Interim Operations. The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless Parent shall otherwise consent in writing, which consent shall not unreasonably be withheld, and except as otherwise expressly contemplated by this Agreement or as set forth in this Agreement): (a) the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, strategic partners, creditors, lessors, employees and business associates; (b) it shall not (i) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (ii) amend its certificate of incorporation or by-laws; (iii) other than in the case of wholly-owned subsidiaries, split, combine or reclassify its outstanding shares of capital stock; (iv) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, other than dividends from its direct or indirect wholly-owned Subsidiaries; or (v) purchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock; (c) neither it nor any of its Subsidiaries shall (i) issue, sell, pledge, dispose of or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debt, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class, Rights, any Voting Debt or any other property or assets (other than shares of Company Common Stock and associated Rights issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans); or (ii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire or encumber any material property or material assets (including capital stock of any of its Subsidiaries) or business; (d) neither it nor any of its Subsidiaries shall restructure, recapitalize, reorganize or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the operation of its assets or businesses or adopt resolutions providing for or authorizing any of the foregoing; (e) neither it nor any of its Subsidiaries shall acquire (i) by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, except purchases of inventory and raw materials in the ordinary course of business (or as permitted by Section 7.1(g), whether or not material); (f) neither it nor any of its Subsidiaries shall (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business), (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates; (g) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters); (h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve; (i) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject; (j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above); (k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measures; (l) neither it nor any of its Subsidiaries shall make or rescind any material Tax election, amend any material Tax Return or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, in each case except in a manner consistent with past practice or as required by applicable Law; (m) other than with respect to any actions permitted under Section 7.2, neither it nor any of its Subsidiaries shall take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VIII not being satisfied; and (n) neither it nor any of its Subsidiaries will authorize any of, or commit, resolve or agree, in writing or otherwise, to take, any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operations.
Appears in 2 contracts
Samples: Merger Agreement (Symbol Technologies Inc), Merger Agreement (Motorola Inc)
Interim Operations. The Except with Purchaser’s prior written consent (not to be unreasonably withheld, conditioned or delayed), Seller shall cause each of the Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior (i) to the Effective Time (unless Parent shall otherwise consent in writing, which consent shall not unreasonably be withheld, and except as otherwise expressly contemplated by this Agreement or as set forth in this Agreement):
(a) the conduct its business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and use its Subsidiaries shall use their respective commercially reasonable efforts to (A) preserve its business organization intact and organizations intact, (B) maintain its existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, strategic partners, creditors, lessors, employees and business associates, and (C) keep available the services of its present employees and agents; and (ii) not to (other than as set forth in the corresponding section of the Seller Disclosure Letter):
(a) amend its Organizational Documents;
(b) it shall not merge or consolidate with any other Person;
(ic) acquire assets outside of the ordinary course of business consistent with past practice from any other Person with a value or purchase price in the aggregate in excess of $50,000,000.00 or that would have any possibility of preventing or delaying the Closing beyond the Termination Date;
(d) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (ii) amend its certificate of incorporation or by-laws; (iii) other than in the case of wholly-owned subsidiariesof, splitgrant, combine or reclassify its outstanding shares of capital stock; (iv) declaretransfer, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, other than dividends from its direct or indirect wholly-owned Subsidiaries; or (v) purchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock OptionsEncumber, or permit any of its Subsidiaries to purchase or otherwise acquireauthorize the issuance, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(c) neither it nor any of its Subsidiaries shall (i) issue, sellsale, pledge, dispose of or encumber (A) any shares of its capital stock of any classdisposition, Rights or any Voting Debtgrant, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class, Rights, any Voting Debt or any other property or assets (other than shares of Company Common Stock and associated Rights issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans); or (ii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose guarantee or other Encumbrance of, abandon, cancel, surrender any Equity Interests of the Company or allow to lapse or expire or encumber any material property or material assets (including capital stock of any of its Subsidiaries) or business;
(d) neither it nor any of its Subsidiaries shall restructure, recapitalize, reorganize or completely or partially liquidate or adopt (other than the issuance of Equity Interests (i) by a plan of complete or partial liquidation or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the operation of its assets or businesses or adopt resolutions providing for or authorizing any wholly-owned Subsidiary of the foregoingCompany to the Company or another wholly-owned Subsidiary or (ii) by the Company to Seller), securities convertible or exchangeable into, or exercisable for, any Equity Interests or any options, warrants or other rights of any kind to acquire any such Equity Interests or such convertible or exchangeable securities;
(e) neither it nor create or incur any Encumbrance (other than a Permitted Encumbrance) on the assets of the Company or any of its Subsidiaries shall acquire (i) by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are materialthat, individually or in the aggregate, is material to the Company and or any of its Subsidiaries;
(f) make any loans, taken as a wholeadvances, except purchases guarantees or capital contributions to or investments in any Person, other than (x) any of inventory and raw materials the foregoing to or on behalf of the Company or any direct or indirect wholly-owned Subsidiary of the Company, or (y) in the ordinary course of business (consistent with past practice and which do not have any possibility of preventing or as permitted by Section 7.1(g), whether or not material)delaying the Closing beyond the Termination Date;
(fg) neither it nor declare, set aside, make or pay any (i) cash distributions or dividends in any month that in the aggregate are in excess of the lesser of (A) $150,000,000.00 and (B) the amount of Free Cash Flow generated by the Company and its Subsidiaries for the preceding month, prorated for the month in which this Agreement is entered into, and for the month in which the Closing occurs; provided, that if distributions or dividends in respect of any month shall have been less than $150,000,000.00 as a result of the foregoing limitation or otherwise, Seller shall be entitled to make additional cash distributions at any time or from time to time up to an amount equal to the lesser of (x) Free Cash Flow for the period since the date of this Agreement and (y) the product of (A) $150,000,000.00 and (B) the number of whole and, without duplication, partial months in such period, or (ii) non-cash distributions or dividends, payable in stock, property or otherwise, with respect to any of its Subsidiaries shall Equity Interests (except for non-cash distributions paid by any direct or indirect wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiary) or enter into any agreement with respect to the voting of its Equity Interests;
(h) (i) incur any indebtedness Indebtedness for borrowed money money, or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business), (ii) issue, issue or sell or amend any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for Indebtedness incurred in the ordinary course of business consistent with past practice that is satisfied in full at or prior to the Closing, or (ii) amend, modify, supplement or waive the terms of any existing Indebtedness, debt securities or warrants or other rights to acquire debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(g) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters);
(h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice;
(i) except as contemplated by the capital budget set forth in the business plan set forth on Schedule 4.16 of the Seller Disclosure Letter, enter intomake or authorize any payment of, renewor accrual or commitment for, modifycapital expenditures in excess of $25,000,000.00 in the aggregate in any consecutive six-month period (or $50,000,000.00 in the event of an increase in data demand in the Business significantly in excess of the demand anticipated on the date hereof);
(j) amend, amendsupplement, waive, terminate, waiveassign, delay the exercise ofconvey, release encumber or assign any material otherwise transfer, in whole or in part, its rights or claims underinterests under or in any Material Contract, or enter into any Company Material Intercompany Contract or Company Lease Contract that would be a Material Contract if in a effect as of the date hereof;
(k) enter into any Intercompany Contract or amend, modify or waive any Intercompany Contract in any manner materially adverse to Parent; provided, that, nothing herein shall permit that would result in the Company or any of its Subsidiaries paying to the other parties thereto aggregate consideration greater than that provided for in the copies of Intercompany Contracts provided to Purchaser pursuant to Section 4.2(a)(v);
(l) make any changes with respect to material financial accounting policies or procedures, except as required by changes in GAAP;
(m) (i) enter into any Contract line of business in any geographic area other than the current lines of business of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of and its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ixand products and services reasonably ancillary thereto (including ancillary Internet services), or (ii) except to the extent permitted by Section 7.2(a) including any current line of this Agreementbusiness and products and services reasonably ancillary thereto, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign in any material rights or claims under, any confidentiality, standstill or similar agreement to geographic area for which the Company or any of its Subsidiaries is bound currently holds a FCC License authorizing the conduct of such business, product or service in such geographic area, (ii) except as currently conducted, engage in the conduct of any business in any state that would require the receipt or transfer of a Communications License or any other License issued by any Governmental Entity authorizing operation or subjectprovision of any communication services or foreign country that would require the receipt or transfer of, or application for, a License to the extent such License would reasonably be expected to prevent, materially delay or materially impair the consummation of the Transaction, or (iii) enter into any business or operations outside of the United States;
(jn) neither it nor file for any Company License the receipt of which would reasonably be likely to prevent, materially impair or materially delay consummation of the Transaction;
(o) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $15,000,000.00;
(p) except to the extent otherwise required by Law, make or change any Tax election, change any method of Tax accounting or settle or finally resolve any controversy with respect to Taxes for an amount that materially exceeds the amount reserved with respect thereto in the most recent Financial Statements, in each case, if such action would have an adverse affect on the Company or Purchaser that is more than immaterial;
(q) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of (i) any Communications Licenses or wireless spectrum and (ii) except in the ordinary course of business consistent with past practice, any other Licenses, assets, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries shallthat are material to the Business, except other than pursuant to Company Contracts in effect prior to the date hereof;
(r) other than as may be required to comply with by applicable Law or agreements, plans or arrangements pursuant to the existing terms and conditions of any Benefit Plan as in effect on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c)terminate, take any action with respect toestablish, adopt, enter into, terminate adopt or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for Benefit Plan other than the benefit or welfare adoption of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions annual Benefit Plans in the ordinary course of business consistent with respect past practice and amendments to individual employment health and welfare plans (other than severance plans) that do not increase benefits or severance agreements result in materially increased administrative costs, (ii) grant any salary or wage increase, other than to increase salary and wages for employees below by no more than 4% in the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases aggregate in the ordinary course of business given to employees below consistent with past practice, (iii) pay aggregate bonus or incentive compensation other than in the level of Vice President on an individual basisordinary course consistent with past practice, (iv) except as otherwise provided herein and (x) grant any new compensation award, other than as set forth bonus awards and cash-based long term incentive compensation awards, in each case in amounts and on Section 7.1(jterms that are in the ordinary course of business consistent with past practice; provided, however, that no new awards shall be granted under the Phantom Share Plan, (y) amend the terms of outstanding compensation awards other than in a manner that does not increase the Company Disclosure Schedule, amend amounts payable or accelerate the payment, right to payment or vesting timing of any payment under such awards and in the ordinary course of business consistent with past practice, or (z) change the compensation or benefits, including opportunity under any outstanding options or restricted stock awardsBenefit Plan, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and severance other than in the ordinary course of business consistent with past practice); provided, however, that notwithstanding any other provision practice in connection with employees’ entering into and not revoking a release of this Agreement, neither claims against the Company nor in connection with terminations of employment, (vi) take any action to accelerate the vesting or payment, or fund or secure the payment, of its Subsidiaries shall enter into any settlement of amounts under any Benefit Plan, (vii) change any assumptions used to calculate funding or compromise contribution obligations under any litigationBenefit Plan, claimother than as required by GAAP, grievance(viii) forgive any loans to directors, charge officers or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs employees of the Company or any of its Subsidiaries Subsidiaries, or places (ix) voluntarily establish or adopt any material restrictions on the ability collective bargaining agreement;
(s) transfer, sell, lease, license, divest or otherwise dispose of any transmission towers owned or leased by the Company or any of its Subsidiaries (it being understood that the foregoing shall not apply to impose any labor saving or other cost reduction measuresthe decommisions of towers in the ordinary course of business consistent with past practice);
(lt) neither it nor purchase, lease or otherwise acquire any wireless spectrum;
(u) make a fundamental change to any of important elements of the network technologies or principal billing systems of the Company and its Subsidiaries shall make or rescind any material Tax election(excluding system upgrades, amend any material Tax Return or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminatedequipment replacement and similar matters, in each case except in a manner consistent with past practice or as required by applicable Law;within the same fundamental framework of network technologies and billing systems); or
(mv) other than with respect authorize or enter into an agreement to any actions permitted under Section 7.2, neither it nor any of its Subsidiaries shall take any action or omit to take any action that is reasonably likely to result in do any of the conditions to the Merger set forth in Article VIII not being satisfied; and
(n) neither it nor any of its Subsidiaries will authorize any of, or commit, resolve or agree, in writing or otherwise, to take, any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operationsforegoing.
Appears in 2 contracts
Samples: Stock Purchase Agreement, Stock Purchase Agreement (At&t Inc.)
Interim Operations. Except as set forth in the corresponding sections or subsections of the Company Disclosure Letter and the Parent Disclosure Letter, as appropriate:
(a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof of this Agreement and prior to the Effective Time (unless Parent shall otherwise consent approve in writing, which consent shall not unreasonably be withheld, writing and except as otherwise required by applicable Law, in which case, the Company shall provide Parent with prior reasonable notice of such requirement, or unless expressly contemplated by this Agreement or as set forth in this the Stock Option Agreement):
(ai) the Its business and that of it and its Subsidiaries shall be conducted only in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable efforts to preserve its their business organization organizations intact and maintain its their existing relations and goodwill with customers, suppliers, regulators, distributors, strategic partners, creditors, lessors, employees and business associates; provided, however, that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 6.1(a) shall be deemed a breach of this Section 6.1(a)(i) unless such action would constitute a breach of one or more such other provisions;
(bii) it It shall not not: (i) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (iiA) amend its certificate of incorporation or by-lawsbylaws; (iiiB) other than in the case of wholly-owned subsidiaries, split, combine combine, subdivide or reclassify its outstanding shares of capital stock; (ivC) declare, set aside or pay any dividend on the Common Shares or other capital stock of the Company payable in cash, stock or property in respect of any such capital stock, stock (other than regular quarterly dividends from its direct or indirect wholly-owned Subsidiarieson the Common Shares not to exceed $.11 per common share per quarter); or (vD) purchaserepurchase, redeem or otherwise acquire, except for in connection with existing commitments under the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options Plans but subject to the extent required or permitted Company's obligations under the terms of such Company Stock Optionssubparagraph (iii) below, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(ciii) Neither it nor any of its Subsidiaries shall take any action that would prevent the Merger from qualifying for "pooling-of-interests" accounting treatment in accordance with the Pooling Requirements or as a "reorganization" within the meaning of Section 368(a) of the Code;
(iv) Neither it nor any of its ERISA Affiliates shall: (A) accelerate, amend or change the period of exercisability of or terminate, establish, adopt, enter into, make any new grants or awards of stock-based compensation or other benefits under any Compensation and Benefit Plans; (B) amend or otherwise modify any Compensation and Benefit Plans; or (C) increase the salary, wage, bonus or other compensation of any directors, officers or employees except, in the case of (A), (B) and (C), (x) for grants or awards to employees with annual salaries below $150,000 under existing Compensation and Benefit Plans in such amounts and on such terms as are consistent with past practice, (y) in the normal and usual course of its business (which may include normal periodic performance reviews and related compensation and benefit increases and the provision of individual Company Compensation and Benefit Plans consistent with past practice for promoted or newly hired employees below the level of Company Vice President on terms consistent with past practice), or (z) for actions necessary to satisfy existing contractual obligations under Compensation and Benefit Plans existing as of the date of this Agreement, including pursuant to rights and obligations under such Compensation and Benefit Plans that vest or mature automatically with the passage of time or the satisfaction of other conditions; provided, that it shall not take such action unless it shall provide Parent with prior reasonable notice; or to comply with applicable law or regulations;
(v) Except for transactions between the Company and one or more of its wholly-owned Subsidiaries or between wholly-owned Subsidiaries of the Company, neither it nor any of its Subsidiaries shall (i) issueincur, sell, pledge, dispose of repay or encumber (A) any shares of its capital stock of any class, Rights retire prior to maturity or any Voting Debt, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class, Rights, any Voting Debt or any other property or assets (other than shares of Company Common Stock and associated Rights issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans); or (ii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire or encumber any material property or material assets (including capital stock of any of its Subsidiaries) or business;
(d) neither it nor any of its Subsidiaries shall restructure, recapitalize, reorganize or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the operation of its assets or businesses or adopt resolutions providing for or authorizing any of the foregoing;
(e) neither it nor any of its Subsidiaries shall acquire (i) by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, except purchases of inventory and raw materials in the ordinary course of business (or as permitted by Section 7.1(g), whether or not material);
(f) neither it nor any of its Subsidiaries shall (i) incur refinance any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business), (ii) or issue, sell sell, repurchase or amend redeem prior to maturity any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” others in all such cases in excess of $10,000,000 in the aggregate or other agreement to maintain any financial statement condition except for the use of another Person or enter into any arrangement having foreign bank lines of credit in the economic effect of ordinary course;
(vi) Neither it nor any of the foregoing, its Subsidiaries shall (iiiA) make any loanscapital expenditures prior to December 31, advances 1999 in an aggregate amount in excess of $8,000,000, except as set forth in the Company's 1999 capital budget which has been made available to Parent or (B) make any capital expenditures subsequent to December 31, 1999 in an amount in excess of an average of $10,000,000 per month;
(vii) Neither it nor any of its Subsidiaries shall issue, deliver, sell, pledge or encumber shares of any class of its capital stock or any securities convertible or exchangeable into, any rights, warrants or options to acquire, or any bonds, debentures, notes or other than routine advances debt obligations having the right to employees vote or convertible or exercisable for any such shares except for transactions between the Company and one or more of its wholly-owned Subsidiaries, or between wholly-owned Subsidiaries of the Company and its Subsidiaries in except for Company Shares issued pursuant to options and other awards outstanding on the ordinary course date of business) or capital contributions to, or investment in, any other Person, other than this Agreement under the Company Stock Plans or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange ratesotherwise permitted by Section 6.1(a)(iv);
(gviii) Except as permitted by Sections 6.2 and 8.3(b), neither it nor any of its Subsidiaries shall make authorize, propose or announce an intention to authorize or propose or enter into an agreement with respect to, any capital expenditures merger, consolidation or business combination (other than the Merger), or any purchase, sale, lease, license or other expenditures with respect to property, plant acquisition or equipment in excess disposition of $10 million per quarter any business or of a material amount of assets or securities excluding sales of inventory or products in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters)ordinary course of business;
(hix) neither It shall not make any material change in its financial accounting policies or procedures, other than any such change that is required by GAAP, or revalue any assets, including, without limitation, writing down the value of material inventory or writing off notes or accounts receivable in a material amount other than as required by GAAP;
(x) Except in the ordinary and usual course of business or as is required by law, it shall not release, assign, settle or compromise any material claims or litigation or make any material tax election or settle or compromise any material United States federal, state, local or foreign tax liability; and
(xi) Neither it nor any of its Subsidiaries shall make authorize or enter into any material changes agreement to do any of the foregoing.
(b) Parent covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement and prior to the Effective Time (unless the Company shall otherwise approve in accounting methods, principles or practices, writing and except insofar as may have been otherwise required by a change applicable Law, in GAAP or applicable Law orwhich case, except as so required, change any assumption underlyingParent shall provide the Company with prior reasonable notice of such requirement, or method of calculating, any bad debt, contingency unless expressly contemplated by this Agreement or other reserve;the Stock Option Agreement):
(i) neither it nor It shall not: (A) amend its certificate of incorporation or bylaws in any manner that would adversely affect the Merger or the other transactions contemplated by this Agreement or the Stock Option Agreement; (B) split, combine, subdivide or reclassify its outstanding shares of its Subsidiaries shallcapital stock; (C) declare, set aside or pay any dividend on the Parent Common Stock or other capital stock of Parent payable in cash, stock or property in respect of any such capital stock (other than regular quarterly dividends on the Parent Common Stock consistent with past practice and other than any dividend that would be received by the holders of Company Common Stock on an equivalent basis per share of Parent Common Stock after the Effective Time); or (D) repurchase, redeem or otherwise acquire, except in the ordinary course of business consistent connection with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse existing commitments under Parent's employee benefit plans but subject to Parent; provided's obligations under subparagraph (iii) below, that, nothing herein shall or permit the Company or any of its Subsidiaries to (i) enter into purchase or otherwise acquire, any Contract shares of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or capital stock;
(ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measures;
(l) neither it nor any of its Subsidiaries shall make or rescind any material Tax election, amend any material Tax Return or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, in each case except in a manner consistent with past practice or as required by applicable Law;
(m) other than with respect to any actions permitted under Section 7.2, neither Neither it nor any of its Subsidiaries shall take any action that would prevent the Merger from qualifying for "pooling-of-interests" accounting treatment in accordance with the Pooling Requirements or omit to take any action that is reasonably likely to result in any as a "reorganization" within the meaning of Section 368(a) of the conditions to the Merger set forth in Article VIII not being satisfiedCode; and
(niii) neither Neither it nor any of its Subsidiaries will shall authorize or enter into any of, or commit, resolve or agree, in writing or otherwise, agreement to take, do any of the foregoing actions; providedforegoing.
(c) Parent and the Company agree that any written approval obtained under Section 6.1(a) must be signed by the Chief Executive Officer or Senior Vice President, howeverGeneral Counsel and Secretary of Parent and any written approval obtained under Section 6.1(b) must be signed by the Chief Executive Officer or Senior Vice President, General Counsel and Secretary of the Company.
(d) Parent and the Company agree that nothing contained in this Agreement shall give prior to Parentthe Closing, directly or indirectly, rights to control or direct the operations record date for determining shareholders of the Company or Parent entitled to receive the regular quarterly dividends permitted hereunder that may be declared by the board of directors of either Parent or the Company after the date of this Agreement but prior to Closing. Prior to Closing, the Company Closing shall exercise, consistent with be the terms and conditions close of this Agreement, complete control and supervision of its and its Subsidiaries’ operationsbusiness on the day on which Parent's then current fiscal quarter ends.
Appears in 2 contracts
Samples: Merger Agreement (Premark International Inc), Merger Agreement (Premark International Inc)
Interim Operations. The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless Parent shall otherwise consent in writing, which consent shall not unreasonably be withheld, and except Except as otherwise expressly contemplated by this Agreement or as set forth on the Company Disclosure Schedule or as agreed to by Parent, the Company covenants and agrees that during the period from the date of this Agreement to the Effective Time (or until termination of this Agreement in this Agreementaccordance with Article 7 hereof):
(a) the business and operations of it the Company and its Subsidiaries subsidiaries shall be conducted only in the ordinary course of business and usual course and, to the extent consistent therewith, it Company and its Subsidiaries subsidiaries shall use their respective commercially reasonable best efforts to preserve its intact their current business organization intact organizations, keep available the services of their current officers and maintain its existing relations employees and goodwill preserve their relationships with their material customers, suppliers, distributorslicensors, strategic partnerslicensees, creditorsadvertisers, lessors, employees distributors and other material third parties having business associatesdealings with them and to preserve the goodwill of their respective businesses;
(b) it the Company shall not (i) authorize for issuance, issue, selldeliver, pledgesell or agree or commit to issue, dispose sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock owned by it in or the capital stock of any of its Subsidiaries; subsidiaries, any other securities or any securities convertible into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including without limitation stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding on the date hereof, or (ii) amend its certificate of incorporation or by-laws; (iii) other than in the case of wholly-owned subsidiaries, split, combine or reclassify its outstanding shares of capital stock; (iv) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, other than dividends from its direct or indirect wholly-owned Subsidiaries; or (v) purchaserepurchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, or permit any of its Subsidiaries subsidiaries to purchase repurchase, redeem or otherwise acquire, any shares of its capital stock or any securities convertible into other equity interests of the Company or exchangeable or exercisable for any shares of its capital stock;
(c) neither it nor any of its Subsidiaries shall subsidiaries (i) issueincluding, sellwithout limitation, pledge, dispose of or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debt, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its subsidiaries);
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its material subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its subsidiaries, (ii) amend or otherwise change the Company Certificate or Company Bylaws or permit any of its subsidiaries to amend its certificate of incorporation, bylaws or equivalent organizational documents or (iii) split, combine or reclassify any shares of its capital stock of any classstock, Rights, any Voting Debt or any other property or assets (other than shares of Company Common Stock and associated Rights issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans); or (ii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire or encumber any material property or material assets (including capital stock of shall not permit any of its Subsidiaries) subsidiaries to split, combine or businessreclassify any shares of its capital stock;
(d) neither it nor the Company shall not, and shall not permit any of its Subsidiaries shall restructuresubsidiaries to, recapitalizedeclare, reorganize set aside or completely pay any dividends on (whether in cash, stock or partially liquidate property), or adopt a plan of complete or partial liquidation or otherwise enter into make any agreement or arrangement imposing material changes or restrictions on the operation other distributions in respect of, any of its assets capital stock (except for dividends paid by direct or businesses or adopt resolutions providing for or authorizing any of indirect wholly owned subsidiaries to the foregoingCompany with respect to capital stock);
(e) neither it the Company nor any of its Subsidiaries subsidiaries shall acquire (i) grant or agree to any material increase in any manner the compensation or fringe benefits of, or pay any bonus to, any current or former director, officer or employee except for increases and bonuses expressly contemplated by or required under existing employment agreements, bonus plans and other agreements and arrangements, and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Option Plans, (ii) enter into any new or materially amend any existing employment, severance or termination agreement with any current, prospective or former director, officer or employee of the Company, (iii) except as may be required to comply with applicable Law and except as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any employee benefit plan that was not in existence on the date hereof or amend, modify or terminate any Company plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereof, (iv) except as may be required to comply with applicable Law and except as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), pay any benefit not required by any plan or arrangement as in effect as of the date hereof (including, without limitation, the granting of, acceleration of, exercisability of or vesting of stock options, stock appreciation rights or restricted stock), except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Option Plans and except for the payment of the employer match under the Company’s 401(k) plan;
(f) the Company shall not, and shall not permit any of its subsidiaries to, acquire or agree to acquire, including, without limitation, by merging or consolidating with, or by purchasing all or a substantial portion of substantially all the assets of or any capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, except other than purchases of inventory and raw materials assets in the ordinary course of business (consistent with past practice and not in excess of $50,000 in any one instance or as permitted by Section 7.1(g), whether or not material)$250,000 in the aggregate;
(fg) neither it nor the Company shall not, and shall not permit any of its Subsidiaries shall subsidiaries to, sell, lease, license, mortgage or otherwise encumber or subject to any lien or otherwise dispose of, or agree to sell, lease, license, mortgage or otherwise encumber or subject to any lien or otherwise dispose of, any of its properties or assets other than (i) incur properties or assets not in excess of $25,000 in one instance or $250,000 in the aggregate, (ii) inventory in the ordinary course of business consistent with past practice, (iii) nonexclusive licenses granted by the Company in the ordinary course of business to customers for such customers’ use of the Company’s products and services and (iv) liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with generally accepted accounting principles;
(h) the Company shall not, and shall not permit any of its subsidiaries to, incur, assume or pre-pay any indebtedness for borrowed money or guarantee enter into any agreement to incur, assume or pre-pay any indebtedness for borrowed money, or guarantee, or agree to guarantee, any such indebtedness or obligation of another Person (other than pursuant to the Credit Agreement in the ordinary course of business), (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiariesperson, guarantee any debt securities of another Personothers, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person person or enter into any arrangement having the economic effect of any of the foregoing;
(i) the Company shall not, (iii) and shall not permit any of its subsidiaries to, make or forgive any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, guarantees for the benefit of, or investment investments in, any other Personperson or entity, other than loans between or among the Company or and any of its direct or indirect wholly wholly-owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(g) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter in the aggregate for the Company subsidiaries and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available cash advances to the Company to spend in future quarters);
(h) neither it nor Company’s or any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or such subsidiary’s employees for reimbursable travel and other reserve;
(i) neither it nor any of its Subsidiaries shall, except business expenses incurred in the ordinary course of business consistent with past practice;
(j) the Company shall not, enter intoand shall not permit any of its subsidiaries to, renewassume, modifyguarantee or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except for the obligations of the subsidiaries of the Company permitted under this Agreement;
(k) the Company and its subsidiaries (i) shall continue in force insurance covering risks of such types and in such amounts as are consistent with the Company’s past practices and (ii) shall not permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated;
(l) the Company shall not, and shall not permit any of its subsidiaries to, establish or acquire (i) any subsidiary other than wholly-owned subsidiaries or (ii) subsidiaries organized outside of the United States and its territorial possessions;
(m) the Company shall not, and shall not permit any of its subsidiaries to, amend, terminate, waive, delay the exercise of, release modify or assign waive any material rights or claims under, term of any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit outstanding security of the Company or any of its Subsidiaries to subsidiaries, except (i) as required by this Agreement, (ii) in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Option Plans or the agreements pursuant to which such Options were granted, and (iii) in connection with terminating the Options and the Stock Option Plans;
(n) the Company shall not, and shall not permit any of its subsidiaries to, enter into any Contract of the type specified in Section 5.5(a)(viii) labor or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Timecollective bargaining agreement, memorandum or modify or amend in a manner adverse to the Company understanding, grievance settlement or any of its Subsidiaries other agreement or commitment to or relating to any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shalllabor union, except as required to comply with applicable Law or agreementsby Law;
(o) the Company shall not, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take and shall not permit any action with respect of its subsidiaries to, adoptsettle or compromise any pending or threatened suit, enter intoaction, terminate claim or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan litigation (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment business), the settlement or severance agreements for employees below compromise of which would result in payments by the level Company in excess of Vice President$25,000;
(p) the Company shall not, (iii) increase in and shall not permit any respect the compensation or fringe benefits of, or pay any bonus of its subsidiaries to, change any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the material accounting policies, practices or procedures (including material Tax accounting policies, practices and procedures) used by the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for and its subsidiaries as of the date hereof, except as may be required as a result of this Agreement under a change in applicable Law or in United States generally accepted accounting principles;
(q) the Company shall not, and shall not permit any Company Benefit Planof its subsidiaries to, (vi) other than make or change any material tax election, make or change any material method of accounting with respect to existing commitments Taxes except as may be required as a result of the date of this Agreement set forth on Section 7.1(ja change in applicable Law, settle or compromise any material tax liability or file any material amended Tax Return;
(r) of the Company Disclosure Scheduleshall not, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) and shall not prevent the Company or permit any of its Subsidiaries from subsidiaries to, pay, discharge or satisfy any claims, liabilities or obligations (xabsolute, accrued, asserted or unasserted, contingent or otherwise), other than (i) prior to the Closing Datepayment, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above discharge or satisfaction in the ordinary course of business and consistent with past practices practice of liabilities reflected or reserved against in the financial statements of the Company or incurred in the ordinary course of business and consistent with past practice or (ii) the payment of the Company’s Expenses (as to defined herein), including the approval payment of such awards the fees and expenses of the Special Committee and the timing of such paymentscosts, to fees and expenses incurred by the extent Special Committee, which shall not exceed in the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above)aggregate $5,000,000;
(ks) the Company shall not, and shall not permit any of its subsidiaries to, transfer or license to any third party or otherwise amend or modify in any material respect any contract relating to Company Intellectual Property other than the grant in the ordinary course of business of non-exclusive licenses to customers in connection with the sale of Company Products;
(t) except for matters identified as set forth in Section 7.1(k5.01(t) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with not have amended the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measures;
(l) neither it nor any of its Subsidiaries shall make or rescind any material Tax election, amend any material Tax Return or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, in each case except in a manner consistent with past practice or as required by applicable Law;
(m) other than with respect to any actions permitted under Section 7.2, neither it nor any of its Subsidiaries shall take any action or omit to take any action that is reasonably likely to result Rights Plan in any manner without the prior consent of the conditions to the Merger set forth in Article VIII not being satisfiedParent; and
(nu) neither it nor the Company shall not, and shall not permit any of its Subsidiaries will authorize any ofsubsidiaries to, agree or commit, resolve or agree, in writing or otherwise, commit to take, do any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operationsforegoing.
Appears in 2 contracts
Samples: Merger Agreement (Infousa Inc), Merger Agreement (Onesource Information Services Inc)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless Parent shall otherwise consent in writingapprove, which consent approval shall not be unreasonably be withheldwithheld or delayed, and except as otherwise expressly contemplated by this Agreement or as set forth in this Agreement):
(ai) the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially all reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, strategic partners, creditors, lessors, employees and business associates;
(bii) it shall not (iA) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries other than sales, dispositions or transfers of such capital stock between the Company and/or its Subsidiaries; (iiB) amend its certificate of incorporation or by-laws; (iiiC) other than in the case of wholly-owned subsidiaries, split, combine or reclassify its outstanding shares of capital stock; (ivD) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, stock other than dividends from its direct or indirect wholly-owned SubsidiariesSubsidiaries and other than regular quarterly cash dividends not in excess of $.04 per Share; or (vE) purchaserepurchase, redeem or otherwise acquire, except for in connection with the acquisition of shares of Company Common Stock from holders of Company Stock Options Plan (including any Tax withholding in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted connection with awards under the terms of such Company Stock OptionsPlan), or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(ciii) neither it nor any of its Subsidiaries shall (iA) issue, sell, pledge, dispose of or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debtof, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class, Rights, any Voting Debt or any other property or assets class (other than shares of Company Common Stock and associated Rights Shares issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plan or Shares issuable under the Compensation and Benefit Plans); or (ii) transferor, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire or encumber any material property or material assets (including capital stock of any of its Subsidiaries) or business;
(d) neither it nor any of its Subsidiaries shall restructure, recapitalize, reorganize or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the operation of its assets or businesses or adopt resolutions providing for or authorizing any of the foregoing;
(e) neither it nor any of its Subsidiaries shall acquire (i) by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, except purchases of inventory and raw materials in the ordinary course of business (or as permitted by Section 7.1(g), whether or not material);
(f) neither it nor any of its Subsidiaries shall (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business), (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary and usual course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(g) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters);
(h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation property or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above)assets and;
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measures;
(l) neither it nor any of its Subsidiaries shall make or rescind any material Tax election, amend any material Tax Return or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, in each case except in a manner consistent with past practice or as required by applicable Law;
(m) other than with respect to any actions permitted under Section 7.2, neither it nor any of its Subsidiaries shall take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VIII not being satisfied; and
(n) neither it nor any of its Subsidiaries will authorize any of, or commit, resolve or agree, in writing or otherwise, to take, any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operations.
Appears in 2 contracts
Samples: Merger Agreement (American General Corp /Tx/), Merger Agreement (Western National Corp)
Interim Operations. The Company Each of Grace and Fresenius AG (for itself and on behalf of Fresenius AG) covenants and agrees as to itself and its Subsidiaries subsidiaries that, from and after the date hereof and prior to until the Effective Time (unless Parent Time, except insofar as the other parties shall otherwise consent in writing, which consent shall not unreasonably be withheld, and or except as otherwise expressly contemplated by this Agreement, the Contribution Agreement, the Distribution Agreement or its Disclosure Letter (provided that, as set forth in this Agreementused herein, all references to Grace (and/or its Affiliates) shall be deemed to refer to Grace and its Affiliates which conduct the NMC Business, consistent with Section 9.8 hereof, except as otherwise specifically provided):
(a) To the extent reasonably practicable, taking into account any operational matters that may arise that are primarily attributable to the pendency of the Reorganization, the business of it and its Subsidiaries shall subsidiaries will be conducted only in the ordinary and usual course consistent with past practice and existing business plans previously disclosed to the other parties and, to the extent consistent therewith, it and its Subsidiaries shall subsidiaries will use their respective commercially all reasonable efforts to preserve its their business organization intact and maintain its their existing relations and goodwill with customers, suppliers, distributors, strategic partners, creditors, lessors, employees and business associates;.
