither the Company nor any of its Subsidiaries Company Subsidiary will enter into an any agreement, contract, commitment commitment, understanding or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoingforegoing (and the Company shall use all reasonable efforts not to take any action that would make any of the representations or warranties of the Company contained in this Agreement untrue or incorrect).
Appears in 1 contract
Interim Operations of the Company. The Company covenants --------------------------------- and agrees thatthat prior to the Effective Time, except (i) as expressly contemplated by this Agreement, (ii) as set forth in Section 5.1 6.1 of the Company's Company Disclosure Schedule Letter or (iii) as agreed in writing by ParentParent (which agreement shall not be unreasonably withheld or delayed), after the date hereof, and prior to the time the designees of the Purchaser have been elected to, and shall constitute a majority of, the Board of Directors of the Company pursuant to Section 1.3 (the "Appointment Date")::
(a) the business of the Company and its Subsidiaries each Company Subsidiary shall be conducted only in the usual, regular and ordinary course and usual course andsubstantially in the same manner as heretofore conducted, to the extent consistent therewith, each of and the Company and its Subsidiaries each Company Subsidiary shall use its commercially reasonable best efforts to preserve its business organization intact intact, keep available the services of its current officers and employees and maintain its existing relations with franchisees, customers, suppliers, employeescreditors, creditors business partners and others having business partnersdealings with it, to the end that the goodwill and ongoing business of each of them shall be unimpaired at the Effective Time;
(b) the Company will not, directly or indirectly, (i) sell, transfer or pledge or agree to sell, transfer or pledge any of the Shares, Preferred Stock or capital stock of any of its Subsidiaries beneficially owned by it; (ii) amend its Articles of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares or Preferred Stock or any outstanding capital stock of any of the Subsidiaries of the Company;
(c) neither the Company nor any of its Subsidiaries Company Subsidiary shall: (i) declareamend its certificate of incorporation or bylaws or similar organizational documents, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, transfer, pledge, dispose of or encumber any additional shares ofof any class or series of its capital stock or Voting Debt, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire acquire, any shares of, capital stock of any class or series of the Company its capital stock or its Subsidiariesany Voting Debt, other than shares of Company Common Stock reserved for issuance on the date hereof of this Agreement pursuant to the exercise of Company Options and purchase rights under the Company ESPP outstanding on the date hereof; of this Agreement, (iii) transferdeclare, lease, license, sell, mortgage, pledge, dispose of, set aside or encumber pay any material assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any material indebtedness dividend or other liability; distribution payable in cash, stock or property with respect to any shares of any class or series of its capital stock, (iv) split, combine or reclassify any shares of any class or series of its stock or (ivv) redeem, purchase or otherwise acquire directly or indirectly any shares of any class or series of its capital stock, or any instrument or security which consists of or includes a right to acquire such shares other than share revesting arrangements entitling the Company to purchase shares from employees or consultants at their cost;
(dc) neither the Company nor any of its Subsidiaries shall: Company Subsidiary shall (i) grant incur or modify any increase indebtedness or other liability, other than in the compensation payable ordinary course of business consistent with past practice or to become payable by the Company or any of its Subsidiaries to any of its employees; (ii) (A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under any existing, bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company or any its Subsidiaries;
(e) neither the Company nor any of its Subsidiaries shall modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims thereunderclaims, except in the ordinary course of business consistent with past practice;
(fd) neither the Company nor any of its Subsidiaries Company Subsidiary shall permit any material insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to Parent;
(g) neither the Company nor any of its Subsidiaries shall: (i) incur or assume any long-term debt debt, or except in the ordinary course of business, incur or assume any short-term indebtednessindebtedness in amounts not consistent with past practice; (ii) modify the terms of any indebtedness or other liability, other than modifications of short term debt in the ordinary course of business consistent with past practice; (iii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person, except Person in the ordinary course of business and consistent with past practice; (iiiiv) make any loans, advances or capital contributions to, or investments in, any other person Person (other than to or in wholly owned Subsidiaries of the Company or customary loans or advances to employees in accordance with past practiceSubsidiaries); or (ivv) enter into any material commitment or transaction (including, but not limited to, including any borrowing, capital expenditure or purchase, sale or lease of assets or real estate);
(e) neither the Company nor any Company Subsidiary shall transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any assets other than in the ordinary course of business consistent with past practice; or
(f) neither the Company nor any Company Subsidiary shall make or offer to make any change in the compensation payable or to become payable to any of its officers, directors, employees, agents or consultants (other than normal recurring increases in wages to employees who are not officers or directors or Affiliates in the ordinary course of business consistent with past practice) or to Persons providing management services, or enter into or amend any employment, severance, consulting, termination or other agreement or employee benefit plan or make any loans to any of its officers, directors, employees, Affiliates, agents or consultants or make any change in its existing borrowing or lending arrangements for or on behalf of any of such Persons pursuant to a Company Benefit Plan or otherwise;
(g) neither the Company nor any Company Subsidiary shall (i) pay or make any accrual or arrangement for payment of any pension, retirement allowance or other employee benefit pursuant to any existing plan, agreement or arrangement to any officer, director, employee or Affiliate, (ii) pay, offer to pay or agree to pay or make any accrual or arrangement for payment to any officers, directors, employees or Affiliates of the Company or any Company Subsidiary of any amount relating to unused vacation days (except payments and accruals made in the ordinary course of business consistent with past practice), (iii) adopt or pay, grant, issue, accelerate or accrue salary or other payments or benefits pursuant to any pension, profit-sharing, bonus, extra compensation, incentive, deferred compensation, stock purchase, stock option, stock appreciation right, group insurance, severance pay, retirement or other employee benefit plan, agreement or arrangement, or any employment or consulting agreement with or for the benefit of any director, officer, employee, agent or consultant, whether past or present, or amend in any material respect any such existing plan, agreement or arrangement in a manner inconsistent with the foregoing;
(h) neither the Company nor any Company Subsidiary shall permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to and the prior consent of its Subsidiaries shall change any Parent, except policies providing coverage for losses not in excess of the accounting methods used by it unless required by GAAP$50,000;
(i) neither the Company nor any Company Subsidiary shall enter into any contract or transaction relating to the purchase of assets other than in the ordinary course of business consistent with past practice;
(j) neither the Company nor any Company Subsidiary shall revalue in any material respect any of its assets, including writing down the value of inventory or writing-off notes or accounts receivable, other than in the ordinary course of business consistent with past practice or as required by a change in GAAP occurring after the date of this Agreement;
(k) neither the Company nor any Company Subsidiary shall settle or compromise any pending or threatened suit, action or claim that (i) relates to the Transactions contemplated hereby or (ii) the settlement or compromise of which would involve more than $50,000 and does not obligate the Company to take or refrain from taking any action other than the payment of such sum or that would otherwise be material to the Company and the Company Subsidiaries, considering the Company together with the Company Subsidiaries as a whole, or that relates to any matters concerning Company Intellectual Property;
(l) neither the Company nor any Company Subsidiary shall pay, purchase, discharge or satisfy any of its claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction satisfaction, in the ordinary course of any such business consistent with past practice, of claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company and its consolidated SubsidiariesFinancial Statements;
(jm) neither the Company nor any of its Subsidiaries Company Subsidiary will adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries Company Subsidiary (other than the Merger);
(kn) neither the Company nor any Company Subsidiary will (i) change any of its Subsidiaries the accounting methods used by it unless required by a change in GAAP occurring after the date of this Agreement or (ii) make any material election relating to Taxes, change any material election relating to Taxes already made, adopt any material accounting method relating to Taxes, change any material accounting method relating to Taxes unless required by a change in GAAP or change in the Code or the regulations under the Code occurring after the date of this Agreement, enter into any closing agreement relating to Taxes, settle any claim or assessment relating to Taxes or consent to any claim or assessment relating to Taxes or any waiver of the statute of limitations for any such claim or assessment;
(o) neither the Company nor any Company Subsidiary will take, or agree to commit to take, any action that could or would be reasonably expected to result in any of the conditions set forth in Article 8 not being satisfied, or would make any representation or warranty of the Company contained herein, in the case of any representation or warranty not qualified by materiality, materially inaccurate or, in the case of any other representation or warranty, this Agreement inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company, Parent or the Merger Sub to consummate the Merger in accordance with the terms thereof or materially delay such consummation; and
(lp) neither the Company nor any of its Subsidiaries will Company Subsidiary shall enter into an any agreement, contract, commitment commitment, understanding or arrangement with any officer or director of the Company or any Company Subsidiary with respect to any property, real or personal, tangible or intangible, including inventions, patents, trademarks or trade names, used in or pertaining to the business of the Company or any Company Subsidiary or modify, amend or terminate any such existing agreement, contract, commitment, understanding or arrangement; and
(q) neither the Company nor any Company Subsidiary will enter into any agreement, contract, commitment, understanding or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.