(b) it shall It will not (i) issue, sell, pledge, dispose of sell or encumber pledge or agree to sell or pledge any capital stock owned by it in any of its Subsidiariessubsidiaries or, in the case of Fresenius AG, any FWD Business Subsidiary; (ii) amend its certificate Certificate of incorporation Incorporation or byBy-lawslaws (or similar organizational document); (iii) other than in the case of wholly-owned subsidiaries, split, combine or reclassify its any outstanding shares of capital stock; or (iv) declare, set aside or pay any dividend payable in cash, stock or property in with respect of to any capital stock, other than dividends from its direct or indirect wholly-owned Subsidiaries; or (v) purchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;.
(c) neither it Neither Grace, Fresenius USA, nor any of its Subsidiaries shall (i) their respective subsidiaries or, Fresenius AG, solely with respect to any FWD Business Subsidiary, will issue, sell, pledge, dispose of or encumber (A) encumber, or authorize or propose the issuance, sale, pledge, disposition or encumbrance of, any shares of its capital stock of any class, Rights or any Voting Debtof, or (B) securities convertible into or exchangeable or exercisable for, or options, puts, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class, Rights, any Voting Debt or any other property or assets (class other than common shares of Company Common Stock and associated Rights issuable pursuant to options options, warrants and other stock-based awards convertible securities outstanding on the date hereof under and disclosed in its Disclosure Letter, and employee stock options granted after the Company Stock Plans); date hereof in the ordinary course of business.
(d) None of Grace, Fresenius USA or Fresenius AG, with respect to the FWD Business, will (iii) transfer, lease, license, guarantee, sell, mortgage, pledge, pledge or dispose of any property or assets encumber any property or assets other than in the ordinary and usual course of business; (ii) authorize or make capital expenditures; (iii) make any acquisition of, abandonor investment in, cancelassets, surrender stock or allow to lapse or expire or encumber any material property or material assets (including capital stock other securities of any of other person or entity other than its Subsidiarieswholly owned subsidiaries or (iv) or business;make any divestiture.
(de) Except as required by agreements or arrangements disclosed in its SEC Documents or its Disclosure Letter, neither it nor any of its Subsidiaries shall restructuresubsidiaries or, recapitalizein the case of Fresenius AG, reorganize any FWD Business Subsidiary, will grant any severance or completely termination pay to, or partially liquidate enter into, extend or adopt a plan of complete amend any employment, consulting, severance or partial liquidation other compensation agreement with, any director, officer or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the operation other of its assets or businesses or adopt resolutions providing for or authorizing any of the foregoing;
(e) neither it nor any of its Subsidiaries shall acquire (i) by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a wholeemployees, except purchases of inventory and raw materials to other employees in the ordinary course of business in a manner consistent with past practice, which would bind Newco (or as permitted by Section 7.1(g), whether or not material);its subsidiary) after the Reorganization.
(f) neither it nor any Except as may be required to satisfy contractual obligations existing as of its Subsidiaries shall the date hereof (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant and disclosed to the Credit Agreement in other parties hereto) and the ordinary course requirements of business)applicable law, (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than except in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(g) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to propertysubsidiaries or, plant or equipment in excess of $10 million per quarter in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters);
(h) neither it nor any case of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculatingFresenius AG, any bad debtFWD Business Subsidiary, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect towill establish, adopt, enter into, terminate make, amend or amend make any change in controlelections under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, retentionemployee stock ownership, welfaredeferred compensation, incentive employment, termination, severance or similar other plan, agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former directortrust, officerfund, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement policy or arrangement for the benefit or welfare of any current directors, officers or former director, officer, employee employees which would affect Newco (or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Lawsubsidiary), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measures;
(l) neither it nor any of its Subsidiaries shall make or rescind any material Tax election, amend any material Tax Return or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, in each case except in a manner consistent with past practice practice.
(g) It will not implement any change in its accounting principles, practices or methods, other than as may be required by applicable Law;German GAAP, in the case of Fresenius AG, or US GAAP, in the case of Grace and Fresenius USA, other than as may be necessary or advisable in connection with the Distribution.
(mh) other than with respect to any actions permitted under Section 7.2, neither Neither it nor any of its Subsidiaries shall take any action subsidiaries will authorize or omit enter into an agreement to take any action that is reasonably likely to result in any of the conditions actions referred to the Merger set forth in Article VIII not being satisfied; and
paragraphs (na) neither it nor any of its Subsidiaries will authorize any of, or commit, resolve or agree, in writing or otherwise, to take, any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operationsthrough (g) above.
Appears in 2 contracts
Samples: Agreement and Plan of Reorganization (Grace W R & Co /Ny/), Agreement and Plan of Reorganization (Fresenius Aktiengesellschaft)
Interim Operations. The Company covenants and agrees as Except for matters (w) set forth in Schedule 5.01, (x) expressly agreed to itself and its Subsidiaries thatin writing by Buyer (or, after the date hereof and prior to the Effective Time Joinder Date, the Administrative Agent acting at the direction of the Required Lenders) (unless Parent shall otherwise such consent in writing, which consent shall not to be unreasonably be withheld, conditioned or delayed), (y) ordered by the Bankruptcy Court or (z) otherwise contemplated by the terms of this Agreement, during the Interim Period, Seller shall operate the Assets in all material respects in the ordinary course in a manner substantially consistent with past practice and shall use its best efforts to preserve the value, use, ownership and operation of the Assets, taken as a whole. In addition, except as otherwise expressly contemplated by this Agreement or as (a) set forth in Schedule 5.01, (b) ordered by the Bankruptcy Court or (c) otherwise contemplated by the terms of this Agreement, Seller shall not do (or permit any Purchased Entity to do) any of the following in connection with the Assets without the prior written consent of Buyer (or, prior to the Joinder Date, the Administrative Agent acting at the direction of the Required Lenders):
(a) subject any of the business Assets (or any asset of it and its Subsidiaries shall be conducted in the ordinary and usual course and, any Purchased Entity) to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, strategic partners, creditors, lessors, employees and business associatesany Lien (other than Assumed Encumbrances);
(b) it shall not (i) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (ii) amend its certificate of incorporation or by-laws; (iii) other than in the case of wholly-owned subsidiaries, split, combine or reclassify its outstanding shares of capital stock; (iv) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, other than dividends from its direct or indirect wholly-owned Subsidiaries; or (v) purchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(c) neither it nor any of its Subsidiaries shall (i) issue, sell, pledge, dispose of or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debt, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class, Rights, any Voting Debt or any other property or assets (other than shares of Company Common Stock and associated Rights issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans); or (ii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose ofcancel, abandon, cancel, surrender or allow permit to lapse or expire or encumber any material property or material assets (including capital stock otherwise dispose of any of its Subsidiaries) or business;
Asset (d) neither it nor any of its Subsidiaries shall restructure, recapitalize, reorganize or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the operation of its assets or businesses or adopt resolutions providing for or authorizing any of the foregoing;
(e) neither it nor any of its Subsidiaries shall acquire (i) by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or any stock of, or by asset of any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a wholePurchased Entity), except purchases sales of inventory and raw materials Hydrocarbons in the ordinary course of business (or and as permitted contemplated by Section 7.1(g), whether or not material)5.15;
(fc) neither it nor any of its Subsidiaries shall (i) incur any indebtedness for borrowed money terminate or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business)extend, (ii) issuewaive, sell modify, rescind or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(g) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters);
(h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles amendments to any Assigned Contract or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims underthereunder, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract each case outside of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any ordinary course of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreementbusiness, (ii) take make any action with respect to, adopt, enter into, terminate assignment to BOEM/BSEE or amend any employment other Governmental Authority or severance agreement or arrangement for the benefit or welfare Person of any current indemnification, contribution or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, similar right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than reimbursement from third parties with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance Liabilities relating to decommissioning or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, plugging and abandonment or (viiiii) take any action that would reasonably be expected to fund or in have a material adverse effect on the expected benefits to Buyer from any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above)Assigned Contract;
(kd) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigationmaterial action, claimsuit, grievance, charge litigation or other proceeding involving any Intellectual Property the Assets (or any other material litigationasset of any Purchased Entity), claim, grievance, charge or proceeding (other than with respect to trade claims;
(e) alter, whether through a complete or partial liquidation, dissolution, merger, consolidation, restructuring, reorganization or in connection with any other manner, the enforcement legal structure or ownership of the Company’s rights under this Agreement and other than itself, any Purchased Entity or any joint venture or similar arrangement to which Seller or any Purchased Entity is a party which is an Asset (or an asset of any Purchased Entity) hereunder;
(f) voluntarily incur any Assumed Obligations, except in the ordinary course of business consistent business, or make or agree to make any capital expenditures with past practicerespect to the Assets (or any asset of any Purchased Entity); provided, however, that notwithstanding other than capital expenditures as may be required pursuant to any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time Contract obligations as of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measuresdate hereof;
(lg) neither it nor issue any capital stock, equity interest, option, warrant, subscription, call, exchange right or other right to purchase equity of its Subsidiaries shall make any Purchased Entity, or rescind issue any material Tax election, amend obligations convertible into or exchangeable for equity in any material Tax Return or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, in each case except in a manner consistent with past practice or as required by applicable Law;Purchased Entity; or
(mh) other than with respect to any actions permitted under Section 7.2, neither it nor any of its Subsidiaries shall take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VIII not being satisfied; and
(n) neither it nor any of its Subsidiaries will authorize any of, or commit, resolve or agree, whether in writing or otherwise, to take, do any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operationsforegoing.
Appears in 2 contracts
Samples: Asset Purchase Agreement, Asset Purchase Agreement (Atp Oil & Gas Corp)
Interim Operations. The Company (a) NYSE Euronext covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to until the earlier of the Effective Time (or the termination of this Agreement in accordance with its terms, unless Parent NASDAQ OMX and ICE shall otherwise consent approve in writing, which consent shall not unreasonably be withheld, and except as otherwise expressly contemplated by this Agreement (including with respect to Section 4.14) or except as otherwise set forth in this Agreement):Section 4.1 of the NYSE Euronext Disclosure Letter:
(ai) the business of it and its Subsidiaries shall be conducted in the ordinary and usual course andconsistent with past practice, and NYSE Euronext shall take such actions as are necessary so that (1) if the number of any restricted stock units issued after January 1, 2011 by NYSE Euronext or its Subsidiaries (“NYSE Euronext RSUs”) exceeds the number of any NYSE Euronext RSUs forfeited after January 1, 2011 (any such excess, the “Excess Number”), then NYSE Euronext shall cause a number of XXXX Xxxxxxxx XXXx equal to the extent consistent therewithExcess Number to be settled in cash instead of NYSE Euronext Shares and (2) any stock options issued after January 1, it and its Subsidiaries 2011 by NYSE Euronext shall use their respective commercially reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, strategic partners, creditors, lessors, employees and business associatesbe settled in cash instead of NYSE Euronext Shares;
(bii) (A) it shall not (i) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (iiB) it shall not amend its certificate of incorporation or by-lawsbylaws; (iiiC) other than in the case of wholly-owned subsidiaries, it shall not split, combine or reclassify its outstanding shares of capital stock; (ivD) it shall not declare, set aside or pay any dividend type of dividend, whether payable in cash, stock or property property, in respect of any capital stock, stock other than the quarterly dividends from payable by NYSE Euronext in an amount per share not to exceed its most recent quarterly per share dividend and with the timing of such dividend to be consistent with past practice) or dividends payable by its direct or indirect wholly-wholly owned Subsidiaries to it or another of its direct or indirectly wholly owned Subsidiaries; or and (vE) purchaseit shall not repurchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, or permit any of its Subsidiaries to purchase or otherwise acquire, any interests or shares of its capital stock stock, as applicable, or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(ciii) neither it nor any of its Subsidiaries shall (iA) solely except as may be necessary to effect the Internal Reorganization, issue, sell, pledge, dispose of or encumber (Av) any shares of its capital stock of any class, Rights or any Voting Debtof, or (Bw) securities convertible into or exchangeable or exercisable for, or (x) options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class, Rightsas appropriate, or (y) any Voting Debt bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with its stockholders on any matter or any other property or assets (other than shares of Company Common Stock and associated Rights NYSE Euronext Shares issuable pursuant to options and other stock-based awards outstanding on or awarded prior to the date hereof under the Company NYSE Euronext Stock Plans; (B) other than in the ordinary and usual course of business and consistent with past practice and other than any incurrence of indebtedness that is less than $235,000,000 in the aggregate, incur any long-term indebtedness for borrowed money (including any guarantee of such indebtedness); or (iiC) transfermake or authorize or commit for any capital expenditures, leaseexcept for in accordance with the 2011 capital expenditure target for NYSE Euronext that has been provided to NASDAQ OMX and ICE prior to the date of this Agreement or such other capital expenditures targets as may be agreed by NYSE Euronext, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender NASDAQ OMX and ICE (provided that (1) NYSE Euronext shall be permitted to make or allow to lapse authorize or expire or encumber commit for any material property or material assets (including capital stock of any expenditures in an amount that is between 75% and 110% of its Subsidiariescapital expenditure target and (2) if the Effective Time shall not have occurred on or businessprior to December 31, 2011, then, for purposes of this Section 4.1(a)(iii), NYSE Euronext’s capital expenditure target will be adjusted upwards to take into account the number of days between December 31, 2011 and the Effective Time and assuming that the 2012 capital expenditure target shall be equal to the 2011 capital expenditure target);
(div) neither it NYSE Euronext nor any of its Subsidiaries shall restructure(A) terminate, recapitalizeestablish, reorganize adopt, enter into, make any new grants or completely or partially liquidate or adopt a plan of complete or partial liquidation awards under, amend or otherwise modify, any Benefit Plan, as the case may be, or any other arrangement that would be a NYSE Euronext Stock Plan if in effect on the date hereof other than offer letters provided to newly hired or promoted employees (but excluding offer letters to executive officers of NYSE Euronext and its Subsidiaries or to employees whose target compensation is in excess of the average compensation of executive officers of NYSE Euronext or its Subsidiaries or of the employees, as the case may be), or (B) except for increases occurring in the ordinary and usual course of business consistent with past practice, increase the salary, wage, bonus or other compensation of any employees or fringe benefits of any director, officer or employee or enter into any agreement contract, agreement, commitment or arrangement imposing material changes or restrictions on the operation of its assets or businesses or adopt resolutions providing for or authorizing to do any of the foregoing;
(ev) neither NYSE Euronext nor any of its Subsidiaries shall lease, license, transfer, exchange or swap, mortgage (including securitizations), or otherwise dispose (whether by way of merger, consolidation, sale of stock or assets, or otherwise) of any material portion of its assets, including the capital stock of Subsidiaries (it being understood that the foregoing shall not prohibit the sale of inventory in the ordinary course of business), except for (A) dispositions of assets that in total have an aggregate fair market value of less than $135,000,000, or (B) transactions between NYSE Euronext and any Subsidiary or transactions between Subsidiaries;
(vi) neither NYSE Euronext nor any of its Subsidiaries shall acquire or agree to acquire (iwhether by merger, consolidation, purchase or otherwise) by merging any Person or consolidating withassets, in which the expected gross expenditures and commitments (including the amount of any indebtedness assumed) (A) for all such acquisitions exceeds, in the aggregate, $270,000,000 (it being understood that if NYSE Euronext intends to make one or by purchasing all or a substantial portion more acquisitions that would exceed such amount, then NYSE Euronext, NASDAQ OMX and ICE will discuss in good faith as to whether to permit such acquisitions based on the best interests of NASDAQ OMX and ICE after the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereofEffective Time), or (iiB) any assets that are materialis reasonably likely, individually or in the aggregate, to materially delay the Company and any satisfaction of its Subsidiaries, taken as a whole, the conditions set forth in Article V or prevent the satisfaction of such conditions;
(vii) except purchases of inventory and raw materials in the ordinary and usual course of business (or as permitted by Section 7.1(g)consistent with past practice, whether or not material);
(f) neither it NYSE Euronext nor any of its Subsidiaries shall (i) incur settle or compromise any indebtedness for borrowed material claims or litigation if such settlement or compromise would involve, individually or together with all such other settlements or compromises, the payment of money by NYSE Euronext or guarantee its Subsidiaries of $70,000,000 or more or would involve any such indebtedness admission of another Person (other than pursuant to the Credit Agreement in the ordinary course of business), material wrongdoing or any material conduct requirement or restriction by NYSE Euronext or its Subsidiaries or (ii) issuemodify, sell amend or amend terminate in any debt securities or warrants or other rights to acquire any debt securities of the Company or material respect any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” Material Contracts or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(g) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters);
(h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract thereunder in excess of $70,000,000 individually or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to aggregate;
(i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (iiviii) except to the extent permitted otherwise required by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measures;
(l) neither it NYSE Euronext nor any of its Subsidiaries shall make or rescind change any material Tax election, amend change any material method of Tax Return accounting, file any amended Tax Return, or settle or compromise any audit or proceeding relating to Taxes, in each case, if such action would reasonably be expected to have an adverse effect on NYSE Euronext that is material; or permit any material insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminatedterminated except in the ordinary and usual course of business;
(ix) neither NYSE Euronext nor any of its Subsidiaries shall permit any change in its financial accounting principles, policies or practice (including any of its practices with respect to accounts receivable or accounts payable), except to the extent that any such changes in each financial accounting principles, policies or practices shall be required by changes in GAAP;
(x) neither NYSE Euronext nor any of its Subsidiaries shall enter into any “non-compete” or similar Contract that would materially restrict the business of NASDAQ OMX Group or ICE Group following the Effective Time;
(xi) except as permitted pursuant to Section 4.1(a)(iv), neither NYSE Euronext nor any of its Major Subsidiaries shall enter into any Contract between itself, on the one hand, and any of its employees, officers or directors, on the other hand, if such Contract is not entered into on an arm’s length basis; and
(xii) neither NYSE Euronext nor any of its Subsidiaries will authorize or enter into an agreement to do any of the foregoing set forth in Sections 4.1(a)(i) through (xi) if NYSE Euronext would be prohibited by the terms of Sections 4.1(a)(i) through (xi) from doing the foregoing.
(b) Each of NASDAQ OMX and ICE covenants and agrees as to itself and its Subsidiaries that, after the date hereof and until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms, unless NYSE Euronext shall otherwise approve in writing, and except as otherwise expressly contemplated by this Agreement or except as otherwise set forth in Section 4.1 of the NASDAQ OMX Disclosure Letter or Section 4.1 of the ICE Disclosure Letter, as the case except may be:
(i) (A) it shall not amend its certificate of incorporation or bylaws in a manner consistent with past practice adverse to the stockholders of NYSE Euronext as opposed to any other holders of its common stock; (B) it shall not split, combine or reclassify its outstanding shares of capital stock; (C) it shall not declare, set aside or pay any type of dividend, whether payable in cash, stock or property, in respect of any capital stock; and (D) it shall not repurchase, redeem or otherwise acquire, or permit any of its Subsidiaries to purchase or otherwise acquire, any interests or shares of its capital stock, as required by applicable Lawapplicable, or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(mii) it shall not issue, sell, dispose of or grant, or authorize the issuance, sale, disposition or grant of, any shares of any class of its capital stock except (A) for fair market value or (B) upon the vesting of restricted stock units or the exercise of options, warrants, convertible securities or other rights of any kind to acquire any of its capital stock which were issued with an exercise or conversion price of not less than the market price at the time of issuance; provided, however, that the foregoing shall not prohibit issuances of common stock, restricted stock units, options or rights as part of normal employee compensation in the ordinary course of business; provided, further, that this subsection (B) shall not prohibit the issuance of capital stock, restricted stock units, options, warrants, convertible securities or other rights in connection with respect to any actions permitted under Section 7.2equity financing contemplated by NASDAQ OMX or ICE, as applicable, in connection with the transactions contemplated by this Agreement;
(iii) neither it nor any of its Subsidiaries shall take acquire or agree to acquire (whether by merger, consolidation, purchase or otherwise) any action Person or omit to take assets, in which the expected gross expenditures and commitments (including the amount of any action that indebtedness assumed) is reasonably likely likely, individually or in the aggregate, to result in any materially delay the satisfaction of the conditions to the Merger set forth in Article VIII V or prevent the satisfaction of such conditions;
(iv) it shall not being satisfiedfail to make in a timely manner any filings with the SEC required under the Securities Act of 1933, as amended (including the rules and regulations promulgated thereunder, the “Securities Act”) or the Securities Exchange Act of 1934, as amended (including the rules promulgated thereunder, the “Exchange Act”) or the rules and regulations promulgated thereunder; and
(nv) neither it nor any of its Subsidiaries will authorize any of, or commit, resolve or agree, in writing or otherwise, enter into an agreement to take, do any of the foregoing actions; provided, however, that nothing contained set forth in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with Section 4.1(b)(i) through (iv) if it would be prohibited by the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operationsSection 4.1(b)(i) through (iv) from doing the foregoing.
Appears in 2 contracts
Samples: Merger Agreement (Nasdaq Omx Group, Inc.), Merger Agreement (Intercontinentalexchange Inc)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless Parent SBC shall otherwise consent approve in writing, which consent approval shall not be unreasonably be withheldwithheld or delayed, and except as otherwise expressly contemplated by this Agreement or the Stock Option Agreement, in the Company Disclosure Letter or as set forth in this Agreementrequired by applicable Law):
(ai) the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially all reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, regulators, distributors, strategic partners, creditors, lessors, employees and business associates;
(bii) it shall not (i) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (iiA) amend its certificate of incorporation or by-lawslaws or amend, modify or terminate the Rights Agreement; (iiiB) other than in the case of wholly-owned subsidiaries, split, combine combine, subdivide or reclassify its outstanding shares of capital stock; (ivC) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, other than per share regular quarterly cash dividends from its direct or indirect wholly-owned Subsidiariesnot in excess of $0.44 per Company Share; or (vD) purchaserepurchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, or permit any of its Subsidiaries (other than the Company's Employee Stock Ownership Plan) to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(ciii) neither it nor any of its Subsidiaries shall (iknowingly take any action that would prevent the Merger from qualifying for "pooling of interests" accounting treatment or as a tax-free "reorganization" within the meaning of Section 368(a) issue, sell, pledge, dispose of the Code or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debt, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class, Rights, any Voting Debt or any other property or assets (other than shares of Company Common Stock and associated Rights issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans); or (ii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire or encumber any material property or material assets (including capital stock of that would cause any of its Subsidiaries) or businessrepresentations and warranties herein to become untrue in any material respect;
(div) neither it nor any of its Subsidiaries shall restructureterminate, recapitalizeestablish, reorganize adopt, enter into, make any new grants or completely or partially liquidate or adopt a plan of complete or partial liquidation awards under, amend or otherwise enter into modify, any agreement Compensation and Benefit Plans or arrangement imposing material changes increase the salary, wage, bonus or restrictions other compensation of any directors, officers or employees except (A) for grants or awards to directors, officers and employees of it or its Subsidiaries under existing Compensation and Benefit Plans in such amounts and on such terms as are consistent with past practice, (B) in the operation normal and usual course of its assets business (which shall include normal periodic performance reviews and related compensation and benefit increases and the provision of individual Compensation and Benefit Plans consistent with past practice for promoted or businesses newly hired officers and employees and the adoption of Compensation and Benefit Plans for employees of new Subsidiaries in amounts and on terms consistent with past practice) or adopt resolutions providing (C) for or authorizing any actions necessary to satisfy existing contractual obligations under Compensation and Benefit Plans existing as of the foregoingdate hereof;
(ev) neither it nor any of its Subsidiaries shall acquire (i) by merging issue any preferred stock or consolidating with, or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, except purchases of inventory and raw materials in the ordinary course of business (or as permitted by Section 7.1(g), whether or not material);
(f) neither it nor any of its Subsidiaries shall (i) incur any indebtedness for borrowed money (other than indebtedness incurred solely for the purpose of funding the Escrow Account or the replacement or refinancing of existing short-term indebtedness) or guarantee any such indebtedness if the Company should reasonably anticipate that as a result of another Person (other than pursuant to the Credit Agreement in the ordinary course of business), (ii) issue, sell or amend such incurrence any debt securities or warrants or other rights to acquire any debt securities of the Company Company's or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other ' outstanding senior indebtedness would be rated lower than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange ratesA by Standard & Poor's;
(gvi) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in any calendar year in an aggregate amount in excess of $10 million per quarter the aggregate amount reflected in the aggregate Company's capital expenditure budget for the Company and its Subsidiariessuch year, taken as a whole (it being understood that if capital expenditures in any quarter are less than copy of which has been provided to SBC, plus $10 100 million, the shortfall shall be available to the Company to spend in future quarters);
(h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (ivii) except as otherwise requested contemplated by Parent pursuant to Section 7.11(c6.1(a)(iv), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiateissue, settle deliver, sell, or compromise encumber shares of any litigation, claim, grievance, charge or proceeding involving any Intellectual Property class of its common stock or any other material litigationsecurities convertible into, claimor any rights, grievancewarrants or options to acquire, charge or proceeding (other than in connection with any such shares except the enforcement option granted under the Stock Option Agreement, options outstanding on the date hereof under the Stock Plans, awards of options and restricted stock granted hereafter under the Company’s rights under this Agreement and other than Stock Plans in the ordinary course of business consistent in accordance with past practice); provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries Agreement and shares issuable pursuant to impose any labor saving or other cost reduction measuressuch options and awards;
(lviii) neither it nor any of its Subsidiaries shall make spend in excess of $50 million in any calendar year to acquire any business, whether by merger, consolidation, purchase of property or rescind assets or otherwise (valuing any material Tax electionnon-cash consideration at its fair market value as of the date of the agreement for such acquisition). For purposes of this clause (viii), amend any material Tax Return or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, in each case except in a manner consistent with past practice or as required by applicable Law;
(m) other than the amount spent with respect to any actions permitted under Section 7.2, neither it nor acquisition shall be deemed to include the aggregate amount of capital expenditures that the Company is obligated to make at any time or plans to make as result of its Subsidiaries shall take any action or omit to take any action that is reasonably likely to result in any such acquisition within two years after the date of the conditions to the Merger set forth in Article VIII not being satisfiedacquisition; and
(nix) neither it nor any of its Subsidiaries will authorize shall enter any of, business other than the telecommunications business and those businesses traditionally associated with the telecommunications business or commit, resolve enter into or agree, in writing or otherwise, to take, extend any telecommunications business outside the geographic areas served by it and its Subsidiaries as of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions date of this Agreement, complete control and supervision of its and its Subsidiaries’ operations.; and
Appears in 2 contracts
Samples: Merger Agreement (SBC Communications Inc), Merger Agreement (SBC Communications Inc)
Interim Operations. The Company covenants and agrees as to itself and its Subsidiaries that, after (a) From the date hereof and prior to until the Effective Time (unless Parent shall otherwise consent in writingClosing Date, which consent shall not unreasonably be withheldthe Company shall, and except as otherwise expressly contemplated by this Agreement or as set forth in this Agreement):shall cause its Subsidiaries to:
(ai) operate the business of it and its Subsidiaries shall be conducted Business in the ordinary and usual course of business, consistent with past practice, and, to the extent consistent therewithwith such operation, it and its Subsidiaries shall use their respective commercially reasonable efforts to to: (A) preserve its the present business organization intact intact; and maintain its existing relations and goodwill (B) preserve any beneficial business relationships with all customers, suppliers, distributorsand others having business dealings with the Business; and
(ii) maintain (A) the Purchased Assets in such condition and repair as is consistent with past practice, strategic partners(B) insurance upon all of the Purchased Assets and with respect to the conduct of the Business in full force and effect, creditorscomparable in amount, lessorsscope, employees and business associates;coverage to that in effect on the date of this Agreement, and apply all insurance proceeds from coverage of the Purchased Assets to restore such Purchased Assets or otherwise hold such proceeds for the Buyer's account, and (C) all Permits in full force and effect; and
(iii) conduct their respective advertising activities in a manner which is not materially inconsistent with the Company's advertising budget in effect as of the date of this Agreement.
(b) it shall not (i) issueExcept in connection with the Mergers and the other transactions contemplated by the Merger Agreement, sellfrom the date of this Agreement until the Closing Date, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (ii) amend its certificate of incorporation or by-laws; (iii) other than in neither the case of wholly-owned subsidiaries, split, combine or reclassify its outstanding shares of capital stock; (iv) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, other than dividends from its direct or indirect wholly-owned Subsidiaries; or (v) purchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(c) neither it nor any of its Subsidiaries shall take any of the following actions, to the extent that any such action relates to the Purchased Assets, the Assumed Liabilities or the Business:
(i) issuesubject any of the Purchased Assets to any further material Encumbrance, sell, pledge, dispose of or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debt, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class, Rights, any Voting Debt or any other property or assets (other than shares of Company Common Stock and associated Rights issuable pursuant to options Permitted Encumbrances and other stock-based awards outstanding on than in the date hereof under the Company Stock Plans); or ordinary course of business, consistent with past practice;
(ii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender sell or allow to lapse otherwise convey any part of the Purchased Assets or expire or encumber make any material property or material acquisition of assets (including capital stock which would become part of any the Purchased Assets, except in the ordinary course of its Subsidiaries) or business, consistent with past practice;
(diii) neither it nor make any of its Subsidiaries shall restructure, recapitalize, reorganize material Tax election or completely settle or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into compromise any agreement or arrangement imposing material changes or restrictions on Tax liability without the operation of its assets or businesses or adopt resolutions providing for or authorizing any of the foregoing;
(e) neither it nor any of its Subsidiaries shall acquire (i) by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a wholeBuyer's prior written approval, except purchases of inventory and raw materials in the ordinary course of business consistent with past practice (or as permitted by Section 7.1(g)including, whether or not materialwithout limitation, with respect to the Transferred Subsidiaries);
(fiv) neither it nor grant, convey or sell any option or right to purchase or lease any of the Purchased Assets, except in the ordinary course of business, consistent with past practice;
(v) pay or promise to pay, any bonus, profit-sharing or special compensation to the Available Employees or make or promise to make any increase in the compensation, severance or other benefits payable or to become payable to any of such employees, except (A) as required by applicable Laws, (B) to satisfy obligations under the terms of any agreement or Compensation and Benefit Plan or International Compensation and Benefit Plan in effect as of the date hereof, (C) for increases in compensation that are made in the ordinary course of business consistent with past practice (which shall include normal periodic performance reviews and related compensation and benefit increases) and as set forth on Section 8.1(b)(v) of the Disclosure Letter, (D) in respect of Available Employees covered by collective bargaining agreements, as would be permitted under Section 8.1(b)(vii), and (E) for employment arrangements for or grants of awards to, newly hired employees in the ordinary course of business consistent with past practice, and who are hired in accordance with clause (viii) below and (F) as set forth on Section 8.1(b)(v) of the Disclosure Letter;
(vi) except in the ordinary course of business consistent with past practice or as required by applicable Laws, enter into or terminate any material Contract, or amend, modify or make any change in, or waive any material benefit of, any of its material Contracts;
(vii) enter into any collective bargaining agreements covering employees of the Business, except for the contemplated actions described in Section 8.1(b)(vii) of the Disclosure Letter or as required by applicable Laws;
(viii) involuntarily separate from employment with the Company any employee of the Business without due cause or hire, without the prior written consent of Buyer which shall not be unreasonably withheld, any employee who would become an Available Employee and who would be entitled to an annual base salary greater than $100,000;
(ix) split, combine or reclassify any of the capital stock of the Transferred Subsidiaries shall or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of the capital stock of the Transferred Subsidiaries;
(ix) with respect to the Business or Purchased Assets, incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business)Person, (ii) issue, issue or sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company securities, or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition except for the endorsement of another Person or enter into any arrangement having checks in the economic effect ordinary course of any business and the extension of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries credit in the ordinary course of business) , or make any loans, advances or capital contributions to, or investment investments in, any other Person, other than the Company or (A) to any of its direct or indirect wholly owned Subsidiaries, Transferred Subsidiary or (ivB) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed advances to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(g) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters);
(h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except employees in the ordinary course of business consistent with past practice;
(xi) repurchase, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release redeem or assign otherwise acquire any material rights shares of capital stock or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise other securities of, or release or assign any material rights or claims underother ownership interests in, any confidentiality, standstill or similar agreement to which of the Company or any of its Subsidiaries is bound by or subjectTransferred Subsidiaries;
(jxii) neither it nor issue, deliver or sell any shares of capital stock of any of its the Transferred Subsidiaries, or any securities convertible into or exercisable or exchangeable for shares of capital stock of any of the Transferred Subsidiaries, or any rights, warrants or options to acquire any shares of common stock of any of the Transferred Subsidiaries, other than (A) issuances pursuant to stock- based awards or options that are outstanding on the date hereof or are granted in accordance with the following clause (B), and (B) additional options or stock-based awards to acquire shares of capital stock of any of the Transferred Subsidiaries shall, except as required to comply with applicable Law or agreements, be granted under the terms of stock plans or arrangements existing as in effect on the date hereof, ;
(ixiii) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate amend the certificate of incorporation or bylaws or other comparable organizational documents or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) material terms of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting outstanding securities of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measures;
(l) neither it nor any of its Subsidiaries shall make or rescind any material Tax election, amend any material Tax Return or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, in each case except in a manner consistent with past practice or as required by applicable Law;
(m) other than with respect to any actions permitted under Section 7.2, neither it nor any of its Subsidiaries shall take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VIII not being satisfied; and
(n) neither it nor any of its Subsidiaries will authorize any of, or commit, resolve or agree, in writing or otherwise, to take, any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Transferred Subsidiaries’ operations.;
Appears in 2 contracts
Samples: Asset Purchase Agreement (Church & Dwight Co Inc /De/), Asset Purchase Agreement (Carter Wallace Inc /De/)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time date on which Purchaser's nominees comprise a majority of the Board of Directors of the Company (unless Parent Praxair shall otherwise consent approve in writing, which consent shall not unreasonably be withheld, writing and except as otherwise expressly contemplated by this Agreement or as set forth in this Agreement):
(ai) the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially its reasonable best efforts to preserve its business organization intact and maintain its existing relations rela- tions and goodwill with customers, suppliers, distributors, strategic partners, creditors, lessors, employees and business associates;
(bii) it shall not (iA) issue, sell, pledge, dispose of sell or encumber pledge any capital stock owned by it in any of its Subsidiaries; (iiB) amend the Company Charter or its certificate of incorporation or by-lawslaws or amend, modify or terminate the Rights Agreement; (iiiC) other than in the case of wholly-owned subsidiaries, split, combine or reclassify its outstanding shares of capital stock; (ivD) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, Shares or Preferred Shares other than regular quarterly or semi- annual cash dividends from its direct not in excess of $0.12 per Share and regular quarterly or indirect whollysemi-owned Subsidiariesannual cash dividends on the Preferred Shares; or (vE) purchaserepurchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stockstock except in connection with the ordinary course of operations of the CBI Salaried Employee Stock Ownership Plan (1987);
(ciii) neither it nor any of its Subsidiaries shall except as disclosed in Section 7.1(a) of the Company Disclosure Letter (iA) issue, sell, pledge, dispose of or encumber (A) encumber, or authorize or propose the issuance, sale, pledge, disposition or encumbrance of, any shares of its capital stock of any class, Rights or any Voting Debtof, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class, Rights, class or any Voting Debt or any other property or assets (other than shares of Company Common Stock and associated Rights Shares issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans)Plan or upon conversion of Convertible Preferred Shares; or (iiB) other than in the ordinary and usual course of busi- ness, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender of any other property or allow to lapse or expire assets or encumber any material property or material assets (including capital stock of any of its Subsidiaries) or businessincur or modify any material indebtedness or other liability; or (C) make any commitments for, make or authorize any capital expenditures other than existing capital expenditures required to be made pursuant to existing capital projects, as set forth in Section 7.1(a)(iii) of the Company Disclosure Letter, which have been previously authorized or, by any means, make any acquisition of, or investment in, assets or stock of any other Person or entity;
(div) except as disclosed in Section 7.1(a) of the Company Disclosure Letter, neither it nor any of its Subsidiaries shall terminate, establish, adopt, enter into, make any new grants or awards under, amend or otherwise modify, any Compensation and Benefit Plans or increase the salary, wage, bonus or other compensation of any employees other than increases in compensation in the ordinary course of business, in each case, consistent with past practices with regard to frequency and amount;
(v) neither it nor any of its Subsidiaries shall restructuresettle or compromise any material claims or litigation or, recapitalizeexcept in the ordinary and usual course of business modify, reorganize amend or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into terminate any agreement or arrangement imposing material changes or restrictions on the operation of its assets material Contracts or businesses waive, release or adopt resolutions providing for assign any material rights or authorizing any of the foregoingclaims;
(e) neither it nor any of its Subsidiaries shall acquire (i) by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, except purchases of inventory and raw materials in the ordinary course of business (or as permitted by Section 7.1(g), whether or not material);
(f) neither it nor any of its Subsidiaries shall (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business), (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(gvi) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters);
(h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measures;
(l) neither it nor any of its Subsidiaries shall make or rescind any material Tax election, amend any material Tax Return election or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, in each case terminated except in a manner consistent with past practice or as required by applicable Law;
(m) other than with respect to any actions permitted under Section 7.2, neither it nor any the ordinary and usual course of its Subsidiaries shall take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VIII not being satisfiedbusiness; and
(nvii) neither it nor any of its Subsidiaries will authorize any of, or commit, resolve or agree, in writing or otherwise, enter into an agreement to take, do any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operationsforegoing.