Appears in 1 contract
Samples: Merger Agreement (Mediaplex Inc)
Interim Operations of the Company. The Company covenants and agrees thatthat prior to the Effective Time, except (i) if consistent with past practice, (ii) as expressly contemplated by this Agreement, (iiiii) as set forth in Section 5.1 6.1 of the Company's Company Disclosure Schedule Letter or (iiiiv) as agreed in writing by ParentParent (which agreement shall not be unreasonably withheld), after the date hereof, and prior to the time the designees of the Purchaser have been elected to, and shall constitute a majority of, the Board of Directors of the Company pursuant to Section 1.3 (the "Appointment Date")::
(a) the business of the Company and its Subsidiaries of each Company Subsidiary shall be conducted only in the usual, regular and ordinary course and usual course andsubstantially in the same manner as heretofore conducted, to the extent consistent therewith, each of and the Company and its Subsidiaries each Company Subsidiary shall use its commercially reasonable best efforts to preserve its business organization intact intact, keep available the services of its current officers and employees and maintain its existing relations with licensors, customers, suppliers, employeesdistributors, creditors creditors, business partners and others having business partnersdealings with it, to the end that their respective goodwill and ongoing business shall be unimpaired at the Effective Time;
(b) the Company will not, directly or indirectly, (i) sell, transfer or pledge or agree to sell, transfer or pledge any of the Shares, Preferred Stock or capital stock of any of its Subsidiaries beneficially owned by it; (ii) amend its Articles of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares or Preferred Stock or any outstanding capital stock of any of the Subsidiaries of the Company;
(c) neither the Company nor any of its Subsidiaries Company Subsidiary shall: (i) declareamend its certificate of incorporation or bylaws or similar organizational documents, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, transfer, pledge, dispose of or encumber any additional shares ofof any class or series of its capital stock or Voting Debt, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire acquire, any shares of, capital stock of any class or series of the Company its capital stock or its Subsidiariesany Voting Debt, other than (x) the issuance of shares of Company Common Stock reserved for issuance on the date hereof of this Agreement pursuant to the exercise of Company Options and Purchase Rights under the Company ESPP outstanding on the date hereof; of this Agreement or (y) the issuance of Company Options to new non-officer employees consistent with past practices in the ordinary course of business, (iii) transferdeclare, lease, license, sell, mortgage, pledge, dispose of, set aside or encumber pay any material assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any material indebtedness dividend or other liability; distribution payable in cash, stock or property with respect to any shares of any class or series of its capital stock, (iv) split, combine or reclassify any shares of any class or series of its capital stock or (ivv) redeem, purchase or otherwise acquire directly or indirectly any shares of any class or series of its capital stock;
, or enter into any instrument or security which consists of or includes a right to acquire such shares, other than (d1) neither the acquisition shares of Company nor any Common Stock from holders of its Subsidiaries shall: (i) grant any increase Company Options in full or partial payment of the compensation payable exercise price or to become withholding taxes payable by such holder upon exercise of Company Options to the extent required under the terms of such Company Options as in effect on the date thereof; or (2) the repurchase of Restricted Stock from former employees, directors and consultants in connection with any termination of services to Company or any of its Subsidiaries to any of its employees; (ii) (A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under any existing, bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company or any its Subsidiaries;
(ec) neither adopt or implement any stockholder rights plan or, except as provided in Section 4.23, alter or further amend the Company nor any of its Subsidiaries shall modify, amend Rights Plan or terminate any of its material contracts or waive, release or assign any material rights or claims thereunderCompany Rights;
(f) neither the Company nor any of its Subsidiaries shall permit any material insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to Parent;
(g) neither the Company nor any of its Subsidiaries shall: (i) incur or assume any long-term debt or any short-term indebtedness; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person, except in the ordinary course of business and consistent with past practice; (iii) make any loans, advances or capital contributions to, or investments in, any other person (other than to wholly owned Subsidiaries of the Company or customary loans or advances to employees in accordance with past practice); or (iv) enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate);
(h) neither the Company nor any of its Subsidiaries shall change any of the accounting methods used by it unless required by GAAP;
(i) neither the Company nor any of its Subsidiaries shall pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company and its consolidated Subsidiaries;
(j) neither the Company nor any of its Subsidiaries will adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than the Merger);
(k) neither the Company nor any of its Subsidiaries will take, or agree to commit to take, any action that would make any representation or warranty of the Company contained herein, in the case of any representation or warranty not qualified by materiality, materially inaccurate or, in the case of any other representation or warranty, inaccurate in any respect at, or as of any time prior to, the Effective Time; and
(l) neither the Company nor any of its Subsidiaries will enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.