Appears in 2 contracts
Samples: Merger Agreement (Px Acquisition Corp), Merger Agreement (Px Acquisition Corp)
Interim Operations. The Company FEI covenants and agrees as to itself and its Subsidiaries thatSubsidiaries, and PIE covenants and agrees as to the PEO Group and the PEO Business that after the date hereof and prior to the Effective Time Closing (unless Parent the other party shall otherwise consent approve in writing, which consent approval shall not be unreasonably be withheldwithheld or delayed), and except as otherwise expressly contemplated by this Agreement or as set forth in this Agreement):connection with the Restructuring:
(a) the its business and that of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its they and their Subsidiaries shall use their respective commercially reasonable best efforts to preserve its their business organization organizations intact and maintain its their existing relations and goodwill with customers, suppliers, distributors, strategic partners, creditors, lessors, employees and business associates;
(b) it they shall not (i) issue, sell, pledge, dispose of or encumber any capital stock owned by it them in any of its their Subsidiaries; (ii) amend its their Articles of Association, certificate of incorporation or by-laws; (iii) other than in the case of wholly-owned subsidiaries, split, combine or reclassify its their outstanding shares of capital stock; (iv) declare, set aside or pay any dividend or make any distribution payable in cash, stock or property in respect of any capital stock, stock other than dividends from its direct or indirect wholly-owned Subsidiaries; or (v) purchaserepurchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, or permit any of its their Subsidiaries to purchase or otherwise acquire, any shares of its their capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(c) neither it they nor any of its their Subsidiaries shall (i) issue, sell, pledge, dispose of or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debtof, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its their capital stock of any class, Rights, class or any Voting Debt or any other property or assets (other than than, in the case of FEI, shares of Company Common Stock and associated Rights issuable without further action of FEI's board of directors pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock PlansOption Plan); or (ii) other than in the ordinary and usual course of business, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire of or encumber any material other property or material assets (including capital stock of any of its their Subsidiaries) or businessincur or modify any material indebtedness or other liability; (iii) except as disclosed in budgets provided to the other party hereto prior to the date hereof, make any commitments for, make or authorize any capital expenditures other than in the ordinary and usual course of business and in amounts less than $50,000 individually and $250,000 in the aggregate or, by any means, make any acquisition of, or investment in, assets or stock of any other Person or entity; or (iv) enter into any joint venture, merger or other similar agreement with any Person;
(d) except for grants of options, consistent with FEI's past practice, pursuant to its Stock Option Plan to purchase no greater than 5,000 shares of Common Stock, neither it they nor any of its their Subsidiaries shall restructureterminate, recapitalizeestablish, reorganize adopt, enter into, make any new grants or completely or partially liquidate or adopt a plan of complete or partial liquidation awards under, amend or otherwise enter into modify, any agreement Compensation and Benefit Plans, or arrangement imposing material changes increase the salary, wage, bonus or restrictions on other compensation of any employees except increases occurring in the operation ordinary and usual course of its assets or businesses or adopt resolutions providing for or authorizing any of the foregoingbusiness in accordance with established past practice (which shall include normal periodic performance reviews and related compensation and benefit increases);
(e) neither it they nor any of its their Subsidiaries shall acquire (i) by merging settle or consolidating with, or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, except purchases of inventory and raw materials in the ordinary course of business (or as permitted by Section 7.1(g), whether or not material);
(f) neither it nor any of its Subsidiaries shall (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business), (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(g) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters);
(h) neither it nor any of its Subsidiaries shall make compromise any material changes in accounting methods, principles claims or practices, except insofar as may have been required by a change in GAAP or applicable Law litigation or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary and usual course of business consistent with past practice, enter into, renew, modify, amend, terminate, amend or terminate any of their material Contracts or waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subjectclaims;
(jf) neither it they nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measures;
(l) neither it nor any of its their Subsidiaries shall make or rescind any material Tax election, amend any material Tax Return election or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, in each case terminated except in a manner consistent with past practice or as required by applicable Lawthe ordinary and usual course of business;
(mg) other than with respect to any actions permitted under Section 7.2, neither it they nor any of its their Subsidiaries shall take any action will authorize or omit enter into an agreement to take any action that is reasonably likely to result in do any of the conditions to the Merger set forth in Article VIII not being satisfied; and
(n) neither it nor any of its Subsidiaries will authorize any of, or commit, resolve or agree, in writing or otherwise, to take, any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operationsforegoing.
Appears in 2 contracts
Samples: Combination Agreement (Fei Co), Combination Agreement (Philips Electronics N V)
Interim Operations. The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless Parent shall otherwise consent in writing, which consent shall not unreasonably be withheld, and except Except as otherwise expressly contemplated by this Agreement or Agreement, as set forth in Section 5.01 of the Company Disclosure Schedule, as required by applicable Law, for Expenses incurred by the Company or as otherwise agreed to in writing by Parent, the Company covenants and agrees that during the period from the date of this AgreementAgreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(a) the business and operations of it the Company and its Subsidiaries subsidiaries shall be conducted in the ordinary course of business consistent with past practice and usual course and, to the extent consistent therewith, it Company and its Subsidiaries subsidiaries shall use their respective commercially reasonable efforts to preserve its intact their current business organization intact organizations, keep available the services of their current officers and maintain its existing relations key employees and goodwill preserve their relationships with their material customers, suppliers, licensors, licensees and distributors, strategic partners, creditors, lessors, employees and business associates;
(b) it the Company shall not (i) authorize for issuance, issue, selldeliver, pledgesell or agree or commit to issue, dispose sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock owned by it in or the capital stock of any of its Subsidiaries; subsidiaries, any other securities or any securities convertible into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options or Warrants outstanding as of the date of this Agreement, (ii) amend its certificate of incorporation or by-laws; (iii) other than in the case of wholly-owned subsidiaries, split, combine or reclassify its outstanding shares of capital stock; (iv) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, other than dividends from its direct or indirect wholly-owned Subsidiaries; or (v) purchaserepurchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, or permit any of its Subsidiaries subsidiaries to purchase repurchase, redeem or otherwise acquire, any shares of its capital stock or any securities convertible into other equity interests of the Company or exchangeable or exercisable for any shares of its capital stock;
(c) neither it nor any of its Subsidiaries shall subsidiaries (i) issue, sell, pledge, dispose of or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debt, or (B) including securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its subsidiaries) except for forfeitures of Common Shares issued pursuant to Restricted Stock Awards, (iii) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its subsidiaries, (iv) amend or otherwise change its certificate of incorporation or bylaws or permit any of its subsidiaries to amend its certificate of incorporation, bylaws or similar organizational documents, (v) split, combine or reclassify any shares of its capital stock, and shall not permit any of its subsidiaries to split, combine or reclassify any shares of its capital stock or (vi) amend or otherwise change the terms of any classWarrants;
(c) the Company shall not, Rightsand shall not permit any of its subsidiaries to (i) declare, set aside or pay any dividends on (whether in cash, stock or other property), or make any other distributions in respect of, any Voting Debt or any other property or assets of its capital stock (other than shares of Company Common Stock and associated Rights issuable pursuant except for dividends paid to options and other stock-based awards outstanding on the date hereof under the Company Stock Plansby direct or indirect wholly-owned subsidiaries of the Company); or , (ii) transferacquire or agree to acquire, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire or encumber any material property or material assets (including capital stock of any of its Subsidiaries) or business;
(d) neither it nor any of its Subsidiaries shall restructure, recapitalize, reorganize or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the operation of its assets or businesses or adopt resolutions providing for or authorizing any of the foregoing;
(e) neither it nor any of its Subsidiaries shall acquire (i) by merging or consolidating with, or by purchasing all or a substantial portion of the assets (except raw materials, inventory or supplies in the ordinary course of business consistent with past practice) or any capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereofthereof or (iii) enter into, amend, modify or supplement any Contract, transaction, commitment or arrangement with any current or former officer, director, employee or other affiliate of the Company or any of its subsidiaries;
(d) neither the Company nor any of its subsidiaries shall (i) grant or agree to any increase in any manner the compensation, severance benefits or fringe benefits of, or pay any severance or bonus to, any current or former director, officer or employee except for payments made in accordance with Sections 5.11(b) and 5.11(c) hereof, (ii) except as provided in Section 5.11(d) of this Agreement and Section 5.11(d)(iii) of the Company Disclosure Schedule, enter into any new or amend any existing employment, consulting, severance, termination, change-of-control or indemnification Contract with any director, officer or employee of the Company, (iii) except as may be required to comply with applicable Law and except as provided or otherwise contemplated in this Agreement (including Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date of this Agreement or amend, modify or terminate any Benefit Plan or other employee benefit plan or any Contract, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date of this Agreement or (iv) except as may be required to comply with applicable Law and except as provided or otherwise contemplated in this Agreement (including Section 2.02 hereof), pay any benefit not required by any plan or arrangement as in effect as of the date of this Agreement (including the granting of, acceleration of, exercisability of or vesting of stock options, stock appreciation rights or restricted stock, except as otherwise contemplated by this Agreement), except in connection with terminating the Options and the Stock Plans pursuant to Section 2.02 and except for the payment of the employer match under the Company’s 401(k) plan;
(e) the Company shall not, and shall not permit any of its subsidiaries to, sell, lease, license, mortgage or otherwise encumber or subject to any Lien or otherwise dispose of, or agree to sell, lease, license, mortgage or otherwise encumber or subject to any Lien or otherwise dispose of, any of its properties or assets that are material, individually or in the aggregate, to the Company and any of its Subsidiariessubsidiaries, taken as a whole, except purchases other than sales of inventory and raw materials other assets in the ordinary course of business (or as permitted by Section 7.1(g), whether or not material)consistent with past practice;
(f) neither it nor except pursuant to a Material Contract, the Company shall not, and shall not permit any of its Subsidiaries shall subsidiaries to (i) incur incur, assume, pre-pay, discharge or satisfy any indebtedness for borrowed money Indebtedness or guarantee enter into any Contract to incur, assume, pre-pay, discharge or satisfy any Indebtedness, or guarantee, or agree to guarantee, any such indebtedness Indebtedness or obligation of another Person (other than pursuant Person, or issue or sell, or agree to the Credit Agreement in the ordinary course of business)issue or sell, (ii) issue, sell or amend any debt securities or options, warrants or other calls or rights to acquire any debt securities of the Company or any of its Subsidiariessubsidiaries, guarantee any debt securities of another Personothers, enter into any “keep well” or other agreement Contract to maintain any financial statement condition of another Person or enter into any Contract or arrangement having the economic effect of any of the foregoing, or (iiiii) make or forgive any loans, advances (or capital contributions to, guarantees for the benefit of, or investments in, any Person, other than routine advances to employees of (y) loans between or among the Company and any of its Subsidiaries wholly-owned subsidiaries and (z) cash advances to the Company’s or its subsidiary’s employees for reimbursable travel and other business expenses incurred in the ordinary course of business;
(g) neither the Company nor any of its subsidiaries shall adopt or capital contributions toput into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or investment in, any other Person, other than reorganization of the Company or any of its direct or indirect wholly owned Subsidiariessubsidiaries;
(h) the Company shall not, and shall not permit any of its subsidiaries to, (i) enter into, or amend, modify, elect not to renew or terminate or waive, release or assign any rights under any Material Contract in any material respect in a manner which is adverse to the Company or its subsidiaries (iv) other than entering into a new Material Contract to replace a Material Contract which has terminated without a breach thereunder by its terms, which new Material Contract is consistent with the terms of the terminated Material Contract);
(i) except for customer Contracts entered into in the ordinary course of businessbusiness consistent with past practice, the Company shall not, and shall not permit its subsidiaries to, renegotiate or enter into any hedging agreement new material Contract, license, arrangement or other financial agreement or arrangement designed relating to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange ratesany Proprietary Rights;
(gj) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter in the aggregate for the Company and its Subsidiariessubsidiaries (i) shall comply in all material respects with their obligations under the Material Contracts as such obligations become due, taken (ii) shall continue in force insurance covering risks of such types and in such amounts as a whole are consistent with the Company’s past practices and (iii) shall not permit any insurance policy naming it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall as beneficiary or loss payable payee to be available to the Company to spend in future quarters)canceled or terminated;
(hk) neither it nor the Company shall not, and shall not permit any of its Subsidiaries subsidiaries to, make any capital expenditure or commitments not consistent with the expenditures in the Company’s capital budget for 2008 provided to Parent;
(l) the Company shall not, and shall not permit any of its subsidiaries to make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency their respective standardized or other reserve;
(i) neither it nor any of its Subsidiaries shallsales terms and conditions, except in the ordinary course of business consistent with past practice;
(m) the Company shall not, and shall not permit any of its subsidiaries to, enter intointo any settlement, renew, modify, amend, terminate, waive, delay the exercise of, release conciliation or assign similar Contract with any Governmental Authority or that requires payment of any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit consideration after the execution date of this Agreement;
(n) the Company shall not, and shall not permit any of its subsidiaries to, (i) settle or compromise any pending or threatened Claim, except with respect to the settlement or compromise of any such Claim where the full amount paid or to be paid is covered by insurance coverage maintained by the Company, (ii) change any of the accounting policies, practices or procedures (including material Tax accounting methods, periods, policies, practices or procedures) or any of its Subsidiaries to (i) enter into any Contract methods of the type specified reporting income, deductions or other items for financial accounting purposes, except as may be required as a result of a change in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive GAAP enacted after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) date of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business a manner consistent with past practice); provided, howevermake, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measures;
(l) neither it nor any of its Subsidiaries shall make change or rescind any material Tax election, amend enter into any material closing agreement relating to Taxes, settle or compromise any material Tax Return liability, audit, claim, proceeding or permit assessment, file any insurance policy naming it as material amended Tax Return, surrender any right to claim a beneficiary refund of material Taxes, or loss-payable payee consent to be cancelled any extension or terminated, in each case except in a manner consistent with past practice waiver of the limitation period applicable to any material Tax liability or as required by applicable Lawassessment;
(mo) other than with respect to any actions permitted under Section 7.2the Company shall not, neither it nor and shall not permit any of its Subsidiaries shall take subsidiaries to, allow any action material Company Proprietary Rights to become abandoned or omit expired for failure to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VIII not being satisfiedmake required filings or pay required fees; and
(np) neither it nor the Company shall not, and shall not permit any of its Subsidiaries will authorize any ofsubsidiaries to, agree or commit, resolve or agree, in writing or otherwise, commit to take, do any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operationsforegoing.
Appears in 2 contracts
Samples: Merger Agreement (Bard C R Inc /Nj/), Merger Agreement (Specialized Health Products International Inc)
Interim Operations. The Company (a) Yankees covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to until the earlier of the Effective Time (or the termination of this Agreement in accordance with its terms, unless Parent Braves shall otherwise consent approve in writing, which consent shall not unreasonably be withheld, and except as otherwise expressly contemplated by this Agreement or except as otherwise set forth in this Agreement):Section 4.1(a) of the Yankees Disclosure Letter:
(ai) the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, strategic partners, creditors, lessors, employees and business associatespast practice;
(bii) (A) it shall not (i) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (iiB) it shall not amend its certificate of incorporation or by-lawsbylaws; (iiiC) other than in the case of wholly-owned subsidiaries, it shall not split, combine or reclassify its outstanding shares of capital stock; (ivD) it shall not declare, set aside or pay any dividend type of dividend, whether payable in cash, stock or property property, in respect of any capital stock, stock other than the quarterly dividends from payable by Yankees (in an amount per share not to exceed its most recent quarterly per share dividend and with the timing of such dividend to be consistent with past practice) or, subject to Section 4.1(a)(viii) of the Yankees Disclosure Letter, dividends payable by its direct or indirect wholly-wholly owned Subsidiaries to it or another of its direct or indirectly wholly owned Subsidiaries; or and (vE) purchaseit shall not repurchase, redeem or otherwise acquire, or permit any of its Subsidiaries to purchase or otherwise acquire, any interests or shares of its capital stock, as applicable, or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(iii) neither it nor any of its Subsidiaries shall (A) issue, sell, pledge, dispose of or encumber (v) any shares of, or (w) securities payable in, convertible into or exchangeable or exercisable for, or (x) options, warrants, calls, commitments or rights of any kind to acquire, capital stock of any class, as appropriate, or (y) any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with its stockholders on any matter or any other property or assets other than Yankees Shares issuable pursuant to stock-based awards outstanding on or awarded prior to the date hereof under the Yankees Stock Plans; (B) (1) increase the amount of net indebtedness for borrowed money, including any guarantee of such indebtedness, by $100,000,000 in excess of the net indebtedness set forth in the Yankees Financial Statement as of December 31, 2012 (it being understood that net indebtedness shall be calculated as the amount of debt less the sum of the amount of cash and marketable securities, in each case, set forth in the Yankees Financial Statements as of December 31, 2012; it being further understood that notwithstanding the amount set forth in such Yankees Financial Statements, the non-U.S. dollar-denominated portion of such calculation shall be determined using the exchange rates in effect as of the date hereof without regard to any subsequent changes in such rates) or (2) incur any additional indebtedness for borrowed money with a tenor of greater than 90 days, including any guarantee of such indebtedness; or (C) make or authorize or commit for any capital expenditures, except for in accordance with the acquisition 2013 capital expenditure target for Yankees that has been provided to Braves prior to the date of shares this Agreement or such other capital expenditures targets as may be agreed by Yankees and Braves (provided that (1) Yankees shall be permitted to make or authorize or commit for any capital expenditures in an amount that is between 75% and 110% of Company Common Stock from holders its capital expenditure target and (2) if the Effective Time shall not have occurred on or prior to December 31, 2013, then, for purposes of Company Stock Options this Section 4.1(a)(iii), Yankees’s capital expenditure target will be adjusted upwards to take into account the number of days between December 31, 2013 and the Effective Time and assuming that the 2014 capital expenditure target shall be equal to the 2013 capital expenditure target);
(iv) except as required pursuant to existing written, binding agreements in full or partial payment effect prior to the date hereof and set forth in Section 4.1(a)(iv) of the exercise price payable Yankees Disclosure Letter, or as otherwise required by such holder upon exercise applicable Law, neither Yankees nor any of Company Stock Options its Subsidiaries shall (A) grant or provide any severance or termination payments or benefits to any director, officer or employee of Yankees or any of its Subsidiaries, (B) increase in any manner the compensation, bonus, pension, welfare, fringe, severance or other benefits of, pay any bonus to, or make any new equity awards to any current or former director, officer, employee or consultant of Yankees or any of its Subsidiaries (other than increases in base salary in the ordinary course of business for employees who are not officers), (C) become a party to, establish, adopt, commence participation in, amend or terminate any stock option plan or other stock-based compensation plan, or any compensation, severance, pension, retirement, profit-sharing, welfare benefit, or other employee benefit plan or agreement with or for the benefit of any current or former directors, officers, employees or consultants of Yankees or its Subsidiaries (or newly hired employees) or amend the terms of any outstanding equity-based awards, (D) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Benefit Plan, to the extent not already provided in any such Benefit Plan, (E) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization, (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP, (G) terminate without cause the employment of any member of the management committee of Yankees, or (H) forgive any loans or issue any loans to directors, officers or employees of Yankees or any of its Subsidiaries;
(v) neither Yankees nor any of its Subsidiaries shall lease, license, transfer, exchange or swap, mortgage (including securitizations), or otherwise dispose (whether by way of merger, consolidation, sale of stock or assets, or otherwise) of any material portion of its assets, including the capital stock of Subsidiaries (it being understood that the foregoing shall not prohibit the sale of inventory in the ordinary course of business), except for (i) dispositions of assets that in total have an aggregate fair market value of less than $50,000,000;
(vi) neither Yankees nor any of its Subsidiaries shall (A) acquire or invest in or agree to acquire or invest in (whether by merger, consolidation, purchase or otherwise) any Person or assets, in which the expected gross expenditures and commitments (including the amount of any indebtedness assumed) (I) for all such acquisitions exceeds, in the aggregate, $50,000,000 or (II) is reasonably likely, individually or in the aggregate, to delay the satisfaction of the conditions set forth in Article V hereof or prevent the satisfaction of such conditions or (B) enter into any joint venture, partnership or similar agreement with any Person;
(vii) subject to Section 4.13, neither Yankees nor any of its Subsidiaries shall (A) settle or compromise any material claims or litigation if such settlement or compromise would involve, individually or together with all such other settlements or compromises, the payment of money by Yankees or its Subsidiaries of $60,000,000 (provided that Yankees shall consult in good faith with respect to any such proposed settlement or compromise individually in excess of $20,000,000) or more or would involve any admission of material wrongdoing or any material conduct requirement or restriction by Yankees or its Subsidiaries, (B) modify, amend or terminate in any material respect any of its Material Contracts or waive, release or assign any material rights or claims thereunder in excess of $10,000,000 individually or in the aggregate or (C) enter into any new clearing services agreement or arrangement or modify or amend in any material respect any existing clearing services agreement or arrangement to extend the term or to increase the commitments of Yankees or any of its subsidiaries thereunder;
(viii) except to the extent otherwise required by Law, neither Yankees nor any of its Subsidiaries shall (A) make or change any Tax election, change any method of Tax accounting, file any amended Tax Return, or settle or compromise any audit or proceeding relating to Taxes, in each case, if such action would reasonably be expected to have an adverse effect on Yankees and its Subsidiaries that is material; (B) take any action specified in Section 4.1(a)(viii)(B) of the Yankees Disclosure Letter; or (C) permit any material insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated except in the ordinary and usual course of business;
(ix) neither Yankees nor any of its Subsidiaries shall permit any change in its financial accounting principles, policies or practice (including any of its practices with respect to accounts receivable or accounts payable), except to the extent that any such changes in financial accounting principles, policies or practices shall be required by changes in GAAP;
(x) neither Yankees nor any of its Subsidiaries shall enter into any Contract that includes a “non-compete,” exclusivity or similar provision that would materially restrict the business of Braves or any of its Subsidiaries (including Yankees and its Subsidiaries) following the Effective Time;
(xi) except as permitted under pursuant to Section 4.1(a)(iv), neither Yankees nor any of its Subsidiaries shall enter into any Contract between itself, on the one hand, and any of its employees, officers or directors, on the other hand;
(xii) neither Yankees nor any of its Subsidiaries shall knowingly take or omit to take any action if such action or failure to act would be reasonably likely to prevent or impede the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xiii) neither Yankees nor any of its Subsidiaries will authorize or enter into an agreement to do any of the foregoing set forth in Section 4.1(a)(i) through Section 4.1(a)(xii) if Yankees would be prohibited by the terms of such Company Stock OptionsSection 4.1(a)(i) through Section 4.1(a)(xii) from doing the foregoing; and
(xiv) it shall not fail to make in a timely manner any filings with the SEC required under the Securities Act or the Exchange Act or the rules and regulations promulgated thereunder.
(b) Braves covenants and agrees as to itself and its Subsidiaries that, after the date hereof and until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms, unless Yankees shall otherwise approve in writing, and except as otherwise expressly contemplated by this Agreement or except as otherwise set forth in Section 4.1(a) of the Braves Disclosure Letter:
(i) (A) it shall not split, combine or reclassify its outstanding shares of capital stock; (B) it shall not declare, set aside or pay any type of dividend, whether payable in cash, stock or property, in respect of any of its capital stock; and (C) it shall not directly or indirectly repurchase, redeem or otherwise acquire, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock, if such repurchase or acquisition is at a price above the then market value;
(cii) it shall not issue, sell, dispose of or grant, or authorize the issuance, sale, disposition or grant of, any shares of any class of its capital stock except (A) for fair market value or (B) upon the vesting of restricted stock units or the exercise of options, warrants, convertible securities or other rights of any kind to acquire any of its capital stock which were issued with an exercise or conversion price of not less than the market price at the time of issuance; provided, however, that the foregoing shall not prohibit issuances of common stock, restricted stock units, options or rights as part of normal employee compensation in the ordinary course of business; and provided, further, that this clause (B) shall not prohibit the issuance of capital stock, restricted stock units, options, warrants, convertible securities or other rights in connection with any equity financing contemplated by Braves in connection with the transactions contemplated by this Agreement;
(iii) it shall not fail to make in a timely manner any filings with the SEC required under the Securities Act or the Exchange Act or the rules and regulations promulgated thereunder;
(iv) neither it nor any of its Subsidiaries shall (iknowingly take or omit to take any action if such action or failure to act would be reasonably likely to prevent or impede the Merger from qualifying as a reorganization within the meaning of Section 368(a) issue, sell, pledge, dispose of or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debt, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class, Rights, any Voting Debt or any other property or assets (other than shares of Company Common Stock and associated Rights issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans); or (ii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire or encumber any material property or material assets (including capital stock of any of its Subsidiaries) or businessCode;
(dv) neither it nor any of its Subsidiaries shall restructure, recapitalize, reorganize or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the operation of its assets or businesses or adopt resolutions providing for or authorizing any of the foregoing;
(e) neither it Braves nor any of its Subsidiaries shall acquire (iother than with respect to any agreements entered into prior to the date of this Agreement) or agree to acquire (whether by merging merger, consolidation, purchase or consolidating withotherwise, which have been previously publically disclosed or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (iiprovided to Yankees) any Person or assets that are materialis reasonably likely, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, except purchases of inventory and raw materials in the ordinary course of business (or as permitted by Section 7.1(g), whether or not material);
(f) neither it nor any of its Subsidiaries shall (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business), (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(g) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures delay in any quarter are less than $10 million, material respects the shortfall shall be available to the Company to spend in future quarters);
(h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measures;
(l) neither it nor any of its Subsidiaries shall make or rescind any material Tax election, amend any material Tax Return or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, in each case except in a manner consistent with past practice or as required by applicable Law;
(m) other than with respect to any actions permitted under Section 7.2, neither it nor any of its Subsidiaries shall take any action or omit to take any action that is reasonably likely to result in any satisfaction of the conditions to the Merger set forth in Article VIII not being satisfiedV hereof or prevent the satisfaction of such conditions; and
(nvi) neither it nor any of its Subsidiaries will authorize any of, or commit, resolve or agree, in writing or otherwise, enter into an agreement to take, do any of the foregoing actions; provided, however, that nothing contained set forth in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with Section 4.1(b)(i) through Section 4.1(b)(v) if it would be prohibited by the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operationsSection 4.1(b)(i) through Section 4.1(b)(v) from doing the foregoing.
Appears in 2 contracts
Samples: Merger Agreement (NYSE Euronext), Merger Agreement (Intercontinentalexchange Inc)
Interim Operations. The Company covenants and agrees as to itself and its Subsidiaries that, after (a) From the date hereof and prior to of this Agreement until the Effective Time (unless Parent shall otherwise consent approve in writing, which consent shall not unreasonably be withheldwriting in its sole discretion, and except as otherwise expressly contemplated by this Agreement or as set forth in this Agreement):
), the Company shall ensure that (ai) the business and operations of it and its Subsidiaries the Acquired Companies shall be conducted (A) in the ordinary and usual course andand (B) in compliance with all applicable Laws and the requirements of all Material Contracts, and (ii) to the extent consistent therewith, it and its Subsidiaries each Acquired Company shall use their its respective commercially reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, strategic partners, suppliers, distributors, strategic partners, creditors, lessors, employees and business associates;.
(b) it From the date of this Agreement until the Effective Time (unless Parent shall otherwise approve in writing in its sole discretion, and except as otherwise expressly contemplated by this Agreement), the Company shall not, and shall cause each of the other Acquired Companies not to:
(i) (A) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (iiB) amend or waive or propose to amend or waive any provision of its certificate of incorporation or by-lawsbylaws; (iiiC) other than in the case of wholly-owned subsidiaries, split, combine or reclassify its outstanding shares of capital stock; (ivD) declare, accrue, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, stock other than dividends from its direct or indirect wholly-owned Subsidiaries; or (vE) purchaserepurchase, redeem or otherwise acquire, except for as may be required by the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock OptionsPlans, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(cii) neither it nor any of its Subsidiaries shall (iA) issue, sell, pledge, dispose of or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debtof, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class, Rights, any Voting Debt class or any other property or assets (other than shares of Company Common Stock and associated Rights Shares issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock PlansPlans and other than the sale by a Subsidiary of the Company of assets pursuant to a Contract executed prior to the date of this Agreement); or (iiB) transfer, leaselease (other than leases for equipment entered into in the ordinary course for construction, maintenance and facilities development projects), license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire of or encumber any material other property or material assets (including capital stock of any of its Subsidiaries) or business;
(d) neither it nor incur or modify any of its Subsidiaries shall restructure, recapitalize, reorganize or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the operation of its assets or businesses or adopt resolutions providing for or authorizing any of the foregoing;
(e) neither it nor any of its Subsidiaries shall acquire (i) by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association indebtedness or other business organization or division thereof, or (ii) any assets that are material, Liability in amounts greater than $75,000 individually or and $500,000 in the aggregate, to the Company and ; (C) make or authorize or commit for any of its Subsidiaries, taken as a whole, except purchases of inventory and raw materials in the ordinary course of business (or as permitted by Section 7.1(g), whether or not material);
(f) neither it nor any of its Subsidiaries shall (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (capital expenditures other than pursuant to the Credit Agreement capital appropriations/spending budgets set forth in the ordinary course of business), (ii) issue, sell Company Disclosure Schedule after deducting amounts previously authorized or amend any debt securities or warrants or other rights to acquire any debt securities of committed by the Company or with respect to calendar year 2018 or, by any of its Subsidiariesmeans, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions toacquisition of, or investment in, assets or stock of or other interest in, any other Person, other than the Company Person or any of its direct or indirect wholly owned Subsidiaries, entity; or (ivD) other than in the ordinary course of business, enter into any hedging joint venture agreement, partnership agreement or other financial similar agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rateswith any Person;
(giii) neither it nor (A) grant or provide any severance or termination payments or benefits to any director, officer or employee of its Subsidiaries shall make any capital expenditures or other expenditures with respect to propertyAcquired Company except, plant or equipment in excess of $10 million per quarter in the aggregate for the Company and its Subsidiariescase of employees who are not officers, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters);
(h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, enter into(B) increase the compensation, renew, modify, amend, terminate, waive, delay the exercise of, release bonus or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retentionpension, welfare, incentive profit-sharing, severance or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe other benefits of, or pay any bonus to, or make any new equity awards to any director, officer, officer or employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basisany Acquired Company, (ivC) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Scheduleenter into, adopt, extend, amend or accelerate the paymentrenew any employment, right to payment severance, change in control, termination, deferred compensation or vesting other similar agreement with any director, officer or employee of any compensation or benefits, including any outstanding options or restricted stock awardsAcquired Company, (vD) pay establish, adopt, amend, suspend, terminate or exercise any benefit not provided for as of the date of this Agreement discretion under any Company Benefit PlanPlan or amend the terms of or exercise any discretion under any Company Awards, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (viiE) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however(F) take any action to accelerate the vesting or payment of any compensation or benefits under any Company Benefit Plan, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Dateextent not already required by any such Company Benefit Plan, paying awards under (G) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan or to change the 2006 Executive Incentive Plan and commissions manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP, or (H) forgive any loans to directors, officers or employees at the level of Vice President and above any Acquired Company;
(iv) commence or settle or compromise any claims or litigation to which an Acquired Company is a party or is threatened to be made a party (except with respect to non-material disputes as may arise from time to time in the ordinary course of business and consistent with past practices as to the approval of such awards Acquired Company that involve only the payment of monetary damages not in excess (A) of $100,000 individually or $250,000 in the aggregate and (B) in the timing case of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Lawdisputes disclosed on Section 6.1(h), adopting and maintaining plans providing for bonuses in amounts not exceeding 25% of the amount accrued or incentive compensation reserved against in 2007 for employees (including those at the level unaudited consolidated balance sheet of Vice President or abovethe Acquired Companies as of September 30, 2017);
(kv) except for matters identified in Section 7.1(k(A) of the modify, amend, enter into or terminate any material Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and Contract other than in the ordinary course of business consistent or waive, release or assign any material rights or claims with past practice)respect thereto; providedor (B) (1) modify or amend the KKR Facility in a manner materially adverse to the Acquired Companies or Parent or (2) modify or amend the KKR Forbearance;
(vi) make any Tax election, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of settle or compromise any litigationTax claim or Liability, claimchange (or make a request to any Governmental Entity to change) any material aspect of its method of accounting for Tax purposes, grievancefile any amended Tax Return, charge or proceeding that, whether at prepare any Tax Return in a manner inconsistent with the time past practice of the settlement Acquired Companies, surrender any claim for a refund of a material amount of Taxes, or compromise consent to any extension or at any time in the future, materially increases the labor or operating costs waiver of the Company or any of its Subsidiaries or places limitation period applicable to any material restrictions on the ability of the Company Tax claim or any of its Subsidiaries to impose any labor saving or other cost reduction measuresassessment;
(lvii) neither it nor any of its Subsidiaries shall make or rescind any material Tax election, amend any material Tax Return or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, in each case terminated except in a manner consistent with past practice or as required by applicable Lawthe ordinary and usual course of business;
(mviii) other than with respect to any actions permitted under Section 7.2, neither it nor any of its Subsidiaries shall take any action or omit to take any action that is reasonably likely would cause any of its representations and warranties herein to result become untrue in any material respect;
(ix) authorize or enter into any Xxxxxx;
(x) enter into any agreement that limits the ability of any Acquired Company, or would limit the conditions ability of Parent or any Subsidiary of Parent (including any Acquired Company) after the Effective Time, to compete in or conduct any line of business or compete with any Person in any geographic area or during any period;
(xi) enter into any new business line;
(xii) (A) adopt a plan or agreement of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other material reorganization of such Acquired Company; (B) consent to or support the Merger set forth commencement of an involuntary case against such Acquired Company or the filing of an involuntary petition seeking bankruptcy, winding up, dissolution, liquidation, administration, moratorium, reorganization or other relief in Article VIII not being satisfiedrespect of such Acquired Company or its debts, or of a substantial part of its assets, under any federal, state or foreign bankruptcy, insolvency, administrative, receivership or similar law now or hereafter in effect; or (C) fail to contest or controvert any involuntary proceeding or petition described in this Section 7.1(b)(xii) within ten days following the commencement of such involuntary proceeding against such Acquired Company; and
(nxiii) neither it nor any of its Subsidiaries will authorize any ofauthorize, commit or commit, resolve or agree, in writing or otherwise, enter into an agreement to take, do any of the foregoing actions; provided, however, that nothing foregoing.
(c) Nothing contained in this Agreement shall give to ParentParent or Merger Sub, directly or indirectly, rights to control or direct the operations of the Company Acquired Companies prior to Closingthe Closing Date. Prior to Closingthe Closing Date, the Company Acquired Companies shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ their operations.
(d) Prior to the Effective Time, the Company shall promptly notify Parent in writing of: (i) the occurrence or non-occurrence of any event, condition, fact or circumstance that occurred or existed on or prior to the date of this Agreement and that caused or constitutes a material inaccuracy in any representation or warranty made by the Company in this Agreement; (ii) any event, condition, fact or circumstance that occurs, arises or exists after the date of this Agreement and that would cause or constitute a material inaccuracy in any representation or warranty made by the Company in this Agreement if: (A) such representation or warranty had been made as of the time of the occurrence, existence or discovery of such event, condition, fact or circumstance; or (B) such event, condition, fact or circumstance had occurred, arisen or existed on or prior to the date of this Agreement; (iii) any material breach of any covenant or obligation of the Company; and (iv) any event, condition, fact or circumstance that would make the timely satisfaction of any of the conditions set forth in Article VIII impossible or unlikely or that would, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect. Without limiting the generality of the foregoing, the Company shall promptly advise Parent in writing of any (i) Legal Proceeding or material claim threatened, commenced or asserted against or with respect to any of the Acquired Companies, (ii) commencement of an involuntary case against any Acquired Company or the filing of an involuntary petition seeking bankruptcy, winding up, dissolution, liquidation, administration, moratorium, reorganization or other relief in respect of such Acquired Company or its debts, or of a substantial part of its assets, under any federal, state or foreign bankruptcy, insolvency, administrative, receivership or similar law now or hereafter in effect or (iii) occurrence of any default under, and as defined in, the Bank of America Facility or the KKR Facility or the occurrence of any Specified Default Event. No notification given to Parent pursuant to this Section 7.1(d) shall limit or otherwise affect any of the representations, warranties, covenants or obligations of the Company contained in this Agreement or any of the remedies available to Parent hereunder.
Appears in 2 contracts
Samples: Merger Agreement (Willbros Group, Inc.\NEW\), Merger Agreement (Primoris Services Corp)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless Parent shall otherwise consent approve in writing, which consent shall not unreasonably be withheld, and except as otherwise expressly contemplated by this Agreement or as set forth in this Agreement):
(ai) the business of it and its Subsidiaries Subsidiaries' businesses shall be conducted in the ordinary and usual course and(it being understood and agreed that nothing contained herein shall permit the Company to enter into or engage in (through acquisition, to product extension or otherwise) the extent consistent therewith, business of selling any products or services materially different from existing products or services of the Company and its Subsidiaries or entering into or engaging in new lines of business);
(ii) it and its Subsidiaries shall use their respective commercially reasonable best efforts to preserve its their business organization organizations intact and maintain its their existing relations and goodwill with customers, vendors, suppliers, distributors, strategic partners, creditors, lessors, regulators, employees and business associates;
(biii) it shall not (iA) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (iiB) amend its certificate articles of incorporation or by-lawslaws or adopt any rights agreement or similar agreement; (iiiC) other than in the case of wholly-owned subsidiaries, split, combine or reclassify its outstanding shares of capital stock; (ivD) authorize, declare, set aside or pay any dividend or other distribution payable in cash, stock or property in respect of any capital stock, stock other than dividends from its direct or indirect wholly-wholly owned Subsidiaries; or (vE) purchaserepurchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(civ) neither it nor any of its Subsidiaries shall (iA) issue, sell, pledge, dispose of or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debtof, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class, Rights, any Voting Debt class or any other property or assets assets; (B) other than shares in the ordinary and usual course of Company Common Stock and associated Rights issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans); or (ii) business, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire of or encumber any material other property or material assets (including capital stock of any of its Subsidiaries) or businessincur or modify any material indebtedness or other liability, except for immaterial Liens arising by operation of law; (C) make or authorize or commit to any capital expenditures other than as set forth in Section 6.1(a)(iv)(C) of the Company Disclosure Letter; or (D) make any acquisition of, or investment in, assets or stock of any other Person;
(dv) neither it nor any of its Subsidiaries shall restructureterminate, recapitalizeestablish, reorganize adopt, enter into, make any new grants or completely or partially liquidate or adopt a plan of complete or partial liquidation awards under, amend or otherwise enter into modify, any agreement Compensation and Benefit Plans except as required by Law or arrangement imposing material changes increase the salary, wage, bonus or restrictions on the operation other compensation of its assets or businesses or adopt resolutions providing any employees except increases for or authorizing any employees who are not executive officers of the foregoingCompany occurring in the ordinary and usual course of business (which shall include normal periodic performance reviews and related compensation and benefit increases);
(evi) neither it nor any of its Subsidiaries shall acquire pay, discharge, settle or satisfy any claims, liabilities or obligations (i) by merging absolute, accrued, asserted or consolidating withunasserted, contingent or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, except purchases of inventory and raw materials in the ordinary course of business (or as permitted by Section 7.1(gotherwise), whether or not material);
(f) neither it nor any of its Subsidiaries shall (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business), (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company payment, discharge or any satisfaction of its direct claims, liabilities or indirect wholly owned Subsidiaries, or (iv) other than obligations in the ordinary and usual course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(g) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters);
(h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measures;
(l) neither it nor any of its Subsidiaries shall make or rescind change any material Tax election, amend settle any material audit, file any amended Tax Return Returns or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled canceled or terminated, in each case terminated except in a manner consistent with past practice or as required by applicable Lawthe ordinary and usual course of business;
(mviii) other than with neither it nor any of its Subsidiaries shall enter into any Contract containing any provision or covenant limiting in any respect the ability of the Company or any of its Subsidiaries or any of their "AFFILIATES" (as defined in Rule 12b-2 under the Exchange Act) to (A) sell any products or services of or to any actions permitted under Section 7.2other Person, (B) engage in any line of business (including geographic limitations) or (C) compete with or obtain products or services from any Person, or limiting the ability of any Person to provide products or services to the Company or any of its Subsidiaries or their Affiliates;
(ix) neither it nor any of its Subsidiaries will terminate, or amend, or modify in any material respect, any Material Company Contract;
(x) neither it nor any of its Subsidiaries shall take any action or omit to take any action that is reasonably likely would cause any of its representations and warranties herein to result become untrue in any of the conditions to the Merger set forth in Article VIII not being satisfiedmaterial respect; and
(nxi) neither it nor any of its Subsidiaries will authorize any of, or commit, resolve or agree, in writing or otherwise, enter into an agreement to take, do any of the foregoing actions; provided, however, that nothing contained in foregoing.
(b) During the period from the date of this Agreement shall give to through the Effective Time, (i) as requested by Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exerciseconfer on a regular basis with one or more representatives of Parent with respect to material operational matters, consistent with (ii) upon the terms knowledge of the executive officers of the Company of any event or occurrence that is reasonably likely to result in a Company Material Adverse Effect, any material litigation or material governmental complaints, investigation or hearings (or communications indicating that the same may be contemplated), the breach in any material respect of any representation, warranty or covenant contained herein, or the failure of any condition precedent to the Merger, the Company shall promptly notify Parent thereof and conditions (iii) upon the knowledge of this Agreementthe executive officers of Parent of any event or occurrence that is reasonably likely to result in a Parent Material Adverse Effect or the failure of any condition precedent to the Merger, complete control and supervision of its and its Subsidiaries’ operationsParent shall promptly notify the Company thereof.
Appears in 2 contracts
Samples: Agreement and Plan of Reorganization and Merger (Medical Resources Management Inc), Agreement and Plan of Reorganization and Merger (Emergent Group Inc/Ny)
Interim Operations. The Company covenants and agrees as to itself ------------------ and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless Parent shall otherwise consent approve in writing, which consent approval shall not be unreasonably be withheldwithheld or delayed, and except as otherwise expressly contemplated by this Agreement or as set forth in this Agreement):
(a) the business of it and its Subsidiaries shall be conducted in the ordinary and usual course consistent with past practices and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, strategic partners, creditors, lessors, employees and business associates;
(b) it shall not not, (i) issue, sell, pledge, sell or otherwise dispose of or encumber any capital stock owned by it in subject to Lien (other than Permitted Liens) any of its Subsidiaries' Capital Stock owned by it; (ii) amend its certificate of incorporation charter, bylaws or, except for any amendment which will not hinder, delay or by-lawsmake more costly to Parent the Offer or the Merger; (iii) other than in the case of wholly-owned subsidiaries, split, combine or reclassify its outstanding shares of capital stockCapital Stock; (iv) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, other than dividends from its direct or indirect wholly-owned SubsidiariesCapital Stock; or (v) purchaserepurchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, acquire or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock Capital Stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stockCapital Stock; or (vi) adopt a plan of complete or partial liquidation or dissolution, merger or otherwise restructure or recapitalize or consolidate with any Person other than Merger Sub or another wholly-owned Subsidiary of Parent;
(c) neither it nor any of its Subsidiaries shall (i) authorize for issuance or issue, sell, pledge, sell or otherwise dispose of or encumber subject to any Lien (Aother than Permitted Liens) any shares of its capital stock of any class, Rights or any Voting Debtof, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock Capital Stock of any class, Rights, class or any Voting Debt or any other property or assets (other than shares of Company Common Stock and associated Rights Shares issuable pursuant to options and other stock-based awards Company Options outstanding on the date hereof under the Company Stock Planshereof); or (ii) other than in the ordinary and usual course of business consistent with past practices, transfer, lease, license, guarantee, sellsell or otherwise dispose of or subject to any Lien (other than Permitted Liens) any other property or assets or incur or modify any material indebtedness or other liability (except for additional borrowings in the ordinary course under lines of credit in existence on the date hereof); (iii) assume, mortgageguarantee, pledgeendorse or otherwise become liable or responsible (whether directly, dispose contingently or otherwise) for the obligations of any other Person except in the ordinary course of business consistent with past practices and except for obligations of Subsidiaries of the Company incurred in the ordinary course of business; (iv) make any loans to any other Person (other than to Subsidiaries of the Company or, customary loans or advances to employees in connection with business-related travel in the ordinary course of business consistent with past practices); or (v) make any commitments for, make or authorize any capital expenditures other than in amounts less than $50,000 individually and $250,000 in the aggregate or, by any means, make any acquisition of, abandonor investment in, cancel, surrender assets or allow to lapse or expire or encumber any material property or material assets (including capital stock of any of its Subsidiaries) or businessother Person;
(d) except as may be required to comply with applicable law or by existing contractual commitments, neither it nor any of its Subsidiaries shall restructure, recapitalize, reorganize or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise (i) enter into any new agreements or commitments for any severance or termination pay to, or enter into any employment or severance agreement or arrangement imposing material changes or restrictions on the operation with, any of its assets directors, officers or businesses employees or adopt resolutions providing consultants except for or authorizing any (a) specific arrangements with 13 of the foregoingCompany's employees, including one of its directors, which have been previously disclosed to Parent and (b) reasonable severance payments made to employees in the ordinary course of business and consistent with past practices, or (ii) terminate, establish, adopt, enter into, make any new grants or awards under, amend or otherwise modify, any Compensation and Benefit Plan or increase or accelerate the salary, wage, bonus or other compensation of any employees or directors (except for increases occurring in the ordinary and usual course of business, which shall include normal periodic performance reviews and related compensation and benefit increases, but not any general across-the-board increases) or consultants or pay or agree to pay any pension, retirement allowance or other employee benefit not required by any existing Compensation and Benefit Plan;
(e) neither it nor any of its Subsidiaries shall acquire (i) by merging shall, except as may be required as a result of a change in law or consolidating within GAAP, or by purchasing all or a substantial portion change any of the assets of accounting principles or any stock of, or practices used by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, except purchases of inventory and raw materials in the ordinary course of business (or as permitted by Section 7.1(g), whether or not material)it;
(f) neither it nor any of its Subsidiaries shall (i) incur revalue in any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business), (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or respect any of its Subsidiariesmaterial assets, guarantee any debt securities including writing down the value of another Personinventory or writing-off notes or accounts receivable, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange ratesbusiness consistent with past practices;
(g) neither it nor any of its Subsidiaries shall make settle or compromise any capital expenditures material claims or other expenditures with respect to propertylitigation or terminate or materially amend or modify any of its material Contracts or waive, plant release or equipment in excess of $10 million per quarter in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in assign any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters)material rights or claims;
(h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measures;
(l) neither it nor any of its Subsidiaries shall make or rescind any material Tax election, amend any material Tax Return election or permit any insurance policy naming it as a beneficiary or loss-loss- payable payee to be cancelled canceled or terminated, in each case except in a manner consistent with past practice or as required by applicable Law;
(mi) other than with respect to any actions permitted under Section 7.2, neither it nor any of its Subsidiaries shall take any action or omit to take any action that is reasonably likely would cause any of its representations and warranties herein to result become untrue in any of the conditions to the Merger set forth in Article VIII not being satisfiedmaterial respect; and
(nj) neither it nor any of its Subsidiaries will authorize or enter into any of, or commit, resolve or agree, in writing or otherwise, agreement to take, do any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operationsforegoing.
Appears in 2 contracts
Samples: Merger Agreement (Fluor Daniel Gti Inc), Merger Agreement (International Technology Corp)
Interim Operations. The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless Parent shall otherwise consent approve in writing, writing (which consent approval shall not be unreasonably be withheld, withheld or delayed) and except as otherwise expressly contemplated by this Agreement or as set forth in this AgreementSection 6.1 of the Company Disclosure Letter):
(a) the business of it and its Subsidiaries shall be conducted in the ordinary course consistent with past practice, and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable efforts to (i) preserve its present business organization intact and substantially intact, (ii) maintain its existing relations and goodwill with customers, suppliers, distributors, strategic partners, creditors, lessors, employees employees, business associates and other third parties with which the Company has material business associatesrelations consistent with past practice, (iii) keep available the services of its current officers and key employees, and (iv) maintain in effect all material foreign, federal, state and local licenses, approvals and authorizations, including without limitation, all material licenses and permits that are required for the Company or any of its Subsidiaries to carry on its business;
(b) it shall not, and shall not permit any of its Subsidiaries to, and shall not commit to, (i) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (ii) amend its certificate of incorporation or by-lawslaws or term of any outstanding security of the Company or its Subsidiaries; (iii) other than in the case of wholly-owned subsidiaries, split, combine or reclassify its outstanding any shares of capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock, of the Company or any less-than-wholly-owned Subsidiary of the Company; (iv) declare, set aside or pay any dividend payable in cash, stock or property or make any other actual, constructive or deemed distribution (whether in cash, stock or property or any combination thereof) in respect of any capital stock, other than dividends from its by a direct or indirect wholly-owned SubsidiariesSubsidiary of the Company to its parent; or (v) purchase, redeem or otherwise acquire, except for the acquisition or modify or amend, or offer to redeem, purchase or otherwise acquire, or modify or amend, any Company equity or equity related securities or any equity or equity related securities of shares of Company Common Stock from holders of Company Stock Options in full or partial payment any of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock OptionsCompany’s Subsidiaries;
(c) it shall not, or and shall not permit any of its Subsidiaries to purchase to, and shall not commit to, offer, issue or otherwise acquiresell, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(c) neither it nor any of its Subsidiaries shall (i) issue, sell, pledge, dispose of or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debtof, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class, Rightsexcept that the Company may (i) issue up to 20,000 Shares pursuant to the Company’s Amended and Restated Employee Qualified Stock Purchase Plan dated November 13, any Voting Debt or any other property or assets 1998, (other than shares ii) issue Shares upon exercise of Company Common Stock and associated Rights issuable pursuant to options and other stock-based awards Options outstanding on the date hereof under or hereafter granted in accordance with the provisions of subclause (iii) of this clause (c) or pursuant to the Company Stock Plans); Warrants, or (iiiii) grant Company Options to purchase up to an aggregate of 57,500 Shares to non-employee directors for their attendance at board meetings, in accordance with the terms of the Directors Plan as in effect on the date hereof and consistent with past practice and with an exercise price per Share no less than the fair market value of a Share as of the date of grant;
(d) it shall not, and shall not permit any of its Subsidiaries to, and shall not commit to, (i) other than in the ordinary and usual course of business consistent with past practice, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire of or encumber any material property or material assets (including capital stock of any of its Subsidiaries) or business;
(d) neither it nor any of its Subsidiaries shall restructure, recapitalize, reorganize or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the operation of its assets or businesses or adopt resolutions providing for or authorizing any of the foregoing;
(e) neither it nor any of its Subsidiaries shall acquire (i) by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or Company); (ii) without prior written notice to Parent, make, authorize or commit or agree to make any capital expenditures or any obligations or liabilities in respect thereof, except for those which do not exceed $10,000; (iii) make, authorize or commit or agree to make any capital expenditures or any obligations or liabilities in respect thereof, except for those which do not exceed $25,000; (iv) acquire or propose to acquire (whether by merger, consolidation, purchase of equity or assets or otherwise) any assets that are material, individually or stock of or other interest in the aggregate, to the Company and any of its Subsidiaries, taken as a wholeother Person or entity, except purchases in connection with capital expenditures permitted hereunder and except for acquisitions of inventory and raw materials other assets in the ordinary course of business; (v) make any loans, advances or capital contributions to, or investments in, any other Person (other than loans (not prohibited under Section 13(k) of the Exchange Act) to employees in the ordinary course of business consistent with past practice not to exceed $5,000 to any individual or $50,000 in the aggregate) or investments by the Company or a wholly-owned Subsidiary of the Company to or in the Company or any wholly-owned Subsidiary of the Company, or incur (including by drawing upon the Company’s existing line of credit) or as permitted by Section 7.1(g), whether or not material);
(f) neither it nor adversely modify any of its Subsidiaries shall (i) incur any indebtedness Indebtedness for borrowed money money, or guarantee any such indebtedness Indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business)Person, (ii) issue, issue or sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoingforegoing (or incur or modify any other material liability), (iiivi) make terminate, cancel or request any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions toadverse change in, or investment agree to any adverse change in, any other Person, other than Material Contract to which the Company or any of its direct or indirect wholly owned SubsidiariesSubsidiaries is a party, or (iv) other than in the ordinary course waive, release or assign any material rights, claims of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect benefits of the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(g) neither it nor any of its Subsidiaries shall make any capital expenditures or thereunder, (vii) other expenditures with respect to property, plant or equipment in excess of $10 million per quarter in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters);
(h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Timenew Contract, or modify or amend in a manner adverse fail to the Company or use reasonable business efforts to renew any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix)Contract, or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by a party, which is material to the Company and its Subsidiaries taken as a whole; (viii) enter into any non-competition Contracts or subjectother Contracts that purport to limit in any respect either the type of business in which it (or, after giving effect to the Merger, Parent or its Subsidiaries) may engage or the manner or locations in which any of them may so engage in any business; (ix) enter into any partnership, joint venture, strategic alliance, revenue or profit sharing agreement or similar arrangement with any Person; or (x) change or modify its line of business from the line of business in which it is engaged as of the date hereof or enter into any new line of business;
(je) neither it nor shall not, and shall not permit any of its Subsidiaries shallto, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereofand shall not commit to, (i) except as otherwise requested by Parent pursuant to Section 7.11(c)terminate, take any action with respect toestablish, adopt, enter into, terminate make any new grants or awards under, amend or otherwise modify, any change Benefit Plans, except as provided in controlSection 6.1(c) and Section 6.10(a)(v), (ii) except in the ordinary course of business or as required by Law or the terms of any Benefit Plan, make any contribution to any existing Benefit Plan, (iii) grant any pension, retirement, severance, retention, welfare, incentive change of control or similar agreement, arrangement termination pay or benefit plan (excluding rights to any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant other service provider of the Company or any collective bargaining agreementof its Subsidiaries, or amend or modify the terms of any Company Option, except as required by Law, (iiiv) take any action with respect toincrease the salary, adoptwage, enter into, terminate bonus or amend any employment other compensation or severance agreement or arrangement for the benefit or welfare benefits of any current directors, officers or former directoremployees, officer, employee or consultantconsultants, except actions for (A) annual salary increases to non-executive employees made in the ordinary course of business consistent with respect past practice at the regularly scheduled times; provided that the aggregate dollar amount of such increases shall not exceed the corresponding amount for the calendar year 2003, and (B) subject to individual employment Section 6.1(c), the grant of options to non-employee directors of the Company pursuant to the Directors Plan, or severance agreements for employees below (v) make payments or distributions (other than normal salaries) to or enter into any transaction with any affiliate of the level of Vice PresidentCompany, (iiivi) increase enter into any consulting agreement (A) with any consultant (other than surgeon consultants) providing for payments in excess of $50,000, or (B) with any respect surgeon consultant regardless of the amount of payments to be made thereunder, (vii) accelerate the payment of compensation or fringe benefits of, or pay any bonus to, to any director, officer, employee or consultant, except increases as required by applicable Law, agreements in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for effect as of the date of this Agreement under any Company Benefit Planor Section 6.10(a).
(f) it shall not, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) and shall not prevent the Company or permit any of its Subsidiaries from to, and shall not commit to, (xi) prior to consulting with Parent, commence any litigation or arbitration proceeding or any regulatory or other governmental action or proceeding with or before any Governmental Entity other than ordinary contract and commercial litigation that the Closing DateCompany does not reasonably expect to result in total costs to the Company in excess of $300,000, paying awards under (ii) waive, release or assign any material rights or claims, or (iii) pay, discharge, settle, compromise or satisfy any claims, liabilities or obligations (absolute, accrued, contingent, asserted, unasserted or otherwise), other than the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above payment, discharge, settlement, compromise or satisfaction, in the ordinary course of business consistent in amount and consistent kind with past practices as to practice, of claims, liabilities or obligations reflected in the approval of such awards and Company’s most recent financial statements (including the timing of such payments, to notes thereto) filed with the extent the performance standards and targets set for 2006 have been satisfied, and (y) Company Filed Reports prior to the Closing Date, establishing (with date hereof or incurred since the input date of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than such financial statements in the ordinary course of business consistent with past practice); provided;
(g) it shall not, howeverand shall not permit any of its Subsidiaries to, that notwithstanding any other provision and shall not commit to, change its (i) methods or principles of accounting in effect at the Audit Date, except as required by changes in GAAP after the date of this Agreement, neither the Company nor any of as concurred by its independent public accountants, or as required by applicable Law or by a Governmental Entity or (ii) fiscal year;
(h) it and its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time use commercially reasonable efforts to keep in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places place any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measures;
(l) neither it nor any of its Subsidiaries shall make or rescind any material Tax election, amend any material Tax Return or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, in each case except in a manner consistent with past practice or as required by applicable Law;payee; and
(mi) other than with respect to any actions permitted under Section 7.2it shall not, neither it nor and shall not permit any of its Subsidiaries shall take any action to, agree, authorize, commit to do, enter into an agreement to do or omit publicly announce an intention to take any action that is reasonably likely to result in do any of the conditions to the Merger set forth in Article VIII not being satisfied; and
(n) neither it nor any of its Subsidiaries will authorize any of, or commit, resolve or agree, in writing or otherwise, to take, any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operationsforegoing.
Appears in 2 contracts
Samples: Merger Agreement (Biomet Inc), Merger Agreement (Interpore International Inc /De/)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless Parent shall otherwise consent in writing, writing (which consent shall not be unreasonably be withheld, withheld or delayed) and except as otherwise expressly contemplated by this Agreement or as set forth in this AgreementAgreement or the corresponding subsection of Section 3.1(a) of the Company Disclosure Letter):
(ai) the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and each of its Subsidiaries shall use their its respective commercially reasonable best efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, strategic partners, creditors, lessors, employees and business associates;
(bii) it shall not (iA) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (iiB) amend its certificate of incorporation or by-lawsOrganizational Documents; (iiiC) other than in the case of wholly-any direct or indirect, wholly owned subsidiariesSubsidiary, split, combine or reclassify its outstanding shares of capital stock; (ivD) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, stock other than dividends from its direct or indirect wholly-wholly owned Subsidiaries; or (vE) purchaserepurchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(ciii) neither it nor any of its Subsidiaries shall (iA) issue, sell, pledge, dispose of or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debtof, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class, Rights, class or any Company Voting Debt or any other property or assets (other than shares of Company Common Stock and associated Rights Shares issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Option Plans); (B) other than products sold to customers in the ordinary and usual course of business (without limitation as to dollar amount) or (ii) otherwise in the ordinary and usual course of business and not in an aggregate amount of more than $5,000,000, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire of or encumber any material other property or material assets (including capital stock of any of its Subsidiaries); (C) incur or business;
modify any indebtedness other than (dx) neither it nor any of indebtedness existing solely between the Company and its wholly owned Subsidiaries shall restructure, recapitalize, reorganize or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the operation of its assets or businesses or adopt resolutions providing for or authorizing any of the foregoing;
(e) neither it nor any of its between such wholly owned Subsidiaries shall acquire (i) by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (iiy) indebtedness in an aggregate amount less than $30,000,000; provided, however, that prior to incurring any assets indebtedness, if practicable, the Company shall provide Parent with a reasonable right of consultation; provided, further, that are materialthe foregoing right of consultation shall not apply in the case of indebtedness in respect of letters of credit, individually guarantees or performance bonds or indebtedness existing solely between the Company and its wholly owned Subsidiaries or between such wholly owned Subsidiaries; (D) except as approved by the Transition Team, make or authorize or commit for any capital expenditures which, individually, is in excess of $1,000,000 or, in the aggregate, to the Company are in excess of $10,000,000; and any of its Subsidiaries(E) except as otherwise provided in clause (D) immediately above and other than raw materials, taken as a whole, except purchases of supplies and other inventory and raw materials items acquired in the ordinary and usual course of business consistent with past practice, by any means, make any acquisitions of, or investments in stock of (or as permitted by Section 7.1(g), whether other interest in) or not material)assets of any other Person;
(fiv) neither it nor any of its Subsidiaries shall (iA) incur terminate, establish, adopt, enter into, make any indebtedness for borrowed money new grants or guarantee awards under, amend or otherwise modify, any such indebtedness Company Compensation and Benefit Plans except as required by any Laws or the terms of another Person (other than pursuant to the Credit Agreement in the ordinary course of business)applicable collective bargaining agreements, (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (ivB) other than in the ordinary and usual course of business consistent with past practice and the Company’s compensation budget with respect to employees at an annual compensation level of less than $150,000, increase the compensation of any employee or (C) except as approved by the Transition Team, hire any employee at an annual compensation level expected to be more than $100,000;
(v) except in the ordinary and usual course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(g) neither it nor any of its Subsidiaries shall make settle or compromise any capital expenditures material claims or other expenditures with respect to propertylitigation or modify, plant amend or equipment in excess terminate any of $10 million per quarter in the aggregate for the Company and its Subsidiariesmaterial Contracts or waive, taken as a whole (it being understood that if capital expenditures in release or assign any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters)material rights or claims;
(hvi) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles Tax election or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign file any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measures;
(l) neither it nor any of its Subsidiaries shall make or rescind any material Tax election, amend any material income Tax Return or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, in each case except in a manner consistent inconsistent with past practice or implement or adopt any change in its accounting principles or material accounting practices, in all cases other than as may be required by applicable LawLaw or by Canadian GAAP;
(mvii) other than with respect to any actions permitted under Section 7.2, neither it nor any of its Subsidiaries shall take any action or omit to take any action that is it reasonably likely expects would cause any of its representations and warranties herein to result become untrue in any of the conditions to the Merger set forth in Article VIII not being satisfiedmaterial respect; and
(nviii) neither it nor any of its Subsidiaries will authorize or enter into an agreement to do any of the foregoing.
(b) Parent covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless the Company shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed) and except as otherwise expressly set forth in this Agreement or the corresponding subsection of Section 3.1(b) of the Parent Disclosure Letter):
(i) the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and each of its Subsidiaries shall use its respective reasonable best efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, creditors, lessors, employees and business associates;
(ii) it shall not (A) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (B) except as provided in Section 3.19, amend its Organizational Documents or amend, modify or terminate the Parent Rights Agreement; (C) other than in the case of any direct or indirect, wholly owned Subsidiary, split, combine or reclassify its outstanding shares of capital stock; (D) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock other than (x) dividends from its direct or indirect wholly owned Subsidiaries and (y) regular quarterly cash dividends in respect of Parent Common Stock, not in excess of $0.26 per share per quarter, with declaration and record dates consistent with past practice; or (E) repurchase, redeem or otherwise acquire, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(iii) neither it nor any of its Subsidiaries shall (A) issue, sell, pledge, dispose of or encumber any shares of, or commitsecurities convertible into or exchangeable or exercisable for, resolve or agreeoptions, in writing warrants, calls, commitments or otherwise, rights of any kind to takeacquire, any shares of its capital stock of any class or any Parent Voting Debt (other than Parent Common Stock issuable under the foregoing actionsParent Stock Plans); (B) other than (x) as Parent deems reasonably necessary to obtain the consent, approval or authorization of any Governmental Entity in order to consummate the transactions contemplated by this Agreement and the Arrangement, (y) products sold to customers in the ordinary and usual course of business (without limitation as to dollar amount) or (z) otherwise in the ordinary and usual course of business and not in an aggregate amount of more than $5,000,000, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber any other property or assets (including capital stock of any of its Subsidiaries); (C) incur or modify any indebtedness other than (x) commercial paper, (y) indebtedness existing solely between Parent and its wholly owned Subsidiaries or between such wholly owned Subsidiaries or (z) indebtedness in an aggregate amount less than $30,000,000; provided, however, that nothing contained prior to incurring any indebtedness, if practicable, Parent shall provide the Company with a reasonable right of consultation; provided, further, that the foregoing right of consultation shall not apply in this Agreement the case of indebtedness in respect of commercial paper, letters of credit, guarantees or performance bonds or indebtedness existing solely between Parent and its wholly owned Subsidiaries or between such wholly owned Subsidiaries; (D) except as approved by the Transition Team, make or authorize or commit for any capital expenditures which, individually, is in excess of $1,000,000 or, in the aggregate, are in excess of $10,000,000; and (E) except as otherwise provided in clause (D) immediately above and other than raw materials, supplies and other inventory items acquired in the ordinary and usual course of business consistent with past practice, by any means, make any acquisitions of, or investments in stock of (or other interest in) or assets of any other Person;
(iv) neither it nor any of its Subsidiaries shall give (A) terminate, establish, adopt, enter into, make any new grants or awards under, amend or otherwise modify, any Parent Compensation and Benefit Plans except as required by any Laws or the terms of applicable collective bargaining agreements, (B) other than in the ordinary and usual course of business consistent with past practice and Parent’s compensation budget with respect to Parentemployees at an annual compensation level of less than $150,000, directly increase the compensation of any employee or indirectly(C) except as approved by the Transition Team, hire any employee at an annual compensation level expected to be more than $100,000;
(v) except in the ordinary and usual course of business, neither it nor any of its Subsidiaries shall settle or compromise any material claims or litigation or modify, amend or terminate any of its material Contracts or waive, release or assign any material rights or claims;
(vi) neither it nor any of its Subsidiaries shall make any material Tax election or file any material income Tax Return inconsistent with past practice or implement or adopt any change in its accounting principles or material accounting practices, in all cases other than as may be required by applicable Law or by U.S. GAAP;
(vii) neither it nor any of its Subsidiaries shall take any action or omit to control take any action that it reasonably expects would cause any of its representations and warranties herein to become untrue in any material respect; and
(viii) neither it nor any of its Subsidiaries will authorize or direct the operations enter into an agreement to do any of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operationsforegoing.