Appears in 1 contract
Samples: Merger Agreement (Valueclick Inc/Ca)
Interim Operations of the Company. The Company covenants and Seller agrees that, after the date hereof and prior to the Closing Date, except (i) as expressly contemplated by provided in this Agreement, or (ii) as set forth in Section 5.1 of the Company's Disclosure Schedule or (iii) as may be agreed in writing by Parent, after the date hereof, and prior to the time the designees of the Purchaser have been elected to, and shall constitute a majority of, the Board of Directors of the Company pursuant to Section 1.3 (the "Appointment Date"):Purchaser:
(a) the business of the Company and its Subsidiaries shall be conducted in the same manner as heretofore conducted and only in the ordinary course, and usual course andSeller shall use its best efforts and shall direct the managing director of the Company to use her best efforts to preserve the business organization of the Company, to keep available the extent consistent therewith, each services of the current officers and employees of the Company and its Subsidiaries shall use its commercially reasonable best efforts to preserve its business organization intact and maintain its the existing relations with customers, suppliers, employeescreditors, creditors business partners and others having business partnersdealings with the Company, to the end that the goodwill and ongoing business of the Company shall be unimpaired at the Closing Date;
(b) the Company will shall not, directly or indirectly, : (i) sell, transfer or pledge or agree to sell, transfer or pledge any of the Shares, Preferred Stock or capital stock of any of its Subsidiaries beneficially owned by it; (ii) amend its Articles articles of Incorporation association or Bylaws by-laws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares or Preferred Stock or any outstanding capital stock of any of the Subsidiaries of the Company;
(c) neither the Company nor any of its Subsidiaries shall: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, transfer, pledge, dispose of or encumber any additional shares ofof any class or series of its capital, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire acquire, any shares of, capital stock of any class or series of the Company or its Subsidiariescapital, other than shares reserved for issuance on the date hereof pursuant to the exercise of Options outstanding on the date hereof; (iii) transferdeclare, lease, license, sell, mortgage, pledge, dispose of, set aside or encumber pay any material assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any material indebtedness dividend or other liabilitydistribution payable in cash, stock or property with respect to any shares of any class or series of its capital; (iv) split, combine or reclassify any shares of any class or series of its capital; or (ivv) redeem, purchase or otherwise acquire directly or indirectly any shares of any class or series of its capital stockcapital, or any instrument or security which consists of or includes a right to acquire such shares;
(c) the Company shall not organize any new subsidiary or acquire any capital shares or other equity securities, or equity or ownership interest in the business, of any other Person;
d) neither the Company nor any of its Subsidiaries shall: (i) grant any increase in the compensation payable or to become payable by the Company or any of its Subsidiaries to any of its employees; (ii) (A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under any existing, bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company or any its Subsidiaries;
(e) neither the Company nor any of its Subsidiaries shall not modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims thereunderclaims, except in the ordinary course of business and consistent with past practice;
(fe) neither the Company nor any of its Subsidiaries shall permit any material insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to Parent;
(g) neither the Company nor any of its Subsidiaries shallnot: (i) 1. incur or assume any long-term debt debt, or any except in the ordinary course of business, incur or assume short-term indebtednessIndebtedness exceeding SEK 100,000 in the aggregate from the date hereof until the Closing; (ii) 2. pay, repay, discharge, purchase, repurchase or satisfy any Indebtedness issued or guaranteed by the Company, except as required by the terms thereof; 3. modify the terms of any Indebtedness or other liability; 4. assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other personPerson, except unless in the ordinary course of business and consistent with past practice; (iii) 5. make any loans, advances or capital contributions to, or investments in, any other person (other than to wholly owned Subsidiaries of the Company or customary loans or advances to employees in accordance with past practice)Person; or (iv) 6. enter into any material commitment or transaction (including, but not limited to, including any borrowing, capital expenditure or purchase, sale or lease of assets or real estate);
(h) neither ; 7. write down the Company nor value of any inventory or write off as uncollectible any notes or accounts receivable, or 8. change any of its Subsidiaries banking or safe deposit arrangements;
f) the Company shall not lease, license, mortgage, pledge or encumber any assets other than in the ordinary and usual course of business and consistent with past practices, or transfer, sell or dispose of any assets other than in the ordinary and usual course of business and consistent with past practice or dispose of or permit to lapse any rights to any Intellectual Property;
g) the Company shall duly file all Tax Returns that are required to be filed and shall duly pay or cause to be duly paid in full or make or cause to be made provision in accordance with Swedish accounting principles (or there has been paid or provision has been made on their behalf) for the payment of all Taxes for all periods or portions thereof ending on or before the Closing Date. All such Tax Returns shall be correct and complete and accurately reflect all liability for Taxes for the periods covered thereby;
h) the Company shall not make any change in the compensation payable or to become payable to any of its officers, directors, employees, agents or consultants or to Persons providing management services, or enter into or amend any employment, collective bargaining, severance, consulting, termination or other agreement with, or employee benefit plan for, or make any loan or advance to, any of its officers, directors, employees, Affiliates, agents or consultants or make any change in its existing borrowing or lending arrangements for or on behalf of any of such Persons pursuant to an employee benefit plan or otherwise, other than travel and entertainment advances made in the accounting methods used by it unless required by GAAPordinary course of business and consistent with past practice;