Appears in 2 contracts
Samples: Combination Agreement (Donnelley R R & Sons Co), Combination Agreement (Moore Wallace Inc)
Interim Operations. The Company ICE and NYBOT each covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms (unless Parent ICE (in the case of NYBOT) or NYBOT (in the case of ICE) shall otherwise consent approve in writing, which consent shall not unreasonably be withheld, and except as otherwise expressly contemplated by this Agreement or or, in the case of NYBOT, except as otherwise set forth in this AgreementSection 6.1 of the NYBOT Disclosure Letter or, in the case of ICE, except as otherwise set forth in Section 6.1 of the ICE Disclosure Letter):
(a) the business of it and its Subsidiaries shall be conducted in the ordinary and usual course consistent with past practice and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable best efforts to preserve its business organization intact and maintain its existing relations and goodwill with all Governmental Entities, Self-Regulatory Organizations, providers of order flow, customers, suppliers, distributors, strategic partners, creditors, lessors, employees and Employees, business associates, Members and stockholders, as appropriate;
(b) it shall not (i) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (ii) amend its certificate of incorporation or by-laws; (iii) other than in the case of wholly-owned subsidiaries, split, combine or reclassify its outstanding shares of capital stock; (iv) declare, set aside or pay any dividend type of dividend, whether payable in cash, stock or property property, in respect of any Membership Interests or capital stock, as appropriate, other than than, in the case of ICE, dividends from its payable by direct or indirect wholly-wholly owned Subsidiaries; Subsidiaries of ICE to ICE or (v) purchaseother direct or indirect wholly owned Subsidiaries of ICE and, redeem or otherwise acquirein the case of NYBOT, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price dividends payable by such holder upon exercise direct or indirect wholly owned Subsidiaries of Company Stock Options NYBOT to NYBOT or other direct or indirect wholly owned Subsidiaries of NYBOT; Table of Contents
(c) in the extent required or permitted under the terms case of such Company Stock OptionsNYBOT, or permit any of neither it nor its Subsidiaries to purchase or otherwise acquireshall:
(i) issue any new Membership Interests, any shares of its other membership interests, capital stock or any securities convertible into or exchangeable or exercisable for any membership interests or shares of its capital stock, Trading Rights, other trading permits or trading rights, or any lease rights;
(cii) neither it nor any of its Subsidiaries shall (i) issue, sell, pledge, dispose of or encumber (A) encumber, split, combine or reclassify, or repurchase, redeem or acquire any shares of its outstanding Membership Interests, other membership interests, capital stock of any class, Rights or any Voting Debt, or (B) securities convertible into or exchangeable or exercisable forfor any membership interests or shares of capital stock, Permits, Trading Rights, other trading permits or trading rights, or optionsany lease rights;
(iii) make any structural changes to NYBOT Clearing Corporation, warrantsagree to (other than in the ordinary course of business) list or clear any additional products or markets, callschange its risk policies or reduce its guaranty fund, commitments liquidity or rights credit resources;
(iv) except as required by applicable Law or as set forth on Section 6.1(c)(iv) of the NYBOT Disclosure Letter, (A) terminate, establish, adopt, enter into, make any kind to acquirenew grants or awards under, amend or otherwise modify, any shares of its capital stock of any classNYBOT Benefit Plan, Rightsas the case may be, any Voting Debt or any other property or assets (other than shares of Company Common Stock and associated Rights issuable pursuant to options and other stock-based awards outstanding arrangement that would be a NYBOT Benefit Plan if in effect on the date hereof under the Company Stock Plans); hereof, or (iiB) increase the salary, wage, bonus, pension, welfare, severance or other compensation of any employees or fringe benefits of any director, officer or employee or enter into any contract, agreement, commitment or arrangement to do any of the foregoing, except increases occurring in the ordinary and usual course of business consistent with past practice, or (C) provide for the grant of any stock option, restricted stock, restricted stock unit or other equity-related award, or (D) pay any change of control or severance benefits to any NYBOT director or Employee in connection with the Merger, or grant or provide for any severance, change in control or termination payments or benefits to any director, officer or employee of NYBOT or any of its Subsidiaries, or (E) take any action to accelerate the vesting or payment, or fund or in any way secure the payment, of compensation or benefits under any NYBOT Benefit Plan, to the extent not already provided in the any such NYBOT Benefit Plan, or (F) change any actuarial or other assumptions used to calculate funding obligations with respect to the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP, or (G) establish, adopt, enter into or amend any collective bargaining agreement or (H) terminate any officer, other than for cause, in which case NYBOT shall promptly notify ICE of such termination;
(v) except in the ordinary and usual course of business consistent with past practice, settle or compromise any material claims or litigation or modify, amend or terminate any of its material Contracts or waive, release or assign any material rights or claims;
(vi) other than in the ordinary and usual course of business, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire of or encumber any other material property or material assets (including membership interests or capital stock of any of its Subsidiaries) or business;
(d) neither it nor any of its Subsidiaries shall restructure, recapitalize, reorganize or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the operation of its assets or businesses or adopt resolutions providing for or authorizing any of the foregoing;
(e) neither it nor any of its Subsidiaries shall acquire (i) by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, except purchases of inventory and raw materials in the ordinary course of business (or as permitted by Section 7.1(g), whether or not material);
(f) neither it nor any of its Subsidiaries shall (ivii) incur any additional material indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business), (ii) issue, sell or amend any debt securities or warrants or other rights to acquire liability or modify any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” material indebtedness or other agreement to maintain liability or modify any financial statement condition of another Person material indebtedness or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) liability other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(gviii) neither it nor any of its Subsidiaries shall make or authorize or commit to any capital expenditures (other than under its current business plan as disclosed to ICE prior to the date of this Agreement), acquisitions or other expenditures with respect to property, plant or equipment in excess types of $10 million per quarter in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters)non-ordinary-course transactions;
(h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (iiix) except for a platform license and service agreement with ICE, which shall provide that ICE shall license ICE’s electronic trading platform to the extent permitted by Section 7.2(a) NYBOT for a minimum period of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein 18 months from and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of after the date of this Agreement under any Company Benefit Planand that the costs of operation shall not exceed $3 million per year, (vi) and which shall contain such other than with respect to existing commitments commercially reasonable terms as of mutually agreed by ICE and NYBOT as soon as reasonably practicable after the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions (and in any benefit plans event within 45 days after the date of this Agreement) (the “Platform License Agreement”), enter into any agreement to trade any products on an Table of Contents electronic trading platform or agreements that would restrict NYBOT’s or awards made thereunder, or (vii) take its Subsidiaries’ ability to trade any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Planproduct on an electronic trading platform; provided, however, this Section 7.1(jif ICE and NYBOT are not able to reach agreement on the terms of the Platform License Agreement in accordance with the foregoing, NYBOT may, at its own expense, license an electronic trading platform from an alternate system vendor, provided that (A) such license agreement is terminable by NYBOT as of the Closing and (B) all costs associated with such license agreement from and after the Closing shall not prevent be deducted from the Company or any calculation of its Subsidiaries from the Closing Cash Amount;
(x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measures;
(l) neither it nor any of its Subsidiaries shall make or rescind change any material Tax election, amend change any material method of Tax Return accounting, file any materially amended Tax Return, or settle or compromise any material audit or proceeding relating to Taxes or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, in each case terminated except in a manner the ordinary and usual course of business;
(xi) permit any change in its credit practices or accounting principles, policies or practice (including any of its practices with respect to accounts receivable or accounts payable), except to the extent that any such changes in accounting principles, policies or practices shall be required by changes in GAAP;
(xii) enter into any “non-compete” or similar Contract that would restrict the business of the Surviving Corporation or any of its Affiliates following the Effective Time;
(xiii) except as permitted pursuant to Section 6.1(c)(iv) of the NYBOT Disclosure Letter, enter into any Contract between itself, on the one hand, or any of its Affiliates, employees, officers or directors, on the other hand;
(xiv) (A) amend or modify any of the NYBOT Organizational Documents or the NYBOT Subsidiary Organizational Documents, except for rule amendments or modifications that are consistent with past practice practice, that are not material and that would not become Core Rights (as defined in the Bylaws) or as required by applicable Law;
(mB) other than file with respect the CFTC any notice of such amendment or modification unless it shall simultaneously provide a written copy of such application to any actions permitted under Section 7.2, neither it nor any of its Subsidiaries shall take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VIII not being satisfiedICE; and
(nxv) neither it NYBOT nor any of its Subsidiaries will authorize any of, or commit, resolve or agree, in writing or otherwise, enter into an agreement to take, do any of the foregoing actions; provided, however, that nothing contained set forth in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with Sections 6.1(c)(i) – (xiv) if NYBOT would be prohibited by the terms and conditions of Sections 6.1(c)(i) – (xiv) from doing the foregoing. Notwithstanding anything to the contrary in this Agreement, complete control ICE shall have the right to agree to and supervision to consummate any acquisitions of another Person, including by agreeing to issue equity interests in ICE to such Person.
(d) In the case of NYBOT, it shall, and shall cause its Subsidiaries to, preserve their respective existing regulatory status in all jurisdictions, and shall not make any material change to their respective regulatory status in any jurisdiction.
(e) Prior to making any written or oral communications to the directors, officers or employees of NYBOT or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, NYBOT shall provide ICE with a copy of the intended communication, ICE shall have a reasonable period of time to review and its Subsidiaries’ operations.comment on the communication, and ICE and NYBOT shall cooperate in providing any such mutually agreeable communication
Appears in 2 contracts
Samples: Merger Agreement (Intercontinentalexchange Inc), Merger Agreement (Intercontinentalexchange Inc)
Interim Operations. The Except as expressly contemplated hereby, without the prior written consent of Omnipoint, the Company covenants shall conduct its business in all material respects in the ordinary course consistent with past practice and agrees use all reasonable efforts to: (i) preserve intact its present business organization; (ii) keep available the services of its officers; (iii) maintain in effect all material foreign, federal, state and local licenses, approvals and authorizations, including, without limitation, the Company FCC Licenses, all material licenses and permits that are required for the Company to carry on its business as currently conducted or proposed to itself be conducted; and (iv) preserve existing relationships with its Subsidiaries thatmaterial partners, after lenders, suppliers and others having material business relationships with it so that the business or prospects of the Company shall not be adversely affected in any material respect as of the Effective Time. Further, and without limiting the generality of the foregoing, from the date hereof and prior to until the Effective Time (unless Parent Time, without the prior written consent of Omnipoint, the Company shall otherwise consent in writing, which consent shall not unreasonably be withheld, and except as otherwise expressly contemplated by this Agreement or as set forth in this Agreement):not:
(a) the business of it and its Subsidiaries shall be conducted in the ordinary and usual course andsubject to Section 6.2, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, strategic partners, creditors, lessors, employees and business associates;
(b) it shall not (i) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (ii) amend its certificate of incorporation or by-laws; bylaws or other applicable governing instrument;
(iiib) other than in the case subject to Section 6.2, amend any term of wholly-owned subsidiaries, any of its outstanding securities;
(c) split, combine combine, subdivide or reclassify its outstanding any shares of its capital stock; (iv) stock or other equity interests or declare, set aside or pay any dividend payable or other distribution (whether in cash, stock or property or any combination thereof) in respect of any its capital stock, or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its securities, other than dividends from its direct or indirect wholly-owned Subsidiaries; or (v) purchase, redeem or otherwise acquire, except for the acquisition issuance of shares of Company Common Preferred Stock from holders as dividends on outstanding shares of Company Preferred Stock Options in full or partial payment as of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under date hereof in accordance with the terms of such the Company Stock Options, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stockPreferred Stock;
(cd) neither it nor any adopt a plan or agreement of its Subsidiaries shall complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other material reorganization;
(ie) subject to Section 6.2, issue, deliver or sell, pledgeor authorize the issuance, dispose of delivery or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debt, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquiresale of, any shares of its capital stock of any classclass or other equity interests or any securities convertible into or exercisable for, Rightsor any rights, warrants or options to acquire, any Voting Debt such capital stock or any other property or assets (equity interests, other than the issuance of shares of Company Common Preferred Stock and associated Rights issuable pursuant to options and other stock-based awards as dividends on outstanding on shares of Company Preferred Stock as of the date hereof under in accordance with the terms of the Company Stock Plans); or (ii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire or encumber any material property or material assets (including capital stock of any of its Subsidiaries) or businessPreferred Stock;
(df) neither it nor make any of its Subsidiaries shall restructurecapital expenditures, recapitalize, reorganize or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into any agreement or arrangement imposing material changes or restrictions on except for capital expenditures not exceeding $500,000 in the operation of its assets or businesses or adopt resolutions providing for or authorizing any of the foregoingaggregate;
(eg) neither it nor any of its Subsidiaries shall acquire (iby merger, consolidation, acquisition of stock or assets or otherwise) by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or partnership, other business organization or division thereof, licenses or (ii) other assets of any assets that are materialPerson, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, except purchases of inventory and raw materials in the ordinary course of business (or as permitted by Section 7.1(g), whether or not material);
(f) neither it nor any of its Subsidiaries shall (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business;
(h) sell, lease, license, encumber or otherwise transfer any assets (including any licenses);
(i) incur, (ii) issue, sell assume or amend guarantee any debt securities or warrants or Indebtedness other rights than pursuant to acquire any debt securities of agreements in effect on the date hereof and listed on the Company Disclosure Schedules;
(j) create, incur, assume or suffer to exist any Lien upon any of its Subsidiariesproperty, guarantee assets or revenues, whether now owned or hereafter acquired, other than Liens for Taxes that are not yet due, statutory liens or to secure Indebtedness or other obligations permitted by this Agreement;
(k) make any debt securities of another loan, advance or capital contributions to or investment in any Person, or acquire any Investment Interest;
(l) enter into any “keep well” contract or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoingagreement, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, or relinquish or amend in any material respect any material contract (as defined in Item 601(b)(1) of Regulation S-K of the SEC) to which the Company is a party, other than transactions and commitments contemplated by this Agreement;
(n) enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company that materially limits or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(g) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters);
(h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner otherwise materially adverse to Parent; provided, that, nothing herein shall permit restricts the Company or any of its Subsidiaries to (i) enter into Affiliates or any Contract of the type specified in Section 5.5(a)(viii) successor thereto or Section 5.5(a)(ix) to the extent such Contract would survive that could, after the Effective Time, limit or modify or amend in a manner adverse to restrict any of Omnipoint, the Company Surviving Corporation or any of its Subsidiaries Affiliates, from engaging in the business of providing wireless communications services or developing wireless communications technology anywhere in the world or otherwise from engaging in any existing Contract of the type specified in Section 5.5(a)(viiiother business;
(o) enter into any employment, deferred compensation or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or other similar agreement to which with any director or officer of the Company or with any of its Subsidiaries is bound by other Person; or subject;
(j) neither it nor establish or adopt any of its Subsidiaries shallcollective bargaining, except as required to comply with applicable Law or agreementsbonus, plans or arrangements existing on the date hereofprofit-sharing, (i) except as otherwise requested by Parent pursuant to Section 7.11(c)thrift, take any action with respect to, adopt, enter into, terminate or amend any change in controlpension, retirement, retentiondeferred compensation, welfarecompensation, incentive stock option, restricted stock or similar agreement, arrangement or other benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, covering any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs officer of the Company or any other Person; increase the compensation, bonus or other benefits payable to any director, or officer of the Company; or amend the terms of any outstanding option or right to purchase shares of Company Common Stock or other capital stock of the Company;
(p) change (1) its Subsidiaries methods of accounting or places accounting practices in any material restrictions on the ability respect, except as required by concurrent changes in GAAP or by law or (2) its fiscal year;
(q) acquire any Investment Interest;
(r) settle any material litigation, investigation, arbitration, proceeding or other claim;
(s) make any material tax election or enter into any settlement or compromise of any material tax liability;
(t) take any action, other than as expressly permitted by this Agreement, that would make any representation or warranty of the Company or hereunder inaccurate in any of its Subsidiaries to impose any labor saving or other cost reduction measures;material respect at the Effective Time; or
(lu) neither it nor any of its Subsidiaries shall make agree or rescind any material Tax election, amend any material Tax Return or permit any insurance policy naming it as a beneficiary or loss-payable payee commit to be cancelled or terminated, in each case except in a manner consistent with past practice or as required by applicable Law;
(m) other than with respect to any actions permitted under Section 7.2, neither it nor any of its Subsidiaries shall take any action or omit to take any action that is reasonably likely to result in do any of the conditions to the Merger set forth in Article VIII not being satisfied; and
(n) neither it nor any of its Subsidiaries will authorize any of, or commit, resolve or agree, in writing or otherwise, to take, any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operationsforegoing.
Appears in 2 contracts
Samples: Merger Agreement (East West Communications Inc), Merger Agreement (Omnipoint Corp \De\)
Interim Operations. The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless Parent shall otherwise consent in writing, which consent shall not unreasonably be withheldwithheld or delayed, and except as otherwise expressly set forth in or contemplated by this Agreement or as set forth in this Agreementdescribed on Section 7.1 of the Company Disclosure Schedule):
(a) the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, strategic partners, creditors, lessors, employees and business associates;
(b) it shall not (i) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (ii) amend its certificate of incorporation or by-laws; (iii) other than in the case of wholly-owned subsidiaries, split, combine or reclassify its outstanding shares of capital stock; (iv) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, stock other than dividends from its direct or indirect wholly-owned Subsidiaries; or (v) purchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(c) neither it nor any of its Subsidiaries shall (i) authorize, issue, sell, pledge, dispose of or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debtof, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind (including but not limited to any “rights or poison pill” agreement) to acquire, any shares of its capital stock of any class, Rights, or any Voting Debt or any other property or assets (other than shares of Company Common Stock and associated Rights rights issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans); or (ii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire or encumber any material property or material assets (including capital stock of any of its Subsidiaries) or business, except for such transactions conducted in the ordinary course of the Company or any Subsidiaries’ business;
(d) neither it nor any of its Subsidiaries shall restructure, recapitalize, reorganize or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the operation of its assets or businesses or adopt resolutions providing for or authorizing any of the foregoing;
(e) neither it nor any of its Subsidiaries shall acquire (i) by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, except purchases of inventory and raw materials in the ordinary course of business (or as permitted by Section 7.1(g), whether or not material);
(f) neither it nor any of its Subsidiaries shall (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business)Person, (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(g) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter 500,000 in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters)whole;
(h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to ParentLease; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix5.5(a)(iii) to the extent such Contract would survive after the Effective Time, Time or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii5.5(a)(iii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law Law, any express provision of this Agreement, or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any employment, severance, change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, consultant (except for annual increases of salaries of Persons who are not officers in the ordinary course of business given to employees below the level of Vice President on an individual basisthat do not exceed 3.5%), (iviii) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (viv) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (viv) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, or the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company it nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any matters reported as “Legal Proceedings” in any Company SEC Reports, or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practiceAgreement); provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measures;
(l) neither it nor any of its Subsidiaries shall make or rescind any material Tax election, amend any material Tax Return or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, terminated in each case except in a manner consistent with past practice or as required by applicable Law;
(m) other than with respect to any actions permitted under Section 7.2, neither it nor any of its Subsidiaries shall take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VIII not being satisfied; and
(n) neither it nor any of its Subsidiaries will authorize any of, or commit, resolve or agree, in writing or otherwise, to take, any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operations.
Appears in 2 contracts
Samples: Merger Agreement (Netopia Inc), Merger Agreement (Netopia Inc)
Interim Operations. The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless Parent shall otherwise consent approve in writing, which consent shall not unreasonably be withheld, writing and except as set forth in Schedule 7.1 hereof or as otherwise expressly contemplated by this Agreement or as set forth in this Agreement):
(a) the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable efforts best efforts, consistent with the limitations of this Article VII, to preserve its business organization substantially intact and maintain its existing relations and goodwill with customers, suppliers, distributors, strategic partners, creditors, lessors, employees and business associates;
(b) it shall not (i) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (ii) amend its certificate of incorporation or by-laws; (iii) other than in the case of wholly-owned subsidiaries, split, combine or reclassify its outstanding shares of capital stock; (iv) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, stock other than dividends from its direct or indirect wholly-wholly owned Subsidiaries; or (v) purchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(c) neither it nor any of its Subsidiaries shall (i) issue, sell, pledge, dispose of or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debtof, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class, Rights, class or any Voting Debt or any other property or assets (other than shares of Company Common Stock and associated Rights issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans); or (ii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire or encumber any material property or material assets (including capital stock of any of its Subsidiaries) or business other than licenses of Company Products entered into in the ordinary course of business;
(d) neither it nor any of its Subsidiaries shall restructure, recapitalize, reorganize or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the operation of its assets assets, product lines or businesses businesses, or its interests therein, or adopt resolutions providing for or authorizing any of the foregoing;
(e) neither it nor any of its Subsidiaries shall acquire (i) by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any material assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a wholebusinesses, except purchases of inventory and raw materials in the ordinary course of business (or as permitted by Section 7.1(g), whether or not material)business;
(f) neither it nor any of its Subsidiaries shall adopt or implement any stockholder rights plan, “poison pill” anti-takeover plan or other similar plan, device or arrangement that, in each case, is applicable to Parent or any of its Affiliates, the Agreement or any of the transactions contemplated by this Agreement;
(g) neither it nor any of its Subsidiaries shall (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement equipment lease borrowings in the ordinary course of business), (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine travel advances to employees of the Company and its Subsidiaries in the ordinary course of business, not exceeding $10,000 for any individual employee for any single trip and not exceeding $30,000 in the aggregate) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(gh) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter 100,000 in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if whole, other than as set forth in the Company’s budget for capital expenditures in any quarter are less than $10 million, the shortfall shall be previously made available to Parent or the specific capital expenditures disclosed in Section 7.1(h) of the Company to spend in future quarters)Disclosure Schedule;
(hi) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(ij) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to ParentContract; provided, thathowever, that nothing herein shall permit the Company or any of its Subsidiaries to (i1) enter into any Contract of the type specified in Section 5.5(a)(viii5.5(a)(iii) or (xiii) (excluding Section 5.5(a)(ix5.5(a)(xiii)(D) solely with respect to Company Products) to the extent such Contract would survive after the Effective Time, Time or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii5.5(a)(iii) or Section 5.5(a)(ix(xiii), or (ii2) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, waive delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(jk) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any employment (whether at will or otherwise), severance, change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iviii) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (viv) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (viv) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, or the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, except for option awards to purchase Company Common Stock that the Company expects to grant to certain new hires in the ordinary course of business as specifically set forth in Section 7.1(k) of the Company Disclosure Schedule which Schedule includes the maximum number of options issuable to such new hires or (viivi) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, ;
(l) except as otherwise contemplated by this Section 7.1(j) 7.1, neither it nor any of its Subsidiaries shall not prevent make any written or oral communications to the directors, officers or employees of the Company or any of its Subsidiaries from (x) prior pertaining to compensation or benefit matters that are affected by the Closing Datetransactions contemplated by this Agreement, paying awards under unless the 2006 Executive Incentive Plan Company provides Parent with a copy of the intended communication, Parent has a reasonable period of time to review and commissions to employees at comment on the level of Vice President communication, and above in the ordinary course of business and consistent with past practices as to the approval of such awards Parent and the timing of Company shall cooperate in providing any such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above)mutually agreeable communication;
(km) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company it nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than as set forth in Section 7.1(m) of the Company Disclosure Schedule or in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practiceAgreement); provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measures;
(ln) neither it nor any of its Subsidiaries shall make or rescind any material Tax election, amend any Tax Return, settle or otherwise finally resolve any material Tax Return tax controversy, or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, in each case terminated except in a manner consistent with past practice or as required by applicable Lawthe ordinary and usual course of business;
(mo) other than with respect to any actions permitted under Section 7.2, neither it nor any of its Subsidiaries shall take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VIII not being satisfied; and
(np) neither it nor any of its Subsidiaries will authorize any of, or commit, resolve or agree, in writing or otherwise, to take, any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operations.
Appears in 2 contracts
Samples: Merger Agreement (Computer Associates International Inc), Merger Agreement (Niku Corp)
Interim Operations. The Except as set forth in Section 6.1 of the Company Disclosure Letter, the Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless Parent shall otherwise consent approve in writing, which consent shall not unreasonably be withheld, and except as otherwise expressly contemplated by this Agreement or as set forth in this the Stock Option Agreement):
(a) the business of it its and its Subsidiaries Subsidiaries' businesses shall be conducted only in the ordinary and usual course and(it being understood and agreed that nothing contained herein shall permit the Company to enter into or engage in (through acquisition, product extension or otherwise) the business of selling any products or services materially different from existing products or services of the Company and its Subsidiaries or to enter into or engage in new lines of business (as such term is defined in the National Association of Insurance Commissioner's instructions for the preparation of the annual statement form) without Parent's prior written approval);
(b) to the extent consistent therewithwith (a) above, it and each of its Subsidiaries shall use their its respective commercially reasonable best efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, reinsurers, distributors, strategic partners, creditors, lessors, employees and business associates;
(bc) it shall not (i) issueamend any Governing Document or amend, sell, pledge, dispose of modify or encumber any capital stock owned by it in any of its Subsidiariesterminate the Rights Agreement; (ii) amend its certificate of incorporation or by-laws; (iii) other than in the case of wholly-owned subsidiaries, split, combine or reclassify its outstanding shares of capital stock; (iviii) authorize, declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, stock other than dividends from its direct or indirect wholly-wholly owned SubsidiariesSubsidiaries and other than regular quarterly dividends paid by the Company on its Common Shares not in excess of $0.18 per share, with usual record and payment dates and in accordance with the Company's past dividend policy; or (viv) purchaserepurchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(cd) neither it nor any of its Subsidiaries shall (i) issue, sell, pledge, dispose of or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debtof, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquireacquire any shares, any shares of its or any Subsidiary's capital stock of any class, Rights, any Voting Debt class or any other property or assets (other than shares of Company Common Stock and associated Rights Shares issuable pursuant to options and other stock-based awards outstanding on the date hereof under any of the Company Stock Plans); or (ii) other than in the ordinary and usual course of business, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire of or encumber any material other property or material assets (including capital stock of any of its Subsidiaries) or business;
incur or modify any material indebtedness or other liability; or (diii) neither it nor except as set forth in Section 6.1(d) of the Company Disclosure Letter, make or authorize or commit for any of its Subsidiaries shall restructurecapital expenditures, recapitalizeincluding entering into capital lease obligations, reorganize other than in amounts not exceeding $1,000,000 in the aggregate or, by any means, make any acquisition of, or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the operation of its investment in, assets or businesses stock of any other Person or adopt resolutions providing for entity, including by way of assumption reinsurance, in excess of $1,000,000 individually or authorizing any of $5,000,000 in the foregoingaggregate (other than in connection with ordinary course investment activities);
(e) neither it nor any of its Subsidiaries shall acquire (i) by merging terminate, establish, adopt, enter into, make any new grants or consolidating withawards under, amend or otherwise modify, any Compensation and Benefit Plans including the Stay Bonus Plan, or by purchasing all or a substantial portion of increase the assets of or any stock ofsalary, or by any other mannerwage, any business or any corporation, partnership, joint venture, limited liability company, association bonus or other business organization or division thereof, or (ii) compensation of any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, employees except purchases of inventory and raw materials increases occurring in the ordinary and usual course of business (which shall include normal periodic performance reviews and related compensation and benefit increases) or as permitted by Section 7.1(g)promote any employee into any of bands 1, whether 2, 3 or not material)4, or from one of such bands into another of such bands;
(f) neither it nor any of its Subsidiaries shall pay, discharge, settle or satisfy any claims, liabilities or obligations (i) incur any indebtedness for borrowed money absolute, accrued, asserted or guarantee any such indebtedness of another Person (unasserted, contingent or otherwise), other than pursuant to the Credit Agreement payment, settlement, discharge or satisfaction of claims, liabilities or obligations legally due and payable and arising in the ordinary and usual course of business), (ii) issueclaims arising under the terms of products, sell contracts or amend any debt securities or warrants or other rights to acquire any debt securities of policies issued by the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Insurance Subsidiaries in the ordinary and usual course of businessbusiness and such other claims, liabilities or obligations as shall not, subject to Section 5.1(a) or capital contributions to, or investment in, any other Person, other than of the Company or any of its direct or indirect wholly owned SubsidiariesDisclosure Letter, or (iv) other than exceed $2,000,000 in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange ratesaggregate;
(g) neither it nor any of its Subsidiaries shall make make, change or revoke any capital expenditures material Tax election, settle or compromise any material Tax liability arising in any audit, change its method of accounting if such change would have a material impact on Taxes, enter into any closing or other expenditures agreement with respect to propertya material amount of Taxes, plant file a request for refund of a material amount of Taxes (but not including the prosecution of any refund claim pending on the date hereof), or equipment file an amended Tax Return if such Tax Return is materially different from the original return to which it relates, except, in excess of $10 million per quarter each case, (i) in the aggregate for ordinary course of business and consistent with the Company and its SubsidiariesCompany's past practice in respect of the Tax at issue in the jurisdiction in question or (ii) with the consent of Parent, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall such consent not to be available to the Company to spend in future quarters)unreasonably withheld;
(h) neither it nor any of its Subsidiaries shall make enter into any agreement containing any provision or covenant limiting in any material changes respect the ability of the Company or any Subsidiary or affiliate to (i) sell any products or services of or to any other Person, (ii) engage in accounting methods, principles any line of business or practices, except insofar as may have been required by a change in GAAP (iii) compete with or applicable Law or, except as so required, change to obtain products or services from any assumption underlying, Person or method limiting the ability of calculating, any bad debt, contingency Person to provide products or other reserveservices to the Company or any of its Subsidiaries or Affiliates;
(i) neither it nor any of its Subsidiaries shallshall enter into any (A) commutations or (B) new quota share or other reinsurance transaction, in the case of clause (B), (i) which does not contain cancellation and termination provisions reasonably customary in the industry for that type of transaction, (ii) which, except in the ordinary course of business consistent with past practicebusiness, enter intomaterially increases or reduces the Company Insurance Subsidiaries' consolidated ratio of net written premiums to gross written premiums or (iii) except as set forth in Section 6.1(i) of the Company Disclosure Letter, renew, modify, amend, terminate, waive, delay pursuant to which $5,000,000 or more in gross written premiums are ceded by the exercise of, release or assign Company Insurance Subsidiaries to any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit Person other than the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subjectSubsidiaries;
(j) neither it nor any of its the Company Insurance Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate will alter or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any material respect the compensation their existing investment guidelines or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above)policies;
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measures;
(l) neither it nor any of its Subsidiaries shall make or rescind any material Tax election, amend any material Tax Return or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, in each case except in a manner consistent with past practice or as required by applicable Law;
(m) other than with respect to any actions permitted under Section 7.2, neither it nor any of its Subsidiaries shall take any action or omit to take any action that is reasonably likely would cause any of its representations and warranties herein to result become untrue in any material respect;
(l) neither it nor its Subsidiaries shall permit a material change in any of the conditions to the Merger set forth its underwriting, investment, actuarial, financial reporting or accounting practices or policies or in Article VIII not being satisfiedany material assumption underlying an actuarial practice or policy, except as may be required by any change in GAAP, statutory accounting principles or applicable Law; and
(nm) neither it nor any of its Subsidiaries will authorize any of, or commit, resolve or agree, in writing or otherwise, enter into an agreement to take, do any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operationsforegoing.
Appears in 2 contracts
Samples: Merger Agreement (Orion Capital Corp), Merger Agreement (Royal Group Inc/)
Interim Operations. The (a) Except as set forth in Section 6.1 of the Company Disclosure Schedule, the Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless Parent shall otherwise consent approve in writing, which consent approval shall not be unreasonably be withheld, and except as otherwise expressly contemplated by this Agreement or as set forth in this the Stock Option Agreement):
(ai) the business of it and its Subsidiaries Subsidiaries' businesses shall be conducted in the ordinary and usual course andcourse; it being understood and agreed that nothing contained herein shall permit the Company to enter into or engage in (through acquisition, to product extension or otherwise) the extent consistent therewith, business of selling any products or services materially different from existing products or services of the Company and its Subsidiaries or entering into or engaging in new lines of business;
(ii) it and its Subsidiaries shall use their respective commercially reasonable best efforts to preserve its their business organization organizations intact and maintain its their existing relations and goodwill with customers, suppliers, distributorsreinsurers, strategic partnersagents, creditors, lessors, providers and regulators, employees and business associates;
(biii) it shall not (iA) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (iiB) amend its certificate of incorporation or by-lawslaws or amend the Rights Agreement or adopt any new rights agreement or similar agreement; (iiiC) other than in the case of wholly-owned subsidiaries, split, combine or reclassify its outstanding shares of capital stock; (ivD) authorize, declare, set aside or pay any dividend or other distribution payable in cash, stock or property in respect of any capital stock, stock other than dividends from its direct or indirect wholly-wholly owned Subsidiaries; or (vE) purchaserepurchase, redeem or otherwise acquire, except for in connection with any of the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock OptionsPlans, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(civ) neither it nor any of its Subsidiaries shall (iA) issue, sell, pledge, dispose of or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debtof, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class, Rights, any Voting Debt class or any other property or assets (other than shares of Company Common Stock and associated Rights Shares issuable pursuant to options and other stock-based awards or pursuant to stock bonus plans outstanding on the date hereof under any of the Company Stock PlansPlans and options on up to 100,000 Shares granted under the Company Stock Plans after the date hereof to non-executive officers and consistent with prior practice); or (iiB) other than in the ordinary and usual course of business, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire of or encumber any material other property or material assets (including capital stock of any of its Subsidiaries) or businessincur or modify any material indebtedness or other liability, except for immaterial Liens arising by operation of law; (C) make or authorize or commit to any capital expenditures other than in accordance with or pursuant to the summary of the calendar year 1998 capital appropriations/spending budgets in Section 6.1(a)(iv)(C) of the Company Disclosure Letter, and, during calendar year 1999, shall not make or authorize or commit to any capital expenditures in excess of the 1998 capital expenditure limit set forth in Section 6.1(a)(iv)(C) of the Company Disclosure Letter; or (D) make any acquisition of, or investment in, assets or stock of any other Person or entity in excess of $3 million other than Passive Investments;
(dv) neither it nor any of its Subsidiaries shall restructureterminate, recapitalizeestablish, reorganize adopt, enter into, make any new grants or completely or partially liquidate or adopt a plan of complete or partial liquidation awards under, amend or otherwise enter into modify, any agreement Compensation and Benefit Plans except as required by Law or arrangement imposing material changes increase the salary, wage, bonus or restrictions on the operation other compensation of its assets or businesses or adopt resolutions providing any employees except increases for or authorizing any employees who are not elected officers of the foregoingCompany occurring in the ordinary and usual course of business (which shall include normal periodic performance reviews and related compensation and benefit increases), and if the Merger is not consummated on or prior to December 31, 1998 and this Agreement is not terminated in accordance with its terms, increases in compensation for elected officers of the Company occurring in the ordinary and usual course of business;
(evi) neither it nor any of its Subsidiaries shall acquire pay, discharge, settle or satisfy any claims, liabilities or obligations (i) by merging absolute, accrued, asserted or consolidating withunasserted, contingent or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, except purchases of inventory and raw materials in the ordinary course of business (or as permitted by Section 7.1(gotherwise), whether or not material);
(f) neither it nor any of its Subsidiaries shall (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business), (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company payment, discharge or any satisfaction of its direct claims, liabilities or indirect wholly owned Subsidiaries, or (iv) other than obligations in the ordinary and usual course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(g) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters);
(h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measures;
(l) neither it nor any of its Subsidiaries shall make or rescind change any material Tax election, amend settle any material audit, file any amended Tax Return Returns or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled canceled or terminated, in each case terminated except in a manner consistent with past practice or as required by applicable Lawthe ordinary and usual course of business;
(mviii) neither it nor any of its Subsidiaries shall enter into any Contract containing any provision or covenant limiting in any respect the ability of the Company or any of its Subsidiaries or any of their "Affiliates" (as defined in Rule 12b-2 under the Exchange Act) to (A) sell any products or services of or to any other Person, (B) engage in any line of business (including geographic limitations) or (C) compete with or obtain products or services from any Person, or limiting the ability of any Person to provide products or services to the Company or any of its Subsidiaries or their Affiliates;
(ix) enter into any new reinsurance arrangements;
(x) neither it nor any of its Subsidiaries will terminate, or amend, or modify in any material respect, any Material Company Contract, other than with respect provider Contracts that are terminated or amended or modified in the ordinary and usual course of business and other than renewal of customer Contracts in the ordinary and usual course of business; it being understood that the Company shall use its reasonable best efforts to keep Parent advised of any actions permitted under Section 7.2, anticipated termination of or material amendment or modification of any Material Customer Contract or Material Provider Contract and to make available to Parent the Exclusivity Contracts;
(xi) neither it nor any of its Subsidiaries shall take any action or omit to take any action that is reasonably likely would cause any of its representations and warranties herein to result become untrue in any of the conditions to the Merger set forth in Article VIII not being satisfiedmaterial respect; and
(nxii) neither it nor any of its Subsidiaries will authorize any of, or commit, resolve or agree, in writing or otherwise, enter into an agreement to take, do any of the foregoing actions; provided, however, that nothing contained in foregoing.