i) the Company shall not (i) neither pay or make any accrual or arrangement for payment of any pension, retirement allowance or other employee benefit pursuant to any existing plan, agreement or arrangement to any officer, director, employee or Affiliate or pay or agree to pay or make any accrual or arrangement for payment to any officer, director, employee or Affiliate of any amount relating to unused vacation days, except to the extent the Company nor is unconditionally obligated to do so on the date hereof, (ii) adopt or pay, grant, issue, accelerate or accrue salary or other payments or benefits pursuant to any pension, profit-sharing, bonus, extra compensation, incentive, deferred compensation, stock purchase, stock option, stock appreciation right, group insurance, severance pay, retirement or other employee benefit plan, agreement or arrangement, or any employment or consulting agreement with or for the benefit of its Subsidiaries any director, officer, employee, agent or consultant, whether past or present, except to the extent the Company is unconditionally obligated to do so on the date hereof, or (iii) amend in any material respect any such existing plan, agreement or arrangement in a manner inconsistent with the foregoing;
j) the Company shall not permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to Purchaser;
k) the Company shall not enter into any contract or transaction relating to the purchase of assets other than in the ordinary course of business and consistent with past practice;
l) the Company shall not pay, repurchase, discharge or satisfy any of its claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of any such business and consistent with past practice, or claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (Financial Statements or incurred since the notes theretoBalance Sheet Date in the ordinary course of business;
m) of the Company and its consolidated Subsidiaries;
(j) neither the Company nor any of its Subsidiaries will shall not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company;
n) the Company shall not (i) change any of the accounting methods used by it unless required by Swedish accounting principles, (ii) make any election relating to Taxes, change any election relating to Taxes already made, adopt any accounting method relating to Taxes, change any accounting method relating to Taxes unless required by Swedish accounting principles, or (iii) enter into any closing agreement relating to Taxes, settle any claim or assessment relating to Taxes or consent to any claim or assessment relating to Taxes or any waiver of its Subsidiaries (other than the Merger)statute of limitations for any such claim or assessment;
(ko) neither the Company nor any of its Subsidiaries will shall not take, or agree to or commit to take, any action that would or is reasonably likely to result in any of the conditions to the Closing set forth in Article VI not being satisfied, or would make any representation or warranty of the Company Seller contained herein, in the case of any representation or warranty not qualified by materiality, materially inaccurate or, in the case of any other representation or warranty, herein inaccurate in any respect at, or as of any time prior to, the Effective TimeClosing Date, or that would materially impair the ability of the Purchaser or Sellers to consummate the Closing in accordance with the terms hereof or materially delay such consummation; and
(lp) neither the Company nor any of its Subsidiaries will Seller shall not enter into an any agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do do, any of the foregoing.
Appears in 1 contract
Interim Operations of the Company. The Company covenants and agrees thatthat prior to the Effective Time, except (i) as expressly contemplated by this Agreement, (ii) as set forth in Section 5.1 6.1 of the Company's Company Disclosure Schedule Letter or (iii) as agreed in writing by Parent, the Parent after the date hereof, and prior to hereof or (iv) for any actions taken by the time Company without the designees approval of the Purchaser have been elected to, and shall constitute a majority of, Special Committee or the Company's Board of Directors of the Company pursuant to Section 1.3 (the "Appointment Date"):Directors:
(a) the Company shall not take any actions that would cause it not to conduct its business of in the usual, regular and ordinary course and substantially in the same manner as heretofore conducted, and the Company and its Subsidiaries shall be conducted only in the ordinary and usual course and, to the extent consistent therewith, each of the Company and its Subsidiaries shall use its commercially reasonable best efforts to preserve its business organization intact and keep available the services of its current officers and employees and maintain its existing relations with customers, suppliers, employees, creditors and business partnersrelationships;
(b) the Company will shall not, directly or indirectly, : (i) sell, transfer or pledge or agree to sell, transfer or pledge any of the Shares, Preferred Stock or capital stock of any of its Subsidiaries beneficially owned by it; (ii) amend its Articles certificate of Incorporation incorporation or Bylaws by-laws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares or Preferred Stock or any outstanding capital stock of any of the Subsidiaries of the Company;
(c) neither the Company nor any of its Subsidiaries shall: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, transfer, pledge, dispose of or encumber any additional shares ofof any class or series of its capital stock, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire acquire, any shares of, capital stock of any class or series of the Company or its Subsidiaries, capital stock other than shares Shares reserved for issuance on the date hereof of this Agreement pursuant to the exercise of Company Options outstanding on the date hereof; of this Agreement, (iii) transferdeclare, leaseset aside or pay any dividend or other distribution payable in cash, licensestock or property with respect to any shares of any class or series of its capital stock, sell(iv) split, mortgagecombine or reclassify any shares of any class or series of its stock or (v) redeem, pledge, dispose ofpurchase or otherwise acquire directly or indirectly any shares of any class or series of its capital stock, or encumber any material assets instrument or security which consists of or includes a right to acquire such shares;
(c) the Company shall not: (i) incur or modify any indebtedness or other liability, other than in the ordinary and usual course of business and consistent with past practice, practice or incur or modify any material indebtedness or other liability; or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock;
(d) neither the Company nor any of its Subsidiaries shall: (i) grant any increase in the compensation payable or to become payable by the Company or any of its Subsidiaries to any of its employees; (ii) (A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under any existing, bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company or any its Subsidiaries;
(e) neither the Company nor any of its Subsidiaries shall modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims thereunderclaims, except in the ordinary course of business and consistent with past practice;
(fd) neither the Company nor any of its Subsidiaries shall permit any material insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to Parent;