(b) During the period from the date of this Agreement shall give to through the Effective Time, (i) as requested by Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exerciseconfer on a regular basis with one or more representatives of Parent with respect to material operational matters (including the general status of provider and customer contracts), consistent with (ii) upon the terms knowledge of the executive officers of the Company of any event or occurrence that is reasonably likely to result in a Company Material Adverse Effect, any material litigation or material governmental complaints, investigation or hearings (or communications indicating that the same may be contemplated), the breach in any material respect of any representation, warranty or covenant contained herein, or the failure of any condition precedent to the Merger, the Company shall promptly notify Parent thereof and conditions (iii) upon the knowledge of the executive officers of Parent of any event or occurrence that is reasonably likely to result in a Parent Material Adverse Effect or the failure of any condition precedent to the Merger, Parent shall promptly notify the Company thereof.
(c) Except as disclosed in the Parent Reports filed prior to the date hereof, Parent covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless the Company shall otherwise approve in writing, which approval shall not be unreasonably withheld, and except as otherwise expressly contemplated by this Agreement) that (i) except as set forth in Section 6.1(c) of the Parent Disclosure Schedule, complete control and supervision of its Parent and its Subsidiaries’ operations' businesses shall be conducted in the ordinary and usual course; and (ii) Parent shall not authorize, declare, set aside or pay any dividend or other distribution in respect of any capital stock of Parent, other than dividends from its direct or indirect wholly owned Subsidiaries and regular annual dividends of $0.03 per share of the Parent Common Stock.
Appears in 1 contract
Interim Operations. The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless Parent shall otherwise consent in writing, which consent shall not unreasonably be withheld, and except Except as otherwise expressly contemplated by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as agreed to in writing by Parent (which shall not be unreasonably withheld or delayed, other than with respect to subsections 5.01(c), 5.01(d), 5.01(g), and 5.01(h), in which case such consent shall be given in Parent’s sole discretion), the Company covenants and agrees that during the period from the date of this AgreementAgreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(a) the business and operations of it the Company and its the Subsidiaries shall be conducted in the ordinary course of business consistent with past practice;
(b) the Company shall, and usual course andshall cause each Subsidiary to, to the extent consistent therewith(i) maintain its existence in good standing under applicable Law, it and its Subsidiaries shall (ii) use their respective commercially reasonable efforts to (A) preserve intact its assets, properties, contracts or other legally binding understandings, licenses and business organization intact organizations, (B) keep available the services of its current officers and maintain its existing relations key employees and goodwill (C) preserve the current relationships of the Company and the Subsidiaries with payors, customers, suppliers, distributors, strategic partnerslessors, licensors, licensees, creditors, lessorsemployees, employees contractors and other Persons with which the Company or any Subsidiary has business associatesrelations;
(bc) it the Company shall not (i) authorize for issuance, issue, selldeliver, pledgepropose, dispose sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock owned by it in or the capital stock of any Subsidiary, any other securities or any securities convertible into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of its Subsidiaries; Common Stock upon the exercise of Options or Warrants outstanding as of the date hereof, (ii) amend its certificate of incorporation or by-laws; (iii) other than in the case of wholly-owned subsidiaries, split, combine or reclassify its outstanding shares of capital stock; (iv) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, other than dividends from its direct or indirect wholly-owned Subsidiaries; or (v) purchaserepurchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, or permit any of its Subsidiaries Subsidiary to purchase repurchase, redeem or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares other equity interests of its capital stock;
(c) neither it nor any of its Subsidiaries shall (i) issue, sell, pledge, dispose of or encumber (A) any shares of its capital stock of any class, Rights the Company or any Voting DebtSubsidiary (including, or (B) without limitation, securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any Subsidiary), (iii) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any Subsidiary, (iv) amend or otherwise change its certificate of incorporation or bylaws or permit any Subsidiary to amend its certificate of incorporation, bylaws or equivalent organizational documents or (v) adjust, split, combine or reclassify any shares of its capital stock of stock, or permit any classSubsidiary to adjust, Rightssplit, combine or reclassify any Voting Debt or any other property or assets (other than shares of Company Common Stock and associated Rights issuable pursuant to options and other its capital stock-based awards outstanding on , except in the date hereof under the Company Stock Plans); or case of (ii) transferfor purchases, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender redemptions or allow to lapse or expire or encumber any material property or material assets (including other acquisitions of capital stock or other equity interest required by the terms of any of its Subsidiaries) or businessthe applicable Stock Plan;
(d) neither it nor the Company shall not, and shall not permit any Subsidiary to (i) declare, set aside, establish a record date for, or pay any dividends on (whether in cash, stock or other property), or make any other distributions in respect of, any of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries shall restructureto the Company), recapitalize(ii) acquire or agree to acquire, reorganize or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the operation of its assets or businesses or adopt resolutions providing for or authorizing any of the foregoing;
(e) neither it nor any of its Subsidiaries shall acquire (i) including, without limitation, by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or any capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (iiiii) authorize or make any assets that are material, individually or monthly capital expenditures in excess of $100,000 in the aggregate, aggregate (other than pursuant to commitments prior to the date hereof);
(e) the Company shall not, and shall not permit any of its Subsidiaries, taken as a wholeSubsidiary to, except purchases of inventory as expressly contemplated by this Agreement (including, without limitation, Section 2.03 hereof) (i) increase or agree to increase in any manner the compensation or benefits of, or pay any bonus to, any current or former director, officer or employee except (A) for increases and raw materials bonuses expressly contemplated by or required under existing employment agreements or bonus plans, and (B) for increases in compensation to non-director and non-officer employees in the ordinary course of business consistent with past practice, (ii) become obligated under any Benefit Plan that was not in existence on the date hereof or amend, modify or terminate any Benefit Plan or other benefit or compensation plan, program, agreement or arrangement or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereof, excluding for this purpose any amendment or modification as permitted may be necessary to comply with, or to avoid the imposition of penalties or excise taxes to the Company, any Subsidiary, or any Benefit Plan participant, under applicable Law, (iii) hire any new employees other than non-officer employees in the ordinary course of business consistent with past practice, or (iv) terminate any officer or key employee of the Company or any Subsidiary other than for good reason or for reasonable cause or (v) except as may be required to comply with applicable Law, pay any benefit not required by Section 7.1(g)any plan or arrangement as in effect as of the date hereof (including, whether without limitation, securities exchangeable for, or not materialoptions, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any Subsidiary);
(f) neither it nor the Company shall not, and shall not permit any Subsidiary to, sell, lease, license, mortgage or otherwise encumber or subject to any Lien or otherwise dispose of, or agree to sell, lease, license, mortgage or otherwise encumber or subject to any Lien or otherwise dispose of (including through any sale-leaseback or similar transaction), any of its Subsidiaries shall properties or assets other than (i) incur pursuant to existing contracts and commitments, (ii) properties or assets (or portions of properties or assets) not material to the operation of the business of the Company and/or any Subsidiary with a fair market value less than $50,000, (iii) inventory in the ordinary course of business consistent with past practice, (iv) licenses granted by the Company in the ordinary course of business to customers for such customers’ use of the Company’s products and services, and (v) Permitted Liens;
(g) the Company shall not, and shall not permit any Subsidiary to, (i) incur, assume or pre-pay any indebtedness for borrowed money or guarantee enter into any agreement to incur, assume or pre-pay any indebtedness for borrowed money, or guarantee, or agree to guarantee, any such indebtedness or obligation of another Person (other than pursuant Person, or issue or sell, or agree to the Credit Agreement in the ordinary course of business)issue or sell, (ii) issue, sell or amend any debt securities or options, warrants or other calls or rights to acquire any debt securities of the Company or any of its SubsidiariesSubsidiary, guarantee any debt securities of another Personothers, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person person or enter into any arrangement having the economic effect of any of the foregoing, (iiiii) make or forgive any loans, advances (or capital contributions to, guarantees for the benefit of, or investments in, any Person, other than routine advances to employees of loans between or among the Company and its Subsidiaries any wholly owned Subsidiary and cash advances to the Company’s or any Subsidiary’s employees for reimbursable travel and other business expenses incurred in the ordinary course of businessbusiness consistent with past practice or (iii) assume, guarantee or capital contributions tootherwise become liable or responsible (whether directly, contingently or investment in, otherwise) for the obligations of any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(g) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter in the aggregate except for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, obligations of the shortfall shall be available to the Company to spend in future quarters)Subsidiaries permitted under this Agreement;
(h) neither it nor the Company shall not, and shall not permit any Subsidiary to, adopt or put into effect a plan of its Subsidiaries shall make any material changes in accounting methodscomplete or partial liquidation, principles or practicesdissolution, except insofar as may have been required by a change in GAAP or applicable Law ormerger, except as so requiredconsolidation, change any assumption underlyingrestructuring, or method of calculating, any bad debt, contingency recapitalization or other reservereorganization of the Company or any Subsidiary (other than any transaction specifically contemplated by this Agreement or as permitted by Section 5.09);
(i) neither it nor the Company shall not, and shall not permit any Subsidiary to, (i) enter into, or materially amend, modify, supplement or terminate any Material Contract or Lease, (ii) enter into, or amend, modify, supplement or terminate any contract that if so entered into, modified, amended or terminated could be reasonably likely to (A) have a Company Material Adverse Effect, (B) impair in any material respect the ability of the Company to perform its obligations under this Agreement or (C) prevent or materially delay the consummation of the Transactions, or (iii) waive, release, grant, assign, transfer or fail to enforce any of its Subsidiaries material rights or claims (whether such rights or claims arise under a Material Contract or otherwise);
(j) the Company shall, except and shall cause the Subsidiaries to, (i) comply in all material respects with their obligations under the Material Contracts as such obligations become due, (ii) maintain insurance covering risks of such types and in such amounts as are consistent with the Company’s past practices and (iii) use commercially reasonable efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated;
(k) the Company shall not, and shall not permit any Subsidiary to, (i) pay, discharge, settle or satisfy any liabilities in excess of $100,000 (individually or in the aggregate), other than the payment, discharge or satisfaction of liabilities in the ordinary course of business consistent with past practice, as required by any applicable Law or as required by the terms of any contract of the Company or the Subsidiaries, (ii) engage in any transaction with, or enter intointo any agreement, renew, modify, amend, terminate, waive, delay the exercise of, release arrangement or assign any material rights or claims underunderstanding with, any affiliate of the Company Material Contract or other Person covered by Item 404 of Regulation S-K promulgated under the Exchange Act that would be required to be disclosed under such Item 404, (iii) compromise or settle any Action directly relating to or affecting the Company Lease or the Subsidiaries having a value or in an amount in excess of $250,000, (iv) effectuate a manner materially adverse to Parent; provided“plant closing” or “mass layoff,” as those terms are defined in the Worker Adjustment and Retraining Notification Act (WARN), thataffecting in whole or in part any site of employment, nothing herein shall permit facility, operating unit or employee of the Company or any of its Subsidiaries Subsidiary, or (v) abandon or allow to lapse or expire any registration or application for material IP Rights;
(l) the Company shall not, and shall not permit any Subsidiary to, (i) enter into change any Contract of the type specified in Section 5.5(a)(viiiaccounting policies, practices or procedures (including tax accounting policies, practices and procedures) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to used by the Company or any of its Subsidiaries any existing Contract Subsidiary as of the type specified date hereof, except as may be required as a result of a change in Section 5.5(a)(viii) applicable Law or Section 5.5(a)(ix)in GAAP, or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign revalue in any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or manner any of its Subsidiaries is bound by assets (including, without limitation, writing down or subject;
(j) neither it nor writing off any of its Subsidiaries shallnotes or accounts receivable in any manner), except as required to comply with applicable Law by GAAP or agreements(iii) make or change any Tax election, plans make or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take change any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare method of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business accounting with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) Taxes except as otherwise provided herein and other than may be required as set forth on Section 7.1(j) a result of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge Tax liability in excess of $250,000 (individually or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); provided, however, aggregate) or file any amended Tax Return that notwithstanding any other provision of this Agreement, neither would increase the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs Tax liability of the Company or any of its Subsidiaries or places any material restrictions on Subsidiary after the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measures;
(l) neither it nor any of its Subsidiaries shall make or rescind any material Tax election, amend any material Tax Return or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, in each case except in a manner consistent with past practice or as required by applicable Law;Effective Time; and
(m) other than with respect the Company shall not, and shall not permit any Subsidiary to, agree or commit to any actions permitted under Section 7.2, neither it nor any of its Subsidiaries shall take any action or omit to take any action that is reasonably likely to result in do any of the conditions foregoing. Notwithstanding anything to the Merger contrary set forth in Article VIII not being satisfied; and
(n) neither herein, it nor any is understood and agreed that none of its Subsidiaries will authorize any of, or commit, resolve or agree, in writing or otherwise, to take, any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly Merger Sub or indirectly, rights their affiliates have the right to control or direct the Company’s operations of the Company prior to Closingthe Effective Time. Prior to Closingthe Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of over its and its Subsidiaries’ operations.
Appears in 1 contract
Interim Operations. The Company covenants and agrees as to itself and its Subsidiaries that, after After the date hereof and prior to the Effective Time (unless Parent shall otherwise consent in writingClosing, which consent shall not unreasonably be withheld, Seller covenants and except as otherwise expressly contemplated by this Agreement or as set forth in this Agreement):
(a) the agrees to cause each Acquired Entity to conduct its business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and Seller shall cause each Acquired Entity to use its Subsidiaries shall use their respective commercially reasonable efforts to (x) preserve its business organization organizations intact and maintain its existing relations and goodwill with all Governmental Entities, customers, suppliers, distributors, strategic partners, creditors, lessors, employees and business associates;associates and (y) keep available the services of its present key employees and key agents. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the Closing, except (A) as otherwise expressly contemplated by this Agreement, (B) as Buyer may approve in writing or (C) for transactions set forth on Schedule 5.1, Seller shall cause each Acquired Entity not to:
(b) it shall not (i) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (iiA) amend its certificate of incorporation or by-laws; (iii) other than in the case of wholly-owned subsidiariesadjust, split, combine or reclassify its outstanding capital stock, (B) grant (whether or not for consideration) any Person any option or other right to acquire any shares of capital stock; stock or other securities, (ivC) declareissue (whether or not for consideration) any shares of capital stock or other securities, set aside or (D) enter into any Contract with respect to the sale, voting, registration or repurchase of capital stock or other securities;
(ii) declare or pay any non-cash dividend payable in cash, stock or property make any non-cash distribution in respect of any capital stock, other than dividends from its direct or indirect wholly-owned Subsidiaries; or (v) purchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Optionsof, or permit any of its Subsidiaries to purchase repurchase or otherwise acquireredeem, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(ciii) neither it nor any of its Subsidiaries shall (i) issuedirectly or indirectly sell, selltransfer, pledge, otherwise create any Encumbrance on or otherwise dispose of or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debt, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class, Rights, any Voting Debt or any other property or assets (other than shares of Company Common Stock and associated Rights issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans); or (ii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire or encumber any material property or material assets (including capital stock of any of its Subsidiaries) or business;
(d) neither it nor any of its Subsidiaries shall restructure, recapitalize, reorganize or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the operation of its assets or businesses or adopt resolutions providing for or authorizing any of the foregoing;
(e) neither it nor any of its Subsidiaries shall acquire (i) by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a wholeassets, except purchases for sale of inventory products and raw materials in the ordinary course of business (or as permitted by Section 7.1(g), whether or not material);
(f) neither it nor any of its Subsidiaries shall (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement services in the ordinary course of business), ;
(iiiv) issue, sell amend its governing documents;
(v) merge or amend consolidate with any debt securities or warrants or other rights to Person;
(vi) acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances assets (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, stock or investment in, other securities of any other Person;
(vii) enter into or materially modify any material employment, other than the Company consulting, severance, stay-pay, termination or any of its direct or indirect wholly owned Subsidiariessimilar Contracts with, or (iv) other than grant any bonuses, equity awards, salary increases, severance, pension, retirement or termination pay to, any Employee, or otherwise materially increase the compensation or benefits provided to any Employee, except as may be required by existing Contract or in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(gviii) neither it nor enter into or adopt any of its Subsidiaries shall make new Company Benefit Plan or materially increase benefits under or renew, amend or terminate any capital expenditures or other expenditures with respect to propertyCompany Benefit Plan, plant or equipment in excess of $10 million per quarter in the aggregate for the Company and its Subsidiaries, taken except as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall may be available to the Company to spend in future quarters)required by applicable Law;
(hix) neither it nor hire any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shallnew Employees, except in the ordinary course of business with respect to Employees with an annual base salary and incentive compensation opportunity not to exceed $100,000;
(A) make any material Tax election (other than such elections which are consistent with the most recent past practicepractice of the relevant Acquired Entity) or rescind or change any material Tax election or adopt or change any method of accounting, (B) enter intointo any settlement of or compromise any material Tax liability, renew(C) change any annual Tax accounting period, modify(D) enter into a closing agreement for any material amount of Tax, amend, (E) surrender any right to any material Tax refund or (F) file any amended Tax Return or refund claim with respect to any material Tax;
(xi) materially amend or terminate, or waive, delay the exercise of, release or assign any material rights or claims under, with respect to any Company Material Contract or Company Lease in a manner materially adverse to Parent; providedmaterial Permit, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall business;
(xii) enter into any settlement of or compromise any litigationContract that would constitute a Material Contract, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time other than in the futureordinary course of business;
(xiii) enter into, materially increases the labor amend, terminate or operating costs waive any provision of the Company any Contract with Seller or any of its Subsidiaries or places enter into any material restrictions on the ability of the Company new transaction with Seller or any of its Subsidiaries to impose any labor saving or Subsidiaries, other cost reduction measuresthan in the ordinary course of business;
(lxiv) neither it nor enter into, amend, renew, terminate or materially increase benefits under any of its Subsidiaries shall make labor or rescind any material Tax election, amend any material Tax Return or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, in each case except in a manner consistent with past practice or as required by applicable Lawcollective bargaining agreement;
(mxv) incur any indebtedness for borrowed money, other than in the ordinary course of business;
(xvi) change any method of accounting or accounting practice or policy used by the Acquired Entities, other than such changes required by GAAP;
(xvii) fail to exercise any rights of renewal with respect to any actions permitted under Section 7.2material Leased Real Property that by its terms would otherwise expire;
(xviii) settle or compromise any material Claims;
(xix) forgive or cancel any material Debts or terminate or waive any material rights;
(xx) incur any capital expenditure or commitment in excess of the annual capital expenditure budget of the Acquired Entities previously provided to Buyer;
(xxi) enter into any commodity hedging, neither it nor foreign exchange hedging or any other type of its Subsidiaries shall take any action or omit financial instrument other than in the ordinary course of business; or
(xxii) agree to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VIII not being satisfied; and
(n) neither it nor any of its Subsidiaries will authorize any of, or commit, resolve or agree, in writing or otherwise, to take, any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operations.
Appears in 1 contract
Samples: Stock Purchase Agreement (Aleris International, Inc.)
Interim Operations. The Company covenants and agrees as to itself and its Subsidiaries that, after (a) From the date hereof and prior to until the Effective Time earlier of the Closing or termination of this Agreement, Seller shall (unless Parent shall otherwise consent i) operate the Business only in writingthe Ordinary Course of Business, which consent shall not unreasonably be withheldincluding maintaining appropriate service levels, and in compliance with applicable Law including any COVID-19 Measures; and (ii) use commercially reasonable efforts to (A) maintain and preserve intact the business organization and goodwill of the Business, the Assets and the Assumed Liabilities, (B) maintain satisfactory relationships with Seller’s clients, operators, distributors, customers, insurance underwriters and other third parties having business dealings with Seller, (C) pay its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits and (E) maintain good relations with, and keep available the services of, the Business Employees.
(b) Without limiting the generality of the foregoing, except as otherwise set forth in Section 5.1(b) of the Disclosure Schedule, as expressly contemplated permitted by this Agreement or as set forth approved in writing by Xxxxx, from the date hereof until the earlier of the Closing or the termination of this Agreement):
(a) the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, strategic partners, creditors, lessors, employees and business associates;
(b) it Seller shall not take any action which would require disclosure on Section 2.8 of the Disclosure Schedule or:
(i) issue, sell, pledge, dispose of take or encumber omit to take any capital stock owned by it action that results or may reasonably be expected to result in any of its Subsidiaries; the representations and warranties of Seller or the Beneficial Owners set forth herein being or becoming untrue in any material respect or in any of the conditions set forth herein not being satisfied;
(ii) amend its certificate or otherwise change the organizational documents of incorporation or by-laws; Seller;
(iii) (A) authorize, issue, sell or transfer any membership interests or other than in the case securities of wholly-owned subsidiariesSeller, (B) adjust, split, combine or reclassify its outstanding shares or otherwise amend the terms of capital stock; any membership interest or other security of Seller, (ivC) declare, authorize, set aside make or pay any dividend payable or other distribution (whether in cash, stock or property in other property) or (D) enter into any agreement with respect to the voting of any capital stockequity of Seller;
(iv) (A) merge or consolidate with any other Person, acquire any business or assets of any other Person (whether by merger, stock purchase, asset purchase or other business combination), other than dividends from its direct or indirect wholly-owned Subsidiaries; or (v) purchase, redeem or otherwise acquire, except for the acquisition purchase of shares supplies in the Ordinary Course of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(c) neither it nor any of its Subsidiaries shall (i) issue, sell, pledge, dispose of or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debt, Business or (B) securities convertible form any new Subsidiary;
(v) (A) materially change the operation of the Business, Assets or the Assumed Liabilities or any method of purchase, sale, lease, management, marketing, promotion or operation, except such changes as may be required to comply with any Law or the terms of this Agreement or (B) enter into a new line of business or exchangeable abandon or exercisable fordiscontinue an existing line of business;
(vi) make any loans, advances or capital contributions to, or options, warrants, calls, commitments or rights of any kind to acquireinvestments in, any shares of its capital stock of any class, Rights, any Voting Debt or any other property or assets Person (other than shares advances of Company Common Stock and associated Rights issuable pursuant expenses to options and Business Employees in the Ordinary Course of Business);
(vii) (A) institute or announce any increase in the compensation, bonuses or other stock-based awards outstanding on the date hereof benefits payable to any Business Employees, (B) enter into, amend or waive any rights under the Company Stock Plans); any employment, consulting, severance or change of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (iiE) hire any Business Employee or terminate or transfer any Business Employee (other than for cause);
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender of or allow to lapse incur any Lien on or expire or otherwise encumber any material property or material assets (including capital stock Assets, other than in the Ordinary Course of any of its Subsidiaries) or businessBusiness;
(dix) neither it nor acquire any real property or undertake or commit to undertake capital expenditures for the purchase of its Subsidiaries shall restructureequipment or tangible assets exceeding $35,000 in the aggregate;
(x) agree to, recapitalize, reorganize or completely or partially liquidate request or adopt (A) any moratorium or suspension of payment of any Indebtedness, (B) the appointment of a plan receiver, administrator, liquidator, assignee, trustee or other similar official with respect to Seller, (C) an assignment for the benefit of complete creditors or partial liquidation an admission in writing of the inability of Seller to pay its debts as they become due, or otherwise enter into (D) any agreement other thing under any applicable Law relating to bankruptcy or arrangement imposing material changes or restrictions on the operation of its assets or businesses or adopt resolutions providing for or authorizing insolvency with similar effect as any of the foregoing;
foregoing (eA) neither it nor any of its Subsidiaries shall acquire through (i) by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, except purchases of inventory and raw materials in the ordinary course of business (or as permitted by Section 7.1(g), whether or not materialC);
(f) neither it nor any of its Subsidiaries shall (ixi) incur any indebtedness for borrowed money Indebtedness or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business), (ii) issue, sell or amend issue any debt securities or warrants or other rights to acquire any debt securities of the Company Seller or any of its Subsidiariesassume, guarantee or endorse, as an accommodation or otherwise, the obligations of any debt securities of another PersonPerson for Indebtedness or capital obligations, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having in the economic effect case of any of the foregoing;
(xii) cancel any debts owed to or claims held by Seller in excess of $35,000;
(xiii) abandon, (iii) make disclaim, dedicate to the public, sell, assign or grant any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment security interest in, to or under any other Business Intellectual Property or Business IP Agreement;
(xiv) disclose any confidential or proprietary information or confidential Business Intellectual Property to any Person, other than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with the Company or Seller;
(xv) revalue any of its the assets of the Seller, except as required by GAAP, or enter into, or permit any of the assets of the Seller to become bound by any Contract that is or would constitute a Material Contract;
(xvi) (A) change any method of accounting or accounting practice, other than changes required under applicable Law or GAAP or (B) fail to maintain the Seller’s books, accounts and records in the Ordinary Course of Business;
(xvii) make, revoke or change any Tax election by Seller that could adversely impact the amount of Taxes due or payable (and/or any direct or indirect wholly owned Subsidiaries, or (ivowner of equity interests in Buyer) other than in after the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange ratesClosing Date;
(gxviii) neither it nor any modify, amend or terminate (other than pursuant to the expiration of its Subsidiaries shall make term other than as a result of any capital expenditures action taken by Seller, or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter in the aggregate for the Company and its Subsidiaries, taken than as a whole (it being understood that if capital expenditures result of a material breach by the counterparty thereto) any Contract currently in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters);
(h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles effect or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, termination release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subjectthereunder;
(jxix) neither it nor fail to pay any of its Subsidiaries shall, except as required maintenance or other similar fees or otherwise fail to make required filings or payments required to comply with applicable Law maintain and further prosecute any applications for registration of Owned Intellectual Property or agreementsotherwise abandon, plans let lapse or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant fail to Section 7.11(c), take protect any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above)Owned Intellectual Property;
(kxx) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiatecommence, settle or compromise any litigationProceeding;
(xxi) cancel, claimmaterially reduce or fail to maintain any insurance policy;
(xxii) change or modify the Seller’s credit, grievancecollection, charge or proceeding involving payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) in any Intellectual Property material respect or fail to pay or delay payment of payables or other Liabilities in any other material litigation, claim, grievance, charge respect;
(xxiii) engage in any transaction with any Related Parties; or
(xxiv) authorize or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of agreement, commitment or compromise any litigation, claim, grievance, charge understanding (whether written or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measures;
(loral) neither it nor any of its Subsidiaries shall make or rescind any material Tax election, amend any material Tax Return or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, in each case except in a manner consistent with past practice or as required by applicable Law;
(m) other than with respect to any actions permitted under Section 7.2, neither it nor any of its Subsidiaries shall take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VIII not being satisfied; and
(n) neither it nor any of its Subsidiaries will authorize any of, or commit, resolve or agree, in writing or otherwise, to take, any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operationsforegoing.
Appears in 1 contract
Samples: Asset Purchase Agreement (Tivic Health Systems, Inc.)
Interim Operations. The Except as (A) Parent shall otherwise permit in writing pursuant to the last sentence of this Section 3.1, (B) set forth in Section 3.1 of the Company Disclosure Letter or (C) otherwise expressly contemplated by this Agreement, the Amalgamation Agreement or the Sub Amalgamation Agreement, the Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless Parent shall otherwise consent in writing, which consent shall not unreasonably be withheld, and except as otherwise expressly contemplated by this Agreement or as set forth in this Agreement):Time:
(a) the business of it the Company and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it the Company shall and shall cause its Subsidiaries shall to use their respective commercially its reasonable best efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, strategic partners, creditors, lessors, employees and business associates;
(b) it shall not (i) issue, sell, pledge, dispose of or encumber any share capital stock owned by it in any of its Subsidiaries, except as permitted pursuant to Section 7.02 of the US$800,000,000 Credit Agreement (the “Existing Credit Agreement”) dated as of December 17, 2003 among the Company, the lenders party thereto and Citicorp North America, Inc., as administrative agent (a “Permitted Temporary Share Lien”), provided that if any Permitted Temporary Share Lien is incurred, it shall cause such Permitted Temporary Share Lien to be released and discharged in full prior to the Closing (the condition in this proviso not to be effective until the Repayment Time); (ii) amend its certificate memorandum of incorporation association or bybye-lawslaws or amend or modify the Rights Agreement; (iii) other than in the case of wholly-owned subsidiariessplit, splitconsolidate, combine or reclassify its issued and outstanding shares of capital stockshare capital; (iv) declare, set aside or pay any dividend payable in cash, stock shares or property in respect of any share capital stock, other than dividends payable from its direct or indirect wholly-Subsidiaries to the Company or any of its Subsidiaries, provided that if any dividends other than dividends payable in cash from its direct or indirect wholly owned SubsidiariesSubsidiaries to the Company or any of its Subsidiaries in the ordinary course of business consistent with past practice are paid, it shall cause such dividends to be repaid prior to the Closing (the condition in this proviso not to be effective until the Repayment Time); or (v) purchaserepurchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares indebtedness for borrowed money of the Company or any of its Subsidiaries, or any share capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(c) neither it nor any of its Subsidiaries shall (i) issueshare capital, sell, pledge, dispose of or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debt, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class, Rights, any Voting Debt or any other property or assets (other than shares of Company Common Stock and associated Rights issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans); or (ii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire or encumber any material property or material assets (including capital stock of any of its Subsidiaries) or business;
(d) neither it nor any of its Subsidiaries shall restructure, recapitalize, reorganize or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the operation of its assets or businesses or adopt resolutions providing for or authorizing any of the foregoing;
(e) neither it nor any of its Subsidiaries shall acquire (i) by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, except purchases of inventory and raw materials in the ordinary course of business (or as permitted by Section 7.1(g), whether or not material);
(f) neither it nor any of its Subsidiaries shall (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business), (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of from the Company or any of its SubsidiariesSubsidiary (a “Permitted Repurchase”), guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(g) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters);
(h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, provided that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing DateClosing, paying awards under it shall cause any such indebtedness for borrowed money, share capital or securities the 2006 Executive Incentive Plan and commissions subject of such Permitted Repurchase to employees at be transferred back to the level of Vice President and above party that transferred it in the ordinary course of business and consistent with past practices as to Permitted Repurchase for the approval of such awards and the timing of such paymentssame consideration, to the extent the performance standards and targets set for 2006 have been satisfiedif any, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than paid in the ordinary course of business consistent with past practice); provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at Permitted Repurchase. The term “Repayment Time” means the time of repayment of all amounts owing under, and termination of, the settlement or compromise or at any time in the futureExisting Credit Agreement, materially increases the labor or operating costs of which Existing Credit Agreement the Company or any of its Subsidiaries or places any material restrictions on covenants to repay and terminate as provided at the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measures;
(l) neither it nor any of its Subsidiaries shall make or rescind any material Tax election, amend any material Tax Return or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, in each case except in a manner consistent with past practice or as required by applicable Law;
(m) other than with respect to any actions permitted under Section 7.2, neither it nor any of its Subsidiaries shall take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VIII not being satisfied; and
(n) neither it nor any of its Subsidiaries will authorize any of, or commit, resolve or agree, in writing or otherwise, to take, any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions end of this Agreement, complete control and supervision of its and its Subsidiaries’ operations.Section 3.1;
Appears in 1 contract
Samples: Transaction Agreement and Plan of Amalgamation (Intelsat LTD)
Interim Operations. The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior Prior to the Effective Time (unless Parent shall otherwise consent in writingTime, which consent shall not unreasonably be withheld, and except as otherwise expressly contemplated by this Agreement or as set forth in the Company Disclosure Letter or as contemplated by any other provision of this Agreement):, unless Sub has consented in writing thereto, the Company:
(ai) the business shall, and shall cause each of it and its Subsidiaries shall be conducted in the ordinary and usual course andto, to the extent consistent therewith, it and conduct its Subsidiaries shall use their respective commercially reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, strategic partners, creditors, lessors, employees operations and business associatesaccording to their usual, regular and ordinary course consistent with past practice;
(bii) it shall not (i) issueuse its best efforts, sell, pledge, dispose of or encumber any capital stock owned by it in any and shall cause each of its Subsidiaries; Subsidiaries to use its best efforts, to preserve intact their business organizations and goodwill, keep available the services of their respective officers and employees and maintain satisfactory relationships with those persons having business relationships with them;
(iiiii) shall not, and shall cause its Subsidiaries not to, amend its certificate their respective Articles of incorporation Incorporation or by-laws; (iii) other than in the case of wholly-owned subsidiaries, split, combine laws or reclassify its outstanding shares of capital stock; comparable governing instruments;
(iv) declareshall promptly notify Sub of (x) any material change in its condition (financial or otherwise), set aside business, prospects, properties, assets, liabilities or pay the normal course of its business or of its properties, (y) any dividend payable in cashmaterial litigation or material governmental complaints, stock investigations or property in respect hearings (or communications indicating that the same may be contemplated), or (z) the breach of any capital stock, other than dividends from its direct representation or indirect wholly-owned Subsidiaries; or warranty contained herein;
(v) purchaseshall promptly deliver to Sub correct and complete copies of any report, redeem statement or otherwise acquire, except for schedule filed with the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options SEC subsequent to the extent required or permitted under the terms date of such Company Stock Optionsthis Agreement;
(vi) shall not, or and shall not permit any of its Subsidiaries to, authorize, propose or announce an intention to purchase authorize or otherwise acquirepropose, or enter into an agreement with respect to, any shares of its capital stock merger, consolidation or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(c) neither it nor any of its Subsidiaries shall (i) issue, sell, pledge, dispose of or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debt, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class, Rights, any Voting Debt or any other property or assets business combination (other than shares the Merger), release or relinquishment of Company Common Stock and associated Rights issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans); or (ii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire or encumber any material property contract rights, or material assets (including capital stock any acquisition or disposition of any of its Subsidiaries) or business;
(d) neither it nor any of its Subsidiaries shall restructure, recapitalize, reorganize or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the operation of its assets or businesses or adopt resolutions providing for or authorizing any of the foregoing;
(e) neither it nor any of its Subsidiaries shall acquire (i) by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, except purchases of inventory and raw materials in the ordinary course of business (or as permitted by Section 7.1(g), whether or not material);
(f) neither it nor any of its Subsidiaries shall (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business), (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(g) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter 100,000 in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters);
(h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); provided;
(vii) shall not, however, that notwithstanding any other provision of this Agreement, neither the Company nor and shall not permit any of its Subsidiaries shall enter into to, (x) grant, confer or award any settlement options, warrants, conversion rights or other rights, not existing on the date hereof, to acquire any shares of its capital stock or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs other securities of the Company or its Subsidiaries or (y) accelerate, amend or change the period of exercisability of options or restricted stock granted under any employee stock plan or, except as contemplated by Section 4.3(a)(i), authorize cash payments in exchange for any options granted under any of such plans;
(viii) shall not, and shall not permit any of its Subsidiaries or places to, amend in any material restrictions respect the terms of the Benefit Plans, including, without limitation, any employment, severance or similar agreements or arrangements in existence on the ability of the Company date hereof, or adopt any new employee benefit plans, programs or arrangements or any employment, severance or similar agreements or arrangements;
(ix) shall not, and shall not permit any of its Subsidiaries to impose (x) increase or agree to increase the compensation payable or to become payable to its officers or, other than increases in accordance with past practice which are not material, to its employees or (y) enter into any labor saving or other cost reduction measurescollective bargaining agreement;
(lx) neither it nor shall not, and shall not permit any of its Subsidiaries to, (x) incur, create, assume or otherwise become liable for borrowed money or assume, guarantee, endorse or otherwise become responsible or liable for the obligations of any other individual, corporation or other entity or (y) make any loans or advances to any other person, except in the case of clause (x) for borrowings under existing credit facilities in the ordinary course of business and, except in the case of clause (y) for advances consistent with past practice which are not material;
(xi) shall make not, and shall not permit any of its Subsidiaries to, (x) materially change any practice with respect to Taxes, (y) make, change or rescind revoke any material Tax election, amend or (z) settle or compromise any material dispute involving a Tax Return or liability;
(xii) shall not, and shall not permit any insurance policy naming it as a beneficiary of its Subsidiaries to, (x) declare, set aside or loss-payable payee pay any dividend or make any other distribution or payment with respect to be cancelled any shares of its capital stock or terminatedother ownership interests or (y) directly or indirectly redeem, purchase or otherwise acquire any shares of its capital stock or capital stock of any of its Subsidiaries, or make any commitment for any such action or (z) split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in each case except lieu of or in substitution for shares of its capital stock;
(xiii) shall not, and shall not permit any of its Subsidiaries to, issue, deliver, sell, pledge or otherwise encumber any shares of its capital stock, any other securities or any securities convertible into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities (other than the issuance of shares of Company Common Stock upon the exercise of Company Stock Options outstanding on the date hereof in accordance with their present terms);
(xiv) shall not, and shall not permit any of its Subsidiaries to, make or agree to make any capital expenditure or expenditures with respect to property, plant or equipment which, individually or in a manner series of related transactions, is in excess of $100,000 or, in the aggregate, are in excess of $500,000 except as otherwise in the ordinary course of business consistent with past practice in order to satisfy actual or expected contractual commitments to customers;
(xv) shall not, and shall not permit any of its Subsidiaries to, change any accounting principles or practices;
(xvi) shall not, and shall not permit any of its Subsidiaries to, pay, discharge, settle or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction, in the ordinary course of business consistent with past practice or as required by applicable Law;in accordance with their terms, of liabilities reflected or reserved against in the most recent consolidated financial statements (or the notes thereto) of the Company included in the Company Reports or incurred thereafter in the ordinary course of business consistent with past practice, or waive any material benefits of, or agree to modify in any material respect, any confidentiality, standstill, non-solicitation or similar agreement to which the Company or any Subsidiary is a party; and
(mxvii) other than with respect to any actions permitted under Section 7.2shall not, neither it nor and shall not permit any of its Subsidiaries shall take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VIII not being satisfied; and
(n) neither it nor any of its Subsidiaries will authorize any oftake, or commit, resolve or agree, agree (in writing or otherwise, ) or resolve to take, any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operations.