(g) neither the Company nor any of its Subsidiaries shallnot: (i) incur or assume any long-term debt or any short-term indebtednessobligations under capital leases; (ii) modify the terms of any liability; (iii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other personPerson, except as described in Section 6.1(d) of the Company Disclosure Letter as being in the ordinary course of business and consistent with past practice; (iiiiv) make any loans, advances or capital contributions to, or investments in, any other person (other than to wholly owned Subsidiaries of the Company or customary loans or advances to employees in accordance with past practice)Person; or (ivv) enter into any material commitment or transaction (including, but not limited to, including any borrowing, capital expenditure or purchase, sale or lease of assets or real estate);
(he) neither the Company nor shall not transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any assets other than in the ordinary and usual course of business and consistent with past practice; or
(f) the Company shall not make or offer to make any change in the compensation payable or to become payable to any of its Subsidiaries shall change officers, directors, employees, agents or consultants (other than normal recurring increases in wages to employees who are not officers or directors or Affiliates in the ordinary course of business and consistent with past practice) or to Persons providing management services, or enter into or amend any employment, severance, consulting, termination or other agreement or employee benefit plan or make any loans to any of its officers, directors, employees, Affiliates, agents or consultants or make any change in its existing borrowing or lending arrangements for or on behalf of any of such Persons pursuant to an employee benefit plan or otherwise;
(g) the accounting methods used by Company shall not permit any insurance policy naming it unless required by GAAPas a beneficiary or a loss payable payee to be cancelled or terminated without notice to and the prior written consent of the Parent;
(h) the Company shall not enter into any contract or transaction relating to the purchase of assets other than in the ordinary course of business and consistent with prior practices;
(i) neither the Company nor any of its Subsidiaries shall not pay, purchase, discharge or satisfy any of its claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of any such business and consistent with past practice, of claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company and its consolidated SubsidiariesFinancial Statements;
(j) neither the Company nor any of its Subsidiaries will shall not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than the Merger);
(k) neither the Company nor shall not: (i) change any of its Subsidiaries will the accounting methods used by it unless required by GAAP or (ii) make any material election relating to Taxes, change any material election relating to Taxes already made, adopt any material accounting method relating to Taxes, change any material accounting method relating to Taxes unless required by GAAP or change in the Code or the regulations under the Code, enter into any closing agreement relating to Taxes, settle any claim or assessment relating to Taxes or consent to any claim or assessment relating to Taxes or any waiver of the statute of limitations for any such claim or assessment;
(l) the Company shall not take, or agree to commit to take, any action that could or would be reasonably likely to result in any of the conditions set forth in Article VII not being satisfied, or would make any representation or warranty of the Company contained herein, in the case of any representation or warranty not qualified by materiality, materially inaccurate or, in the case of any other representation or warranty, this Agreement inaccurate in any respect at, or as of any time prior to, the Effective Time, or that could be reasonably be expected to materially impair the ability of the Company, the Parent, Merger Sub or the holders of Shares to consummate the Merger in accordance with the terms hereof or materially delay such consummation; and
(lm) neither the Company nor any of its Subsidiaries will shall not enter into an any agreement, contract, commitment commitment, understanding or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.
Appears in 1 contract
Interim Operations of the Company. The Company covenants and agrees that, on or after the date hereof and prior to the Closing Date, except (i) as expressly provided in this Agreement or as required to consummate the transactions contemplated by this Agreement, (ii) as set forth in Section 5.1 of the Company's Disclosure Schedule 5.01 hereof, or (iii) as may be agreed in writing in advance by Parent, after the date hereof, and prior to the time the designees of the Purchaser have been elected to, and shall constitute a majority of, the Board of Directors of the Company pursuant to Section 1.3 (the "Appointment Date"):Purchaser:
(a) the The business of the Company and its Subsidiaries each Company Subsidiary shall be conducted only in the ordinary Ordinary Course of Business, and usual course and, to the extent consistent therewith, each of the Company and its Subsidiaries shall use its commercially reasonable best efforts to preserve its the business organization intact of the Company and each Company Subsidiary intact, keep available the services of the current officers and employees of the Company and each Company Subsidiary and maintain its the existing relations with franchisees, customers, suppliers, employeescreditors, creditors business partners and others having business partnersdealings with the Company or any Company Subsidiary, to the end that the goodwill and ongoing business of the Company and the Company Subsidiaries, taken as a whole, shall be unimpaired in any materially adverse manner at the Closing Date. Neither the Company nor any Company Subsidiary shall institute any new methods of manufacture, purchase, lease, management, accounting or operation or engage in any transaction or activity other than changes in the Ordinary Course of Business;
(b) the Company will not, directly or indirectly, (i) sell, transfer or pledge or agree to sell, transfer or pledge any of the Shares, Preferred Stock or capital stock of any of its Subsidiaries beneficially owned by it; (ii) amend its Articles of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares or Preferred Stock or any outstanding capital stock of any of the Subsidiaries of the Company;
(c) neither Neither the Company nor any of its Subsidiaries Company Subsidiary shall: (i) declareamend its Governing Documents, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, transfer, pledge, dispose of or encumber any additional shares ofof any class or series of its capital stock or Voting Debt, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire acquire, any shares of, capital stock of any class or series of the Company its capital stock or its Subsidiariesany Voting Debt, other than shares of Company Common Stock reserved for issuance on the date hereof pursuant to the exercise of Options Plan Options, in each case outstanding on the date hereof; , (iii) transferdeclare, lease, license, sell, mortgage, pledge, dispose of, set aside or encumber pay any material assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any material indebtedness dividend or other liabilitydistribution payable in cash, stock or property with respect to any shares of any class or series of its capital stock; (iv) split, combine or reclassify any shares of any class or series of its stock; or (ivv) redeem, purchase or otherwise acquire directly or indirectly any shares of any class or series of its capital stock, or any instrument or security which consists of or includes a right to acquire such shares;