Appears in 1 contract
Samples: Merger Agreement (MTL Inc)
Interim Operations. The Company Seller covenants and agrees as to, and agrees to itself and its Subsidiaries thatcause each member of Subject Company Group, after the date hereof and prior to the Effective Time Closing (unless Parent Purchaser shall otherwise consent approve in writing, which consent approval shall not be unreasonably be withheldwithheld or delayed, and except as otherwise expressly contemplated by this Agreement (including Section 2.3 hereof) or as set forth in this Agreement):Section 6.7 of the Seller’s Disclosure Schedule, as the case may be) to adhere to the following:
(a) the business of it and its Subsidiaries each member of the Subject Company Group shall be conducted in the ordinary and usual course consistent with past practices and, to the extent consistent therewith, it and its Subsidiaries each member of the Subject Company Group shall use their its respective commercially reasonable efforts to preserve intact its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, strategic partners, creditors, lessors, employees Employees and business associates;
(b) it no member of the Subject Company Group shall not (i) issue, sell, pledge, dispose of or encumber any capital stock or other equity interests owned by it in any of its the Subject Subsidiaries; (ii) amend its certificate of incorporation or by-lawsOrganizational Documents; (iii) other than in the case of wholly-owned subsidiariesrecapitalize, split, combine or reclassify its outstanding shares of capital stockstock or, in the case of the LLC, limited liability company interests; (iv) declare, set aside or pay any dividend or other distribution payable in cash, stock property, assets, stock, rights or other securities or property in respect of any capital stockstock or, other than dividends from its direct or indirect wholly-owned Subsidiariesin the case of the LLC, limited liability company interests; or (v) purchaserepurchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or, in the case of the LLC, limited liability company interests, or any securities convertible into or exchangeable or exercisable for any shares of its capital stockstock or, in the case of the LLC, limited liability company interests;
(c) neither it nor any no member of its Subsidiaries the Subject Company Group shall (i) issue, sell, pledge, dispose of or encumber (A) any shares of its capital stock or, in the case of any classthe LLC, Rights limited liability company interests, or any Voting Debt, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, directly or indirectly, any shares of its capital stock or, in the case of the LLC, limited liability company interests, of any class, Rights, any Voting Debt or any other property or assets (other than shares of Company Common Stock and associated Rights issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans); or (ii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire of or encumber any other material property or material assets (including capital stock of any of its their Subsidiaries) or businessmodify in any material respect or incur any material indebtedness or other material liability, except, in each case, in the ordinary and usual course of business consistent with past practices; or (iii) make any commitment for, make or authorize any capital expenditures other than in the ordinary course of business or, by any means, make any acquisition of, or investment in, the assets or stock of any other Person;
(d) neither it nor any of its Subsidiaries shall restructure, recapitalize, reorganize or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the operation of its assets or businesses or adopt resolutions providing for or authorizing any no member of the foregoingSubject Company Group shall settle or compromise any claims or litigation alleging any loss, injury or illness resulting from or relating to any product that has been alleged to contain asbestos or asbestos-containing material;
(e) no member of the Subject Company Group shall settle or compromise any material claims or litigation if such settlement imposes an uninsured obligation on any member of the Subject Company Group in excess of $250,000 or does not give the relevant member of the Subject Company Group a release from all material liability related to such claim; provided, however, that with respect to claims or litigation (including any Tax controversy) with respect to Taxes of any member of the Subject Company Group or with respect to the Airtex Division Assets prior to the contribution to the LLC, neither it the Seller nor any member of the Subject Company Group shall settle or compromise any such claims or litigation, if settling such claim is reasonably expected to have an adverse effect on any member of the Subject Company Group or Purchaser in excess of $25,000 in the aggregate for all such parties (i) for taxable periods beginning on and after the Closing Date for AAC and Wxxxx Canada and any other member of the Subject Company Group for which a taxable period begins on the Closing Date, (ii) for taxable periods beginning after the Closing Date, in the case of Purchaser and other members of the Subject Company Group, and (iii) in the case of all members of the Subject Company Group, the portion of any Straddle Period that begins after the Closing Date;
(f) no member of the Subject Company Group shall enter into, extend, renew, terminate or modify or amend in any material respect any of the Material Contracts or waive, release or assign any material rights or claims, other than entering into any Material Contract of the type described in Sections 4.10(a)(i), (ii), (vii) or (viii) in the ordinary course of business consistent with past practices;
(g) neither Seller nor any member of the Subject Company Group shall permit any insurance policy naming any member of the Subject Company Group as a beneficiary or loss-payable payee to be canceled or terminated;
(h) no member of the Subject Company Group shall (i) adopt any new Benefit Plan, make any amendment to any existing Benefit Plan which has the effect of increasing benefits under any existing Benefit Plan in any material respect, except for changes as may be required by Applicable Law and except as set forth in Sections 8.1(a) and 8.1(e) hereof or (ii) increase any compensation payable to any employee, except for (A) normal increases in salaries in the ordinary and usual course of business payable to any employee or (B) the payment of cash bonuses to employees pursuant to and consistent with existing plans or programs, and (iii) except as consistent with past practices and other than employment agreements with new hires substantially in the form previously disclosed to Purchaser and scheduled on Section 4.8(a) of the Seller’s Disclosure Schedule, enter into, amend in any material respect or terminate any employment, severance, termination, non-competition, non-solicitation or confidentiality or similar agreement with any of its Subsidiaries shall acquire present or future employees, officers or directors;
(i) make any Tax election, if the election pertains to any member of the Subject Company Group or the Airtex Division Assets prior to the contribution to the LLC, if doing so would be reasonably expected to have an adverse effect on any member of the Subject Company Group or Purchaser in excess of $25,000 in the aggregate for all such parties (i) for taxable periods beginning on and after the Closing Date for AAC and Wxxxx Canada and any other member of the Subject Company Group for which a taxable period begins on the Closing Date, (ii) for taxable periods beginning after the Closing Date, in the case of Purchaser and other members of the Subject Company Group, and (iii) in the case of all members of the Subject Company Group, the portion of any Straddle Period that begins after the Closing Date;
(j) no member of the Subject Company Group shall make a material change in its accounting methods, practices or procedures, except as maybe required by merging Applicable Law or consolidating withU.S. GAAP;
(k) the Subject Company Group shall (i) make capital expenditures in the ordinary course of business and (ii) make the Neapco Capital Expenditures required to be made in the ordinary course of business prior to Closing;
(l) no member of the Subject Company Group shall knowingly take any action or omit to take any action that would cause any of its representations and warranties herein to become untrue in any material respect;
(m) no member of the Subject Company Group shall fail, in any material respect, to pay its accounts payable in accordance with its customary business practices or by purchasing take any action to materially accelerate the collection of accounts receivable outside of the ordinary course of business consistent with past practices;
(n) Seller shall not (i) subject to any Encumbrances (other than Permitted Encumbrances) any of the properties, assets or capital stock or other securities of any member of the Subject Company Group, (ii) permit any member of the Subject Company Group to enter into or agree to enter into any merger or consolidation with any corporation or other entity, (iii) permit any member of the Subject Company Group to purchase substantially all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (iiiv) permit any assets that are material, individually or in member of the aggregate, Subject Company Group to the Company and make any of its Subsidiaries, taken as a wholeloans to any Person, except purchases for advances of inventory and raw materials in the ordinary course of business (or as permitted by Section 7.1(g), whether or not material);
(f) neither it nor any of its Subsidiaries shall (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant expenses to the Credit Agreement employees in the ordinary course of business);
(o) Except for this Agreement, (ii) issueprior to Closing Seller shall, sell or amend any debt securities or warrants or other rights to acquire any debt securities and cause each member of the Subject Company Group to, terminate, with no further obligation whatsoever on behalf of any member of the Subject Company Group, each contract or agreement, whether written or oral, between the Seller or any Affiliate of its Subsidiariesthe Seller (other than a member of the Subject Company Group) and such member of the Subject Company Group;
(p) no member of the Subject Group Company shall factor or assign as collateral to any financing source accounts receivable other than the factoring of receivables by Airetx (Spain) pursuant to the Airtex (Spain) Factoring Agreements in an amount not to exceed $2 million; and
(q) Seller shall not, guarantee any debt securities and no member of another Personthe Subject Company Group shall, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person authorize or enter into any arrangement having the economic effect of an agreement to do any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(g) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters);
(h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measures;
(l) neither it nor any of its Subsidiaries shall make or rescind any material Tax election, amend any material Tax Return or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, in each case except in a manner consistent with past practice or as required by applicable Law;
(m) other than with respect to any actions permitted under Section 7.2, neither it nor any of its Subsidiaries shall take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VIII not being satisfied; and
(n) neither it nor any of its Subsidiaries will authorize any of, or commit, resolve or agree, in writing or otherwise, to take, any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operations.
Appears in 1 contract
Samples: Purchase Agreement (Chefford Master Manufacturing Co Inc)
Interim Operations. The Company covenants and agrees as to itself and ------------------ its Subsidiaries that, after the date hereof and prior to the Effective Time (unless Parent shall otherwise consent approve in writing, which consent approval shall not be unreasonably be withheldwithheld or delayed, and except as otherwise expressly contemplated by this Agreement or as set forth in this Agreement):
(a) the The business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, strategic partners, creditors, lessors, employees and business associates;
(b) it It shall not not, (i) issue, sell, pledge, sell or otherwise dispose of or encumber subject to any capital stock owned by it in Lien (other than Permitted Liens) any of its Subsidiaries' Capital Stock owned by it; (ii) amend its certificate of incorporation charter or by-lawsbylaws, except for any amendment contemplated by this Agreement; (iii) other than in the case of wholly-owned subsidiaries, split, combine or reclassify its outstanding shares of capital stockCapital Stock; (iv) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, other than dividends from its direct or indirect wholly-owned SubsidiariesCapital Stock; or (v) purchaserepurchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, acquire or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock Capital Stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stockCapital Stock; or (vi) adopt a plan of complete or partial liquidation or dissolution, merger or otherwise restructure or recapitalize or consolidate with any Person other than Merger Sub or another wholly-owned Subsidiary of Parent;
(c) neither Neither it nor any of its Subsidiaries shall (i) authorize for issuance or issue, sell, pledge, sell or otherwise dispose of or encumber subject to any Lien (Aother than Permitted Liens) any shares of its capital stock of any class, Rights or any Voting Debtof, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock Capital Stock of any class, Rights, class or any Voting Debt or any other property or assets (other than shares of Company Common Stock and associated Rights Shares issuable pursuant to options and other stock-based awards Company Options outstanding on the date hereof under the Company Stock Planshereof); or (ii) other than in the ordinary and usual course of business, transfer, lease, license, guarantee, sell, mortgage, pledge, sell or otherwise dispose of, abandon, cancel, surrender of or allow subject to lapse any Lien (other than Permitted Liens) any other property or expire assets or encumber incur or modify any material property indebtedness or material assets other liability (including capital stock except for additional borrowings in the ordinary course under lines of credit in existence on the date hereof); (iii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any of its Subsidiaries) or business;
(d) neither it nor any of its Subsidiaries shall restructure, recapitalize, reorganize or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the operation of its assets or businesses or adopt resolutions providing for or authorizing any of the foregoing;
(e) neither it nor any of its Subsidiaries shall acquire (i) by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, Person except purchases of inventory and raw materials in the ordinary course of business and except for obligations of Subsidiaries of the Company incurred in the ordinary course of business; (iv) make any loans to any other Person (other than to Subsidiaries of the Company or, customary loans or as permitted advances to employees in connection with business-related travel in the ordinary course of business consistent with past practices); or (v) make any commitments for, make or authorize any capital expenditures other than in amounts less than $250,000 individually and $1,000,000 in the aggregate or, by Section 7.1(g)any means, whether make any acquisition of, or not material)investment in, assets or stock of any other Person;
(fd) Except as may be required to comply with applicable law or by existing contractual commitments, neither it nor any of its Subsidiaries shall (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business), (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” new agreements or other agreement to maintain commitments for any financial statement condition of another Person severance or termination pay to, or enter into any arrangement having the economic effect of any of the foregoingemployment or severance agreement with, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct directors, officers or indirect wholly owned Subsidiaries, employees or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed consultants except for reasonable severance payments made to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(g) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters);
(h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except employees in the ordinary course of business and consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix)practices, or (ii) except to the extent permitted by Section 7.2(a) of this Agreementterminate, establish, adopt, enter into, renewmake any new grants or awards under, amend or otherwise modify, amendany Compensation and Benefit Plan or increase or accelerate the salary, terminatewage, waivebonus or other compensation of any employees or directors (except for increases occurring in the ordinary and usual course of business, delay the exercise ofwhich shall include normal periodic performance reviews and related compensation and benefit increases, but not any general across-the-board increases) or release consultants or assign pay or agree to pay any material rights pension, retirement allowance or claims under, other employee benefit not required by any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subjectexisting Compensation and Benefit Plan;
(je) neither Neither it nor any of its Subsidiaries shall, except as may be required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any a result of a change in controllaw or in GAAP, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding change any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Scheduleaccounting principles, amend practices or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted methods used by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above)it;
(kf) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company Neither it nor any of its Subsidiaries shall initiaterevalue in any respect any of its material assets, settle including writing down the value of inventory or compromise any litigationwriting-off notes or accounts receivable, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); provided, however, that notwithstanding any other provision of this Agreement, neither the Company practices;
(g) Neither it nor any of its Subsidiaries shall enter into any settlement of settle or compromise any litigation, claim, grievance, charge material claims or proceeding that, whether at the time of the settlement litigation or compromise terminate or at any time in the future, materially increases the labor amend or operating costs of the Company or modify any of its Subsidiaries material Contracts or places waive, release or assign any material restrictions on the ability of the Company rights or any of its Subsidiaries to impose any labor saving or other cost reduction measuresclaims;
(lh) neither Neither it nor any of its Subsidiaries shall make or rescind any material Tax election, amend any material Tax Return election or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled canceled or terminated, in each case except in a manner consistent with past practice or as required by applicable Law;
(mi) other than with respect to any actions permitted under Section 7.2, neither Neither it nor any of its Subsidiaries shall take any action or omit to take any action that is reasonably likely would cause any of its representations and warranties herein to result become untrue in any of the conditions to the Merger set forth in Article VIII not being satisfiedmaterial respect; and
(nj) neither Neither it nor any of its Subsidiaries will authorize or enter into any of, or commit, resolve or agree, in writing or otherwise, agreement to take, do any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operationsforegoing.
Appears in 1 contract
Interim Operations. The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless Parent shall otherwise consent approve in writing, which consent approval shall not be unreasonably be withheld, and except as otherwise expressly contemplated by this Agreement or as set forth in this Agreement):
): (a) the business of it and its Subsidiaries shall be conducted in the ordinary and usual course consistent with past practices and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, strategic partners, creditors, lessors, employees and business associates;
; (b) it shall not not, (i) issue, sell, pledge, sell otherwise dispose of or encumber any capital stock owned by it in subject to Lien (other than Permitted Liens) any of its Subsidiaries' Capital Stock owned by it; (ii) amend its certificate of incorporation or charter, by-lawslaws or, except for any amendment which will not hinder, delay or make more costly to Parent the Offer or the Merger; the Rights Agreement; (iii) other than in the case of wholly-owned subsidiaries, split, combine or reclassify its outstanding shares of capital stockCapital Stock; (iv) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, Capital Stock other than dividends from its direct or indirect wholly-owned Subsidiariesthe issuance of Rights in connection with the issuance of Capital Stock upon the exercise of Company Options; or (v) purchaserepurchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, acquire or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock Capital Stock; or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
Capital Stock; or (vi) adopt a plan of complete or partial liquidation or dissolution, merger or otherwise restructure or recapitalize or consolidate with any Person other than Merger Sub or another wholly-owned Subsidiary of Parent; (c) neither it nor any of its Subsidiaries shall (i) authorize for issuance or issue, sell, pledge, sell or otherwise dispose of or encumber subject to any Lien (Aother than Permitted Liens) any shares of its capital stock of any class, Rights or any Voting Debtof, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock Capital Stock of any class, Rights, class or any Voting Debt or any other property or assets (other than shares of Company Common Stock and associated Rights Shares issuable pursuant to options and other stock-based awards Company Options outstanding on the date hereof under hereof, the grant of Company Options to newly hired employees in accordance with a benefit matrix previously provided to Parent and after notification of Parent and automatic grants of director stock options as mandated by the Company's First Amended 1988 Nonqualified Stock PlansOption Plan for Outside Directors); or (ii) other than in the ordinary and usual course of business consistent with past practices, transfer, lease, license, guarantee, sellsell or otherwise dispose of or subject to any Lien (other than Permitted Liens) any other property or assets or incur or modify any material indebtedness or other liability (except for additional borrowings in the ordinary course under lines of credit in existence on the date hereof); (iii) assume, mortgageguarantee, pledgeendorse or otherwise become liable or responsible (whether directly, dispose contingently or otherwise) for the obligations of any other Person except in the ordinary course of business consistent with past practices and except for obligations 16 22 of Subsidiaries of the Company incurred in the ordinary course of business; (iv) make any loans to any other Person (other than to Subsidiaries of the Company or, customary loans or advances to employees in connection with business-related travel in the ordinary course of business consistent with past practices); or (v) make any commitments for, make or authorize any capital expenditures other than in amounts less than $150,000 individually and $3,000,000 in the aggregate or, by any means, make any acquisition of, abandonor investment in, cancel, surrender assets or allow to lapse or expire or encumber any material property or material assets (including capital stock of any of its Subsidiaries) or business;
other Person; (d) except as may be required to comply with applicable law or by existing contractual commitments, neither it nor any of its Subsidiaries shall restructure, recapitalize, reorganize or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise (i) enter into any new agreements or commitments for any severance or termination pay to, or enter into any employment or severance agreement or arrangement imposing material changes or restrictions on the operation with, any of its assets directors, officers or businesses employees or adopt resolutions providing consultants except for or authorizing any (a) specific arrangements with ten of the foregoing;
Company's employees and one of its directors which have been previously disclosed to Parent and (b) reasonable severance payments made to employees in the ordinary course of business and consistent with past practices, or (ii) terminate, establish, adopt, enter into, make any new grants or awards under, amend or otherwise modify, any Compensation and Benefit Plan or increase or accelerate the salary, wage, bonus or other compensation of any employees or directors (except for increases occurring in the ordinary and usual course of business, which shall include normal periodic performance reviews and related compensation and benefit increases, but not any general across-the-board increases) or consultants or pay or agree to pay any pension, retirement allowance or other employee benefit not required by any existing Compensation and Benefit Plan; (e) neither it nor any of its Subsidiaries shall acquire (i) by merging shall, except as may be required as a result of a change in law or consolidating within GAAP, or by purchasing all or a substantial portion change any of the assets of accounting principles or any stock of, or practices used by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, except purchases of inventory and raw materials in the ordinary course of business (or as permitted by Section 7.1(g), whether or not material);
it; (f) neither it nor any of its Subsidiaries shall (i) incur revalue in any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business), (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or respect any of its Subsidiariesmaterial assets, guarantee any debt securities including writing down the value of another Personinventory or writing-off notes or accounts receivable, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
business consistent with past practices; (g) neither it nor any of its Subsidiaries shall make settle or compromise any capital expenditures material claims or other expenditures with respect to propertylitigation or terminate or materially amend or modify any of its material Contracts or waive, plant release or equipment in excess of $10 million per quarter in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in assign any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters);
material rights or claims; (h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measures;
(l) neither it nor any of its Subsidiaries shall make or rescind any material Tax election, amend any material Tax Return election or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled canceled or terminated, in each case except in a manner consistent with past practice or as required by applicable Law;
; (mi) other than with respect to any actions permitted under Section 7.2, neither it nor any of its Subsidiaries shall take any action or omit to take any action that is reasonably likely would cause any of its representations and warranties herein to result become untrue in any of the conditions to the Merger set forth in Article VIII not being satisfiedmaterial respect; and
and (nj) neither it nor any of its Subsidiaries will authorize or enter into any of, or commit, resolve or agree, in writing or otherwise, agreement to take, do any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operationsforegoing.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time date on which Purchaser's nominees comprise a majority of the Board of Directors of the Company (unless Parent Praxair shall otherwise consent approve in writing, which consent shall not unreasonably be withheld, writing and except as otherwise expressly contemplated by this Agreement or as set forth in this Agreement):
(ai) the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially its reasonable best efforts to preserve its business organization intact and maintain its existing relations rela- tions and goodwill with customers, suppliers, distributors, strategic partners, creditors, lessors, employees and business associates;; 27
(bii) it shall not (iA) issue, sell, pledge, dispose of sell or encumber pledge any capital stock owned by it in any of its Subsidiaries; (iiB) amend the Company Charter or its certificate of incorporation or by-lawslaws or amend, modify or terminate the Rights Agreement; (iiiC) other than in the case of wholly-owned subsidiaries, split, combine or reclassify its outstanding shares of capital stock; (ivD) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, Shares or Preferred Shares other than regular quarterly or semi- annual cash dividends from its direct not in excess of $0.12 per Share and regular quarterly or indirect whollysemi-owned Subsidiariesannual cash dividends on the Preferred Shares; or (vE) purchaserepurchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stockstock except in connection with the ordinary course of operations of the CBI Salaried Employee Stock Ownership Plan (1987);
(ciii) neither it nor any of its Subsidiaries shall except as disclosed in Section 7.1(a) of the Company Disclosure Letter (iA) issue, sell, pledge, dispose of or encumber (A) encumber, or authorize or propose the issuance, sale, pledge, disposition or encumbrance of, any shares of its capital stock of any class, Rights or any Voting Debtof, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class, Rights, class or any Voting Debt or any other property or assets (other than shares of Company Common Stock and associated Rights Shares issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans)Plan or upon conversion of Convertible Preferred Shares; or (iiB) other than in the ordinary and usual course of busi- ness, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender of any other property or allow to lapse or expire assets or encumber any material property or material assets (including capital stock of any of its Subsidiaries) or businessincur or modify any material indebtedness or other liability; or (C) make any commitments for, make or authorize any capital expenditures other than existing capital expenditures required to be made pursuant to existing capital projects, as set forth in Section 7.1(a)(iii) of the Company Disclosure Letter, which have been previously authorized or, by any means, make any acquisition of, or investment in, assets or stock of any other Person or entity;
(div) except as disclosed in Section 7.1(a) of the Company Disclosure Letter, neither it nor any of its Subsidiaries shall terminate, establish, adopt, enter into, make any new grants or awards under, amend or otherwise modify, any Compensation and Benefit Plans or increase the salary, wage, bonus or other compensation of any employees other than increases in compensation in the ordinary course 28 of business, in each case, consistent with past practices with regard to frequency and amount;
(v) neither it nor any of its Subsidiaries shall restructuresettle or compromise any material claims or litigation or, recapitalizeexcept in the ordinary and usual course of business modify, reorganize amend or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into terminate any agreement or arrangement imposing material changes or restrictions on the operation of its assets material Contracts or businesses waive, release or adopt resolutions providing for assign any material rights or authorizing any of the foregoingclaims;
(e) neither it nor any of its Subsidiaries shall acquire (i) by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, except purchases of inventory and raw materials in the ordinary course of business (or as permitted by Section 7.1(g), whether or not material);
(f) neither it nor any of its Subsidiaries shall (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business), (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(gvi) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters);
(h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measures;
(l) neither it nor any of its Subsidiaries shall make or rescind any material Tax election, amend any material Tax Return election or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, in each case terminated except in a manner consistent with past practice or as required by applicable Law;
(m) other than with respect to any actions permitted under Section 7.2, neither it nor any the ordinary and usual course of its Subsidiaries shall take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VIII not being satisfiedbusiness; and
(nvii) neither it nor any of its Subsidiaries will authorize any of, or commit, resolve or agree, in writing or otherwise, enter into an agreement to take, do any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operationsforegoing.
Appears in 1 contract
Interim Operations. (a) CPI covenants and agrees that, after the date hereof and prior to the CPI Merger Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld or delayed, and except as set forth in Section 6.1(a) of the CPI Disclosure Letter, or as otherwise contemplated by this Agreement, the Asset Purchase Agreement or the Ancillary Agreements):
(i) it shall conduct its business as a holding company for Company Shares in the ordinary course of business, consistent with past practice and comply in all material respects with all applicable Laws, including Environmental Laws;
(ii) it shall not (A) issue, sell, pledge, dispose of or encumber any Company Shares; (B) amend its certificate of incorporation or bylaws except pursuant to the Recapitalization Amendment; (C) split, combine or reclassify its outstanding shares of capital stock, except pursuant to the Recapitalization Amendment; or (D) repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock except pursuant to the Recapitalization Amendment;
(iii) it shall not issue, sell, pledge, dispose of or encumber any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class or any CPI Voting Debt or any material property or assets except pursuant to the Recapitalization Amendment;
(iv) it shall not incur any material liability or obligation or otherwise engage in any activity or take any action other than in furtherance of the consummation of the transactions pursuant to this Agreement in accordance with the provisions of this Agreement; provided, however, that prior to the due adoption of this Agreement by holders of the Company Shares constituting the Company Requisite Vote, CPI shall not be prohibited by this clause (iv) from providing information at the Company's request in response to a request therefor by a Person who has made an unsolicited bona fide written Acquisition Proposal pursuant to clause (B) of the proviso in Section 6.2(a) or from participating in negotiations or discussions by the Company with a Person pursuant to clause (C) of the proviso in Section 6.2(a);
(v) it shall not change in any material respect any of the accounting principles or practices used by it, except as may be required as a result of a change in GAAP; and
(vi) it shall not make any tax election without prior notice to Parent, except in the ordinary course of business; and
(vii) it shall not authorize or enter into an agreement to do any of the foregoing.
(b) The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Company Merger Effective Time (unless Parent shall otherwise consent approve in writing, which consent approval shall not be unreasonably be withheldwithheld or delayed, and except as otherwise expressly contemplated by this Agreement, the Company Disclosure Letter, the Asset Purchase Agreement or as set forth in this Agreementthe Ancillary Agreements):
(ai) it shall operate the business of it and its Subsidiaries shall be conducted (other than such portion as comprises the Business) only in the ordinary course of business, consistent with past practice and usual course in material compliance with all applicable Laws, and, to the extent consistent therewithwith such operation, use commercially reasonable efforts to: (A) preserve the present business organization intact; and (B) preserve any beneficial business relationships with all customers, suppliers, Government Entities, and others having business dealings with the business of it and its Subsidiaries shall use their respective commercially reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, strategic partners, creditors, lessors, employees and business associates(other than such portion as comprises the Business);
(bii) it shall maintain (A) the material assets of the Company and its Subsidiaries (other than the Purchased Assets) in such condition and repair consistent with past practice, and (B) insurance upon all of the material assets of the Company and its Subsidiaries (other than the Purchased Assets) and with respect to the conduct of the business of the Company and its Subsidiaries (other than the Business) in full force and effect, comparable in amount, scope, and coverage to that in effect on the date of this Agreement;
(iii) it shall not (iA) authorize, issue, deliver, sell, pledge, dispose of or encumber any capital stock owned by it in any of its SubsidiariesSubsidiaries that are not Transferred Subsidiaries (as defined in the Asset Purchase Agreement); (iiB) amend its or its Subsidiaries' or certificate of incorporation or by-lawsbylaws or equivalent organizational documents; (iiiC) other than in the case of wholly-owned subsidiaries, split, combine or reclassify (including causing the conversion of Class B Common Shares to Common Shares pursuant to Article FOURTH, Section 2(e)(1)(iii) of the certificate of incorporation of the Company) its or its Subsidiaries' outstanding shares of capital stock; (ivD) declare, set aside aside, make or pay any dividend payable in cash, stock stock, property or property otherwise in respect of any capital stock, stock other than dividends from its direct or indirect wholly-wholly owned SubsidiariesSubsidiaries and other than, in the case of the Company, regular quarterly cash dividends not in excess of $0.08 per Company Share per quarter (paid to record holders of stock on a date set consistent with past practice); or (vE) purchaserepurchase, redeem or otherwise acquire, except for except, in the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment case of the exercise price payable by such holder upon exercise of Company in each case set forth above, in connection with the Stock Options to the extent required or permitted under the terms of such Company Stock OptionsPlans, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(civ) neither it nor any of its Subsidiaries that are not Transferred Subsidiaries shall (iA) issue, authorize, deliver, grant, sell, pledge, dispose of or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debtof, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class, Rights, class or any Company Voting Debt or any other property or assets (other than shares than, in the case of the Company, Company Common Stock and associated Rights Shares issuable pursuant to options and other stock-based awards Company Options or Stock Awards outstanding on the date hereof under the Company Stock Plans); (B) lease or otherwise dispose of, or grant or sell any option or right to purchase that portion of the Company's business that does not include the Purchased Assets, except in the ordinary course of business, consistent with past practice; or (iiC) sell, assign, transfer, leaseconvey or otherwise dispose of any material asset or right of the Company or subject any of the assets of the Company (other than the Purchased Assets) to any further material lien, charge, license, guarantee, sell, mortgage, pledge, dispose ofsecurity interest or similar encumbrance (each, abandonan "Encumbrance"), cancelother than (i) Permitted Encumbrances (as defined in the Asset Purchase Agreement) (ii) as reflected, surrender reserved or allow otherwise disclosed in the Audited Pro Forma Financial Statements, the Interim Pro Forma Financial Statements or the financial statements included in or incorporated by reference in the Company Reports filed prior to lapse the date of this Agreement or expire or encumber any material property or material assets (including capital stock iii) in the ordinary course of any of its Subsidiaries) or business, consistent with past practice;
(dv) neither it nor any of its Subsidiaries shall restructureterminate, recapitalizeestablish, reorganize adopt, enter into, make any new grants or completely or partially liquidate or adopt a plan of complete or partial liquidation awards under, amend or otherwise enter into modify, any agreement Compensation and Benefit Plans or arrangement imposing material changes or restrictions that would be a Compensation and Benefit Plan if it were in effect on the operation date hereof, or pay or promise to pay, any bonus, profit-sharing or special compensation to the Employees or Directors or make any increase in the compensation or benefits payable or to become payable to any of its assets such Employees or businesses Directors, or adopt resolutions providing hire, without the consent of Parent which consent shall not be unreasonably withheld, any employee who would be entitled to an annual base salary greater than $100,000, except (A) for changes that are required by applicable Law, (B) to satisfy obligations under the terms of any Compensation and Benefit Plan in effect as of the date hereof, (C) for increases in compensation that are made in the ordinary course of business consistent with past practice (which shall include normal periodic performance reviews and related compensation and benefit increases), which increases their effective dates for corporate officers are set forth in Section 6.1(b)(v) of the Company Disclosure Letter and (D) for employment arrangements for or authorizing grants of awards, other than equity-based awards, to newly hired employees (hired in accordance with this paragraph) in the ordinary course of business consistent with past practice; provided, however, that nothing in this clause (v) shall permit any of the foregoingaction that would otherwise be prohibited by clause (iv)(A) above;
(evi) except in the ordinary course of business consistent with past practice or in connection with the Assets Purchase, neither it nor any of its Subsidiaries shall acquire (i) by merging enter into or consolidating withterminate any Company Contract, or by purchasing all or a substantial portion of the assets of or make any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or change in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, except purchases of inventory and raw materials in the ordinary course of business (or as permitted by Section 7.1(g), whether or not material)Company Contracts;
(f) neither it nor any of its Subsidiaries shall (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business), (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(gvii) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters);
(h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measures;
(l) neither it nor any of its Subsidiaries shall make or rescind any material Tax election, amend any material Tax Return tax election or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled canceled or terminatedterminated without prior notice to Parent, in each case except in a manner consistent the ordinary and usual course of business or in connection with past practice or as required by applicable Lawthe Assets Purchase;
(mviii) other than with respect to any actions permitted under Section 7.2, neither it nor any of its Subsidiaries shall take (A) acquire (by merger, consolidation or acquisition of stock or assets) or sell (by merger, consolidation or sale of stock or assets) any action corporation, partnership or omit other business organization or division thereof or any assets in each case, which are material to take the Company and its Subsidiaries taken as a whole other than in connection with the Assets Purchase, (B) incur any action that is reasonably likely to result long-term indebtedness for money borrowed or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans, advances or capital contributions to, or investments in any other person (other than a Subsidiary or Transferred Subsidiary of the conditions Company or in connection with the Assets Purchase), in each case, other than (x) in the ordinary course of business consistent with past practice or (y) any letter of credit entered into in the ordinary course of business consistent with past practice, (C) authorize any new capital expenditures which are, in the aggregate, in excess of $500,000 other than unforeseen capital expenditures that may be necessary to operate the business 45 consistent with past practice or (D) authorize any new commitments for taurolidine spending which are, in the aggregate, in excess of $500,000 (it being understood that commitments made prior to the Merger set forth in Article VIII date hereof with respect to pre-clinical work or clinical studies are not being satisfied; andcovered by these limitations);
(nix) neither it nor any of its Subsidiaries will authorize shall change in any of, or commit, resolve or agree, in writing or otherwise, to take, material respect any of the foregoing actionsaccounting principles or practices used by it, except as may be required as a result of a change in SEC guidelines or GAAP;
(x) neither it nor any of its Subsidiaries shall pay, discharge or satisfy any liabilities or Obligations, other than any payment, discharge or satisfaction (A) in the ordinary course of business consistent with past practice, (B) in accordance with the terms of any such liabilities or Obligations, (C) which does not involve an amount in excess of $100,000, or (D) as set forth in Section 6.1(b)(x) of the Company Disclosure Letter;
(xi) neither it nor any of its Subsidiaries shall settle or compromise any litigation pending against the Company (whether or not commenced prior to the date of this Agreement) other than settlements or compromises of litigation or where the amount paid (less the amount reserved for such matters by the Company or covered by insurance) in settlement or compromise in each case does not exceed $100,000 or $500,000 in the aggregate;
(xii) neither it nor any of its Subsidiaries shall effectuate a "plant closing" or "mass layoff," as those terms are defined in WARN or any state or local law, affecting in whole or in part any site of employment, facility, operating unit or employee;
(xiii) neither it nor any of its Subsidiaries shall adopt a plan of complete or partial liquidation, dissolution, consolidation, restructuring, recapitalization, merger or other reorganization of the Company or any of its Subsidiaries (other than the Mergers and the Assets Purchase);
(xiv) neither it nor any of its Subsidiaries shall involuntarily separate any Employee from employment with the Company without due cause; and
(xv) neither it nor any of its Subsidiaries shall authorize or enter into an agreement to do any of the foregoing.