(c) Neither the Company nor any Company Subsidiary shall organize any new Subsidiary or acquire any capital stock or other equity securities, or equity or ownership interest in the business, of any other Person;
(d) neither Neither the Company nor any of its Subsidiaries shall: Company Subsidiary shall (i) grant any increase in the compensation payable or to become payable by the Company or any of its Subsidiaries to any of its employees; (ii) (A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under any existing, bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company or any its Subsidiaries;
(e) neither the Company nor any of its Subsidiaries shall modify, amend or terminate any of its material contracts Material Contracts or waive, release or assign any material rights or claims thereunderclaims, except in the Ordinary Course of Business or (ii) enter into a Change of Control Agreement;
(fe) neither Neither the Company nor any of its Subsidiaries shall permit any material insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to Parent;
(g) neither the Company nor any of its Subsidiaries Subsidiary shall: (i) except as set forth in Schedule 5.01, (A) incur or assume any long-term debt Indebtedness, or any (B) except in the Ordinary Course of Business (including borrowings and issuances of letters of credit under the First Lien Credit Documents), incur or assume short-term indebtednessIndebtedness, in each case from the date hereof until the Closing; (ii) except in the Ordinary Course of Business, pay, repay, discharge, purchase, repurchase or satisfy any Indebtedness issued or guaranteed by the Company or any Company Subsidiary, except as required by the terms thereof or this Agreement; (iii) modify the terms of any Indebtedness or other liability, (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other personPerson (other than the Company or a Company Subsidiary), except as described in Schedule 5.01 as being in the Ordinary Course of Business; (v) except in the ordinary course Ordinary Course of business and consistent with past practice; (iii) Business, make any loans, advances or capital contributions to, or investments in, any other person Person; (other than to wholly owned Subsidiaries of the Company or customary loans or advances to employees in accordance with past practice); or (ivvi) enter into any material commitment or transaction (including, but not limited to, including any borrowing, capital expenditure or purchase, sale or lease of assets or real estate); (vii) except in the Ordinary Course of Business, write down the value of any inventory or write off as uncollectible any notes or accounts receivable; or (viii) dispose of or permit to lapse any rights to any material Company Intellectual Property;
(f) Neither the Company nor any Company Subsidiary shall lease, license, mortgage, pledge or encumber any assets other than in the Ordinary Course of Business or transfer, sell or dispose of any assets other than in the Ordinary Course of Business;
(g) Neither the Company nor any Company Subsidiary shall make any change in the compensation payable or to become payable to any of its officers, directors, employees, agents or consultants (other than normal recurring increases in the Ordinary Course of Business with respect to employees who earn less than $100,000 per year) or to Persons providing management services, or enter into or amend any employment, severance, consulting, termination or other Contract with, or employee benefit plan for, or make any loan or advance, in excess of $25,000 individually or $100,000 in the aggregate, to any of its officers, directors, employees, Affiliates, agents or consultants or make any change in its existing borrowing or lending arrangements for or on behalf of any of such Persons pursuant to an employee benefit plan or otherwise;
(h) neither Neither the Company nor any Company Subsidiary shall (i) pay or make any accrual or arrangement for payment of its Subsidiaries shall change any pension, retirement allowance or other employee benefit pursuant to any existing plan, Contract or arrangement to any officer, director, employee or Affiliate or pay or agree to pay or make any accrual or arrangement for payment to any officer, director, employee or Affiliate of any amount relating to unused vacation days, except to the extent the Company or any Company Subsidiary is obligated to do so on the date hereof or, in the case of employees only, would, in the Ordinary Course of Business, make such payment, accrual or arrangement (ii) adopt or pay, grant, issue, accelerate or accrue salary or other payments or benefits pursuant to any Benefit Plan, or any employment or consulting Contract with or for the benefit of any director, officer, employee, agent or consultant, whether past or present, except to the extent the Company or any Company Subsidiary is obligated to do so on the date hereof (or will be obligated based upon consummation of the accounting methods used transactions contemplated by it unless required by GAAPthis Agreement), or (iii) amend in any material respect any such plan, Contract or arrangement in a manner inconsistent with the foregoing;
(i) neither Neither the Company nor any Company Subsidiary shall permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to Purchaser, except policies which are replaced without any material diminution of or gaps in coverage;
(j) Neither the Company nor any Company Subsidiary shall enter into any Contract or transaction, or related series of Contracts or transactions, involving the expenditure in excess of $50,000 and relating to the purchase of assets other than in the Ordinary Course of Business or pursuant to its Subsidiaries existing capital expenditure budget annexed hereto as Schedule 5.01;
(k) Neither the Company nor any Company Subsidiary shall pay, repurchase, discharge or satisfy any of its claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the Ordinary Course of any such Business, of claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (Financial Statements or incurred since the notes thereto) Balance Sheet Date in the Ordinary Course of the Company and its consolidated SubsidiariesBusiness;
(jl) neither Neither the Company nor any of its Subsidiaries will Company Subsidiary shall adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than the Merger)Company Subsidiary;
(km) neither Neither the Company nor any of its Subsidiaries will Company Subsidiary shall take, or agree to or commit to take, any action that would or is reasonably likely to result in any of the conditions to the Closing set forth in Article VI and VII not being satisfied, or would make any representation or warranty of the Company or any Company Subsidiary contained herein, in the case of any representation or warranty not qualified by materiality, materially inaccurate or, in the case of any other representation or warranty, herein inaccurate in any respect at, or as of any time prior to, the Effective TimeClosing Date, or that would materially impair the ability of the Company, Purchaser or the Principal Shareholders to consummate the Closing in accordance with the terms hereof or materially delay such consummation; and
(ln) neither Neither the Company nor any of its Subsidiaries will Company Subsidiary shall enter into an agreement, contractany Contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do do, any of the foregoing.
Appears in 1 contract
Samples: Merger Agreement (Jarden Corp)
Interim Operations of the Company. The Company covenants and agrees that, except (i) as expressly contemplated by this Agreement, (ii) as set forth in Section 5.1 of the Company's Disclosure Schedule or (iii) as agreed in writing by ParentMergerco, after the date hereof, and prior to the time the designees of the Purchaser have been elected to, and shall constitute a majority of, the Board of Directors of the Company pursuant to Section 1.3 (the "Appointment Date"):Effective Time:
(a) the business of the Company and its Subsidiaries shall be conducted only in the ordinary and usual course and, to the extent consistent therewith, each of the Company and its Subsidiaries shall use its commercially reasonable best efforts to preserve its business organization intact and maintain its existing relations with customers, material customers and suppliers, key employees, material creditors and business partnerspartners (including, without limitation, those party to the Material Agreements);
(b) the Company will not, directly or indirectly, (i) sell, transfer or pledge or agree to sell, transfer or pledge any of the Shares, Preferred Stock Stock, or capital stock of it or of any of its Subsidiaries beneficially owned by it; (ii) amend its Articles of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares or Preferred Stock Stock, or any outstanding capital stock of any of the Subsidiaries of the Company;
(c) neither the Company nor any of its Subsidiaries shall: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire any shares of, capital stock of any class of the Company or its Subsidiaries, other than shares reserved for issuance on the date hereof pursuant to the exercise of Options outstanding on the date hereof; (iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any material assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any material indebtedness or other liability; or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock;
(d) neither the Company nor any of its Subsidiaries shall: (i) grant any increase in the compensation payable or to become payable by the Company or any of its Subsidiaries to any of its executive officers or key employees; (ii) (A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under any existing, bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to to, any officer, director or employee of the Company or any its Subsidiaries;
(e) neither the Company nor any of its Subsidiaries shall modify, amend or terminate any of its material contracts Agreements or waive, release or assign any material rights or claims thereunder;
(f) neither the Company nor any of its Subsidiaries shall permit any material insurance policy naming it as a beneficiary or a loss payable payee to be cancelled canceled or terminated without notice to ParentMergerco, and the Company shall use its reasonable commercial best efforts to maintain all such policies;
(g) neither the Company nor any of its Subsidiaries shall: (i) incur or assume any long-term debt or any short-term indebtednessindebtedness other than normal borrowings under the Company's existing revolving credit facility; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person, except in the ordinary course of business and consistent with past practice; (iii) make any loans, advances or capital contributions to, or investments in, any other person (other than to wholly owned Subsidiaries of the Company or customary loans or expense advances to employees in accordance with past practice); or (iv) enter into any material commitment or transaction (including, but not limited to, any material borrowing, capital expenditure or purchase, sale or lease of assets or real estate);
(h) neither the Company nor any of its Subsidiaries shall change any of the accounting methods used by it unless required by GAAP;
(i) neither the Company nor any of its Subsidiaries shall pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company and its consolidated SubsidiariesSubsidiaries or those incurred in the ordinary course of business subsequent to the date of such financial statements;
(j) neither the Company nor any of its Subsidiaries will adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than the Merger);
(k) neither the Company nor any of its Subsidiaries will take, or agree to commit to take, any action that would make any representation or warranty of the Company contained herein, in the case of any representation or warranty not qualified by materiality, materially inaccurate or, in the case of any other representation or warranty, inaccurate in any respect at, or as of any time prior to, the Effective TimeTime in each case without regard to any knowledge qualification; and
(l) neither the Company nor any of its Subsidiaries will enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.
Appears in 1 contract