(c) The provisions of this Section 6.1 notwithstanding, nothing in this Agreement shall be construed or interpreted to prevent the Company or any Subsidiary from (i) entering into the Asset Purchase Agreement and the Ancillary Agreements or complying with any of the terms thereof (ii) subject to Section 8.8, of the Asset Purchase Agreement making, accepting or settling intercompany advances to, from or with one another; (iii) subject to Section 6.21(b), causing any Subsidiary to pay or distribute to the Company all cash, money market instruments, bank deposits, certificates of deposit, other cash equivalents, marketable securities and other investment securities then owned or held by such Subsidiary; (iv) subject to Section 6.21(b), causing any Subsidiary which owns or holds any Purchased Assets to transfer such assets to the Company or its nominee prior to the Closing by means of a dividend, distribution in kind or other transfer without consideration; or (v) subject to Section 6.21(b), engaging in any other transaction incident to the normal cash management procedures of the Company and its Subsidiaries, including, without limitation, short-term investments in bank deposits, money market instruments, time deposits, certificates of deposit and bankers' acceptances and borrowings for working capital purposes and purposes of providing additional funds to Subsidiaries made, in each case, in the ordinary course of business, consistent with past practice; provided, however, that nothing contained in neither the Company nor any of its Subsidiaries may take any action pursuant to this Agreement shall give Section 6.1(c) to Parent, directly or indirectly, rights to control or direct the operations extent such action would have a material adverse effect on the Tax liability of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision or any of its and its Subsidiaries’ operationsSubsidiaries without the prior written consent of Parent, which shall not be unreasonably withheld or delayed.
Appears in 1 contract
Samples: Agreement and Plan of Merger (MCC Acquisition Holdings Corp)
Interim Operations. (a) The Company and STI each covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (except for subsection (iii) below which will continue after the Effective Time) (unless Parent STI or the Company, as the case may be, shall otherwise consent approve in writing, which consent approval shall not be unreasonably be withheldwithheld or delayed, and except as otherwise expressly contemplated by this Agreement or in its respective Disclosure Letter or as set forth in this Agreementrequired by applicable Law):
(ai) the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially all reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, regulators, distributors, strategic partners, creditors, lessors, employees and business associates;
(bii) it shall not (i) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (iiA) amend its certificate of incorporation or by-by- laws; (iiiB) other than in the case of wholly-owned subsidiaries, split, combine combine, subdivide or reclassify its outstanding shares of capital stock; (ivC) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, other than dividends from its direct or indirect wholly-owned Subsidiaries; or (vD) purchaserepurchase, redeem or otherwise acquire, except for in the acquisition case of shares STI, in connection with the redemption of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, outstanding STI Redeemable Warrants or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(ciii) neither it nor any of its Subsidiaries shall (i) issue, sell, pledge, dispose knowingly take or fail to take any action if the result of such taking or encumber failure would be to (A) any shares prevent the Merger from qualifying for "pooling of its capital stock interests" accounting treatment or as a "reorganization" within the meaning of any class, Rights or any Voting Debt, Section 368(a) of the Code or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class, Rights, any Voting Debt or any other property or assets (other than shares of Company Common Stock and associated Rights issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans); or (ii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire or encumber any material property or material assets (including capital stock of cause any of its Subsidiaries) or businessrepresentations and warranties herein to become untrue in any material respect;
(d) neither it nor any of its Subsidiaries shall restructure, recapitalize, reorganize or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the operation of its assets or businesses or adopt resolutions providing for or authorizing any of the foregoing;
(e) neither it nor any of its Subsidiaries shall acquire (i) by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, except purchases of inventory and raw materials in the ordinary course of business (or as permitted by Section 7.1(g), whether or not material);
(f) neither it nor any of its Subsidiaries shall (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business), (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(g) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters);
(h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measures;
(l) neither it nor any of its Subsidiaries shall make or rescind any material Tax election, amend any material Tax Return or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, in each case except in a manner consistent with past practice or as required by applicable Law;
(m) other than with respect to any actions permitted under Section 7.2, neither it nor any of its Subsidiaries shall take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VIII not being satisfied; and
(n) neither it nor any of its Subsidiaries will authorize any ofauthorize, or commit, resolve or agree, in writing or otherwise, enter into an agreement to take, do any of the foregoing actionsforegoing; providedand
(v) each shall cause its respective Affiliates not to knowingly take or fail to take any action which it has agreed to do, howeveror not do, herein.
(b) STI and the Company agree that nothing contained in any written approval obtained under this Agreement shall give to Parent, directly Section 6.1 may be relied upon by the other party if signed by the President or indirectly, rights to control or direct the operations another executive officer of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operationsother party.
Appears in 1 contract
Interim Operations. The Except (A) as Parent shall otherwise permit (which permission shall not be unreasonably withheld or delayed), (B) as required in order for it to comply with any Law or any contract existing on the date hereof to which the Company or any of its Subsidiaries is bound, (C) as set forth in Section 3.1 of the Company Disclosure Letter, or (D) as otherwise contemplated by this Agreement (including the Recapitalization), the Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless Parent shall otherwise consent in writing, which consent shall not unreasonably be withheld, and except as otherwise expressly contemplated by this Agreement or as set forth in this Agreement):Merger Closing:
(a) the business of it the Company and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it the Company shall and shall cause its Subsidiaries shall to use their respective commercially all reasonable commercial efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, strategic partners, creditors, lessors, employees officers and business associatesemployees;
(b) it shall not (i) issue, sell, pledge, dispose of or encumber any share capital stock owned by it in any of its Subsidiaries; (ii) amend adopt any change to the Company’s and its certificate Subsidiaries’ articles of incorporation or by-lawsbylaws; (iii) other than in amend the case of wholly-owned subsidiariesShareholders Agreement, (iv) split, consolidate, combine or reclassify its issued and outstanding shares of capital stockshare capital; (ivv) declare, set aside or pay any dividend payable in cash, stock shares or property in respect of any share capital stock, other than dividends from its direct or indirect wholly-wholly owned SubsidiariesSubsidiaries and other than regular quarterly cash dividends; or (vvi) purchaserepurchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its share capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stockshare capital;
(c) other than in connection with (i) exercises of Company Warrants or (ii) issuances of shares of Company Common Stock pursuant to options and other share-based awards outstanding on the date hereof under the Company Stock Option Plans or any other Company Benefit Plan, neither it nor any of its Subsidiaries shall (iA) issue, sell, pledge, dispose of or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debtof, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its share capital stock of any class, Rights, any Voting Debt class or any other property or assets assets; (B) other than shares (i) in the ordinary and usual course of Company Common Stock and associated Rights issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans); or business, (ii) dispositions of obsolete assets that are not material to either of the Company’s lines of business, and (iii) Permitted Asset Sales made pursuant to agreements entered into prior to the date hereof, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire of or encumber any material other property or material assets (including share capital stock of any of its Subsidiaries) or businessincur or modify any material indebtedness or other liability; or (C) make or authorize or commit for any capital expenditures other than in the ordinary and usual course of business consistent with the Company’s budgeted capital expenditures as set forth under “Capital Expenditure Budget” in Section 3.1 of the Company Disclosure Letter (it being understood that the timing of budgeted expenditures may be accelerated or decelerated by the Company), and other than capital expenditures in excess of those reflected in such budget to the extent required in order for the R&B Telephone Company and NTELOS Telephone Inc. to continue to meet their public services obligations to provide reasonable service, or, by any means, except to the extent required by existing contractual commitments, make any significant acquisition of, or investment in, assets or shares of or any other interest in, any other Person;
(d) neither it shall nor any of shall it cause its Subsidiaries shall restructure, recapitalize, reorganize to merge or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into consolidate with any agreement or arrangement imposing material changes or restrictions on the operation of its assets or businesses or adopt resolutions providing for or authorizing any of the foregoingother Person;
(e) neither it shall nor any of shall it cause its Subsidiaries shall acquire (i) by merging to terminate, establish, adopt, enter into, make any new grants or consolidating withawards under, amend or by purchasing all or a substantial portion of the assets of or any stock of, or by any other mannerotherwise modify, any business Company Benefit Plans or any corporationincrease the salary, partnershipwage, joint venture, limited liability company, association bonus or other business organization or division thereof, or (ii) compensation of any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a wholeemployees, except purchases of inventory amendments required by Law or otherwise necessary to preserve the intended benefits under such Company Benefit Plans and raw materials salary increases for employees occurring in the ordinary and usual course of business (or as permitted by Section 7.1(g), whether or not material)business;
(f) neither it shall nor any of shall it cause its Subsidiaries shall (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to alter its general practices and policies relating to the Credit Agreement payment and collection, as the case may be, of accounts payable and accounts receivable, in the ordinary course of business)each case, (ii) issue, sell or amend in any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange ratesmaterial respect;
(g) neither it shall nor shall it cause its Subsidiaries to settle or compromise any material claims or litigation or modify, amend or terminate any of its Subsidiaries shall make Designated Contracts or waive, release or assign any capital expenditures material rights or other expenditures with respect to propertyclaims, plant or equipment except for settlements entered into as set forth in excess Section 3.1 of $10 million per quarter in the aggregate for the Company Disclosure Schedule, provided that any such settlement shall constitute a full and complete release of related liabilities or obligations by the Company or its Subsidiaries, taken as a whole (it being understood that if capital expenditures applicable Subsidiary and shall not in any quarter are less than $10 million, manner place material restrictions on the shortfall shall be available to operations of the Company to spend in future quarters)or such Subsidiary;
(h) neither it nor shall use its reasonable commercial efforts to prevent any insurance policy of the Company or its Subsidiaries from being cancelled or terminated prior to the scheduled end of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserveterm;
(i) neither it shall nor any of shall it cause its Subsidiaries shallto enter into any lease or amend an existing lease to increase the obligations under such existing lease (whether of real or personal property) providing for annual rentals of (1) $1,000,000 or more in the aggregate per year or (2) $500,000 per year for a period of three or more years, and, in each case, is not terminable by the Company or its Subsidiaries on 90 days’ or less notice without penalty;
(j) neither it shall nor shall it cause its Subsidiaries to enter into any agreement for the purchase of materials, supplies, goods, services, equipment or other assets that requires either (1) annual payments by the Company and the Subsidiaries of $750,000 or more or (2) aggregate future payments by the Company and the Subsidiaries of $5,000,000 or more, and, in each case is not terminable by the Company or its Subsidiaries on 90 days’ or less notice without penalty;
(k) neither it shall nor shall it cause its Subsidiaries to enter into any sales, distribution or other similar agreement providing for the sale by the Company or any Subsidiary of materials, supplies, goods, services, equipment or other assets (but not including purchases made under tariff) that requires either (1) annual payments to the Company and the Subsidiaries of $500,000 or more or (2) aggregate future payments over the next two years to the Company and the Subsidiaries of $2,500,000 or more, and, in each case is not terminable by the Company or its Subsidiaries on 90 days’ or less notice without penalty;
(l) neither it shall nor shall it cause its Subsidiaries to enter into any partnership, joint venture or other similar agreement or arrangement, except for any IRUs, co-location agreement or other ordinary course commercial business relationships in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein ;
(m) neither it shall permit the Company or any of nor shall it cause its Subsidiaries to incur, assume or guarantee any indebtedness for borrowed money (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of capital leases or in connection with the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (viDebt Financing) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and in amounts and on terms consistent with past practices as to the approval practices, but in any event not exceeding a net total of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above)$2,000,000;
(kn) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which neither it shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of shall it cause its Subsidiaries shall initiate, settle to create or compromise otherwise incur any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding Lien (other than in connection with the enforcement of the Company’s rights under this Agreement and Permitted Liens) on any material asset other than in the ordinary course of business consistent with past practicepractices or as otherwise permitted by the Debt Financing;
(o) neither it shall nor shall it cause its Subsidiaries to (1) enter into any employment, deferred compensation, severance, retirement or other similar agreement entered into with any director or officer of the Company (or any amendment to any such existing agreement), (2) offer of any new severance or termination protection to any director or officer of the Company, or (3) make or authorize a change in compensation or other benefits payable to any director or officer of the Company pursuant to any severance or retirement plans or policies thereof; provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of and its Subsidiaries shall be permitted to enter into such arrangements with any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company new non-executive officer or any of its Subsidiaries non-executive officer that has been promoted or places any material restrictions on the ability of the Company had a change in role or any of responsibilities;
(p) neither it shall nor shall it cause its Subsidiaries to impose any labor saving materially change their accounting principles, practices or other cost reduction measures;
(l) neither it nor any of its Subsidiaries shall make or rescind any material Tax electionmethods, amend any material Tax Return or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, in each case except in a manner consistent with past practice or as required by applicable GAAP or Law;
(mq) other than with respect to any actions permitted under Section 7.2, neither it shall nor any of shall it cause its Subsidiaries shall take any action to authorize or omit enter into an agreement to take any action that is reasonably likely to result in do any of the conditions to the Merger set forth in Article VIII not being satisfiedforegoing; and
(nr) neither it nor any of its Subsidiaries will authorize any of, or commit, resolve or agree, in writing or otherwise, to take, any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with use its reasonable best efforts to consummate the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operationsPermitted Asset Sales pursuant to their terms.
Appears in 1 contract
Interim Operations. (a) The Company and STI each covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (except for subsection (iii) below which will continue after the Effective Time) (unless Parent STI or the Company, as the case may be, shall otherwise consent approve in writing, which consent approval shall not be unreasonably be withheldwithheld or delayed, and except as otherwise expressly contemplated by this Agreement or in its respective Disclosure Letter or as set forth in this Agreementrequired by applicable Law):
(ai) the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially all reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, regulators, distributors, strategic partners, creditors, lessors, employees and business associates;
(bii) it shall not (i) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (iiA) amend its certificate of incorporation or by-by- laws; (iiiB) other than in the case of wholly-owned subsidiaries, split, combine combine, subdivide or reclassify its outstanding shares of capital stock; (ivC) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, other than dividends from its direct or indirect wholly-owned Subsidiaries; or (vD) purchaserepurchase, redeem or otherwise acquire, except for in the acquisition case of shares STI, in connection with the redemption of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, outstanding STI Redeemable Warrants or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(ciii) neither it nor any of its Subsidiaries shall (i) issue, sell, pledge, dispose knowingly take or fail to take any action if the result of such taking or encumber failure would be to (A) any shares prevent the Merger from qualifying for "pooling of its capital stock interests" accounting treatment or as a "reorganization" within the meaning of any class, Rights or any Voting Debt, Section 368(a) of the Code or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class, Rights, any Voting Debt or any other property or assets (other than shares of Company Common Stock and associated Rights issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans); or (ii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire or encumber any material property or material assets (including capital stock of cause any of its Subsidiaries) or businessrepresentations and warranties herein to become untrue in any material respect;
(d) neither it nor any of its Subsidiaries shall restructure, recapitalize, reorganize or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the operation of its assets or businesses or adopt resolutions providing for or authorizing any of the foregoing;
(e) neither it nor any of its Subsidiaries shall acquire (i) by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, except purchases of inventory and raw materials in the ordinary course of business (or as permitted by Section 7.1(g), whether or not material);
(f) neither it nor any of its Subsidiaries shall (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business), (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(g) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters);
(h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measures;
(l) neither it nor any of its Subsidiaries shall make or rescind any material Tax election, amend any material Tax Return or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, in each case except in a manner consistent with past practice or as required by applicable Law;
(m) other than with respect to any actions permitted under Section 7.2, neither it nor any of its Subsidiaries shall take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VIII not being satisfied; and
(n) neither it nor any of its Subsidiaries will authorize any ofauthorize, or commit, resolve or agree, in writing or otherwise, enter into an agreement to take, do any of the foregoing actionsforegoing; providedand
(v) each shall cause its respective Affiliates not to knowingly take or fail to take any action which it has agreed to do, howeveror not do, herein.
(b) STI and the Company agree that nothing contained in any written approval obtained under this Agreement shall give to Parent, directly Section 6.1 may be relied upon by the other party if signed by the Chief Executive Officer or indirectly, rights to control or direct the operations another executive officer of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operationsother party.
Appears in 1 contract
Interim Operations. The Company Each of NationsRent and RSC covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless Parent the other party shall otherwise consent approve in writing, which consent shall not unreasonably be withheld, and except as otherwise expressly contemplated by this Agreement Agreement, disclosed in its respective Disclosure Letter or as set forth in this Agreement):required by applicable Law): 6.
(a) 1.1. the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially its best reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, regulators, distributors, strategic partners, creditors, lessors, employees and business associates;; 6.
(b) 1.2. it shall not (i) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (iiA) amend its certificate of incorporation or by-laws, except that the certificate of incorporation and by-laws of RSC shall be amended as contemplated by the Charter Amendments and Section 5.1.15, respectively; (iiiB) other than in the case of wholly-owned subsidiaries, split, combine combine, subdivide or reclassify its outstanding shares of capital stock; (ivC) declare, set aside or pay any dividend or distribution payable in cash, stock or property in respect of any capital stock, stock (other than dividends from its direct or indirect wholly-owned Subsidiariespursuant to the terms of any Rights Plan (as defined in Section 6.1.3)); or (vD) purchaserepurchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options acquire (other than Rights (as defined in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options Section 6.1.3) pursuant to the extent required or permitted under the terms of such Company Stock Optionsany Rights Plan), or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;; 6.
(c) 1.3. neither it nor any of its Subsidiaries shall (i) issue, sell, pledge, dispose of or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debtof, or (B) securities convertible into or exchangeable or exercisable for, or rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class, Rights, any Voting Debt or any other property or assets class (other than (w) shares of Company Common Stock and associated Rights capital stock issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company NationsRent Stock Plans or RSC Stock Plans, pursuant to the applicable Stock Option Agreement, or pursuant to outstanding options or rights to acquire shares of capital stock described in Section 5.1.2.1 or 5.1.2.2, (x) additional options or rights to acquire shares of capital stock granted under the terms of any NationsRent Stock Plan or RSC Stock Plan, as the case may be, as in effect on the date hereof in the ordinary course of the operation of such Stock Plan, (y) shares of capital stock issuable pursuant to the options or rights described in clause (x) and (z) pursuant to the terms of any stockholder rights protection plan adopted by NationsRent or RSC, as the case may be, after consultation with the other party (with respect to either party, a "Rights Plan"); provided that (A) the terms of any Rights Plan shall provide that none of (I) the acquisition by NationsRent or RSC, as the case may be, of shares of RSC Common Stock or NationsRent Common Stock, respectively, pursuant to, or the exercise or performance by either Party of its rights or obligations under, the RSC Stock Option Agreement or the NationsRent Stock Option Agreement, (II) in the case of any such Rights Plan of RSC, the receipt or ownership by any Person of the shares of RSC Common Stock to be issued in the Merger, (III) the consummation of any of the other transactions contemplated hereby or by the Stock Option Agreements or (iiIV) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender the acquisition by any director or allow officer or any Person who may be deemed to lapse be an "affiliate" of NationsRent or expire or encumber RSC (as determined under Section 6.12) of any material property or material assets (including shares of capital stock of NationsRent or RSC, as the case may be, issuable pursuant to any NationsRent Stock Options or RSC Stock Options, as the case may be, shall be deemed to cause or give rise to any distribution of its Subsidiariesthe rights to purchase capital stock of a Party to be issued pursuant to the applicable Rights Plan (in either case, the "Rights") or business;
to cause such Rights to become void, separable, distributable, unredeemable or exercisable; (dB) neither it RSC or NationsRent nor any officer, director, affiliate or associate of its Subsidiaries NationsRent or RSC (or any group comprised of such persons) shall restructurebe deemed to become an "acquiring person" or to meet any other similar definition of a Person which would (whether upon notice or lapse of time or both) cause any such Rights to become void, recapitalizeseparable, reorganize distributable, unredeemable or completely or partially liquidate or adopt exercisable as a plan of complete or partial liquidation or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the operation of its assets or businesses or adopt resolutions providing for or authorizing any result of the foregoing;
(e) neither it nor any of its Subsidiaries shall acquire (i) transactions contemplated hereby, by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or any stock of, Stock Option Agreements or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or acquisition referred to in clause (iiA) any assets that are materialabove, individually or in the aggregate, to the Company ; (C) any such Rights Plan (and any of Rights issued thereunder) adopted by RSC shall, by its Subsidiaries, taken as a whole, except purchases of inventory own terms and raw materials in without any further action on the ordinary course of business (or as permitted by Section 7.1(g), whether or not material);
(f) neither it nor any of its Subsidiaries shall (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business), (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities part of the Company or any board of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any directors of the foregoingSurviving Corporation, terminate (iiiwithout payment) make any loans, advances (other than routine advances to employees 60 days after the earlier of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(g) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters);
(h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date termination of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of or the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measures;
(l) neither it nor any of its Subsidiaries shall make or rescind any material Tax election, amend any material Tax Return or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, in each case except in a manner consistent with past practice or as required by applicable Law;
(m) other than with respect to any actions permitted under Section 7.2, neither it nor any of its Subsidiaries shall take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VIII not being satisfied; and
(n) neither it nor any of its Subsidiaries will authorize any of, or commit, resolve or agree, in writing or otherwise, to take, any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operations.A-16
Appears in 1 contract
Interim Operations. The (a) Each of the Company and Technest covenants and agrees as to itself and its Subsidiaries that, after the date hereof Agreement Date and prior to the Effective Time First Closing Date (unless Parent shall otherwise consent in writing, which consent shall not unreasonably be withheld, and except as otherwise expressly contemplated by this Agreement or as set forth in this Agreementrequired by applicable Law):
(ai) the The business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable best efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, regulators, distributors, strategic partners, creditors, lessors, employees and business associates;
(bii) it It shall not not: (i) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (iiA) amend its certificate of incorporation or by-lawsbylaws; (iiiB) other than in the case of wholly-owned subsidiaries, split, combine combine, subdivide or reclassify its outstanding shares of capital stock; (ivC) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, other than dividends from its direct or indirect wholly-owned Subsidiaries; or (vD) purchaserepurchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, acquire or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(ciii) neither Neither it nor any of its Subsidiaries shall take any action that would prevent the Exchange from qualifying as a "reorganization" within the meaning of Section 368(a) of the Code or that would cause any of its representations and warranties in this Agreement to become untrue in any material respect;
(iiv) issue, sell, pledge, dispose Neither it nor any of or encumber its ERISA Affiliates shall: (A) accelerate, amend or change the period of exercisability of or terminate, establish, adopt, enter into, make any shares new grants or awards of stock-based compensation or other benefits under any Compensation and Benefit Plans; (B) amend or otherwise modify any Compensation and Benefit Plans; or (C) increase the salary, wage, bonus or other compensation of any directors, officers or key employees, in the case of (A), (B) and (C), except (x) for grants or awards to directors, officers and employees of it or its Subsidiaries under existing Compensation and Benefit Plans in such amounts and on such terms as are consistent with past practice, (y) in the normal and usual course of its capital stock business (which may include normal periodic performance reviews and related compensation and benefit increases and the provision of any classindividual Compensation and Benefit Plans consistent with past practice for promoted or newly hired officers and employees on terms consistent with past practice); provided, Rights or any Voting Debtthat it shall not take such action unless it shall have provided the other party with prior reasonable notice, or (Bz) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights for actions necessary to satisfy existing contractual obligations under Compensation and Benefit Plans existing as of any kind to acquire, any shares of its capital stock of any class, Rights, any Voting Debt or any other property or assets (other than shares of Company Common Stock and associated Rights issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans); or (ii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire or encumber any material property or material assets (including capital stock of any of its Subsidiaries) or businessAgreement Date;
(dv) neither Neither it nor any of its Subsidiaries shall restructureincur, recapitalize, reorganize repay or completely retire prior to maturity or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the operation of its assets or businesses or adopt resolutions providing for or authorizing any of the foregoing;
(e) neither it nor any of its Subsidiaries shall acquire (i) by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, except purchases of inventory and raw materials in the ordinary course of business (or as permitted by Section 7.1(g), whether or not material);
(f) neither it nor any of its Subsidiaries shall (i) incur refinance any indebtedness for borrowed money or guarantee any such 27 34 indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business), (ii) or issue, sell sell, repurchase or amend redeem prior to maturity any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange ratesothers;
(gvi) neither Neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters)expenditures;
(hvii) neither Neither it nor any of its Subsidiaries shall make issue, deliver, sell, pledge or encumber shares of any material changes in accounting methods, principles class of its capital stock or practices, except insofar as may have been required by a change in GAAP any securities convertible or applicable Law or, except as so required, change any assumption underlyingexchangeable into, or method of calculatingany rights, warrants or options to acquire, any bad debt, contingency or other reserve;
such shares except (i) neither it nor any of its Subsidiaries shall, except in Company Shares or Technest Shares issued pursuant to options and other awards outstanding on the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit Agreement Date under the Company Stock Plans or any the Technest Stock Plans, awards of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to options and other awards granted hereafter under the Company Stock Plans or any of its Subsidiaries any existing Contract of the type specified Technest Stock Plans in Section 5.5(a)(viii) accordance with this Agreement and Company Shares or Section 5.5(a)(ix)Technest Shares issuable pursuant to such awards, or and (ii) except bona fide sales by the Company of its common stock pursuant to existing commitments, in an amount, in the aggregate, not to exceed 10,000,000 shares (determined prior to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) reverse split of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of Shares contemplated by this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or aboveAgreement);
(kviii) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measures;
(l) neither Neither it nor any of its Subsidiaries shall make authorize, propose or rescind announce an intention to authorize or propose, or enter into an agreement with respect to, any Exchange, consolidation or business combination (other than the Exchange), or any purchase, sale, lease, license or other acquisition or disposition of any business or of a material Tax election, amend any material Tax Return amount of assets or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, securities except for transactions entered into in each case except in a manner consistent with past practice or as required by applicable Lawthe normal and usual course of its business;
(mix) Neither the Company nor Technest shall make any material change in its accounting policies or procedures, other than with respect to any actions permitted under Section 7.2such change that is required by GAAP;
(x) Neither the Company nor Technest shall release, neither assign, settle or compromise any material claims or litigation or make any material tax election or settle or compromise any material federal, state, local or foreign tax liability; and
(xi) Neither it nor any of its Subsidiaries shall take authorize or enter into any action or omit agreement to take any action that is reasonably likely to result in do any of the conditions to the Merger set forth in Article VIII not being satisfied; andforegoing.
(nb) neither it nor Company and Technest agree that any of its Subsidiaries will authorize any of, written approval obtained under this Section 6.1 must be signed by the Chief Executive Officer or commit, resolve or agree, in writing or otherwise, to take, any Chief Financial Officer of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operationsrespective party.
Appears in 1 contract
Samples: Agreement and Plan of Reorganization (Financial Intranet Inc/Ny)
Interim Operations. The Company covenants and agrees as to itself and ------------------ its Subsidiaries that, after the date hereof and prior to the Effective Time (unless Parent shall otherwise consent in writingTime, which consent shall not unreasonably be withheld, and except as otherwise expressly contemplated by this Agreement or as set forth in this Agreement):
(a) the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable best efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, strategic partners, creditors, lessors, employees and business associates;, and neither the Company nor any of its Subsidiaries shall take any action or omit to take any action that would cause any of its representations and warranties herein to become untrue in any material respect. By way of amplification of the foregoing and not limitation, neither the company nor any of its Subsidiaries shall, between the date of this Agreement and the Effective Time, directly or indirectly, take any action, including but not limited to the following, except with the prior consent of a Designated Officer (as defined below):
(ba) it shall not (i) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (ii) amend its certificate articles of incorporation or by-laws, except as may be required to increase the number of shares of Common Stock in connection with the conversion of the Convertible Loan, the Series A Preferred or the Series B Preferred, in each case outstanding as of the date hereof; (iiiii) other than in the case of wholly-owned subsidiaries, split, combine or reclassify its outstanding shares of capital stock; (iviii) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, other than dividends from its direct or indirect wholly-owned Subsidiaries; or (viv) purchaserepurchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(cb) neither it nor any of its Subsidiaries shall (i) issue, sell, pledge, dispose of or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debtof, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class, Rights, class or any Voting Debt or any other property or assets assets, except for (other than shares x) issuances of Company Common Stock and associated Rights issuable pursuant to options and other stock-based awards upon conversion of the Convertible Loan, the Series A Preferred or the Series B Preferred, in each case outstanding on the date hereof under hereof, and (y) issuances of Series B Preferred upon exercise of warrants outstanding on the Company Stock Plans)date hereof; or (ii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire of or encumber any material other property or material assets (including capital stock of any of its Subsidiaries); or (iii) make or businessauthorize or commit for any capital expenditures or, by any means, make any acquisition of, or investment in, assets or stock of or other interest in, any other Person or entity;
(c) neither it nor any of its Subsidiaries shall terminate, establish, adopt, enter into, make any new grants or awards under, amend or otherwise modify, any -23- Company Compensation and Benefit Plans (including, without limitation, any grant or issuance of new Options, any amendment or changes to the terms of any Options or any repricing of Options), or increase the salary, wage, bonus or other compensation of any employees;
(d) neither it nor any of its Subsidiaries shall restructuresettle or compromise any material claims or litigation or modify, recapitalize, reorganize amend or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into terminate any agreement or arrangement imposing material changes or restrictions on the operation of its assets material Contracts or businesses waive, release or adopt resolutions providing for assign any material rights or authorizing any of the foregoingclaims;
(e) neither it nor any of its Subsidiaries shall acquire (i) by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, except purchases of inventory and raw materials in the ordinary course of business (or as permitted by Section 7.1(g), whether or not material);
(f) neither it nor any of its Subsidiaries shall (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business), (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(g) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters);
(h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measures;
(l) neither it nor any of its Subsidiaries shall make or rescind any material Tax election, amend any material Tax Return election or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, in each case terminated except in a manner consistent with past practice or as required by applicable Lawthe ordinary and usual course of business;
(mf) make any change, other than with respect required by GAAP, to any actions permitted under Section 7.2, neither it nor any of its Subsidiaries shall take any action accounting principles or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VIII not being satisfiedprocedures; and
(ng) neither it nor any of its Subsidiaries will authorize any of, or commit, resolve or agree, in writing or otherwise, enter into an agreement to take, do any of the foregoing actions; providedforegoing. For the purposes of this Section 6.1, however"Designated Officer" shall mean ------------------ any of Xxxxxx Xxxxxx, that nothing contained in this Agreement shall give to ParentXxxx Xx, directly Xxxxxx Xxx or indirectlyXxxxx Xxxxxxxxx, rights to control or direct the operations each of whom is an officer of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operationsParent.
Appears in 1 contract
Samples: Merger Agreement
Interim Operations. The Company Seller covenants and agrees as to itself and its Subsidiaries that, after that from the date hereof and prior to the Effective Time (unless Parent shall otherwise consent in writing, which consent shall not unreasonably be withheld, and except as otherwise expressly contemplated by this Agreement or as set forth in this Agreement):
(a) the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, strategic partners, creditors, lessors, employees and business associates;
(b) it shall not (i) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (ii) amend its certificate of incorporation or by-laws; (iii) other than in the case of wholly-owned subsidiaries, split, combine or reclassify its outstanding shares of capital stock; (iv) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, other than dividends from its direct or indirect wholly-owned Subsidiaries; or (v) purchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(c) neither it nor any of its Subsidiaries shall (i) issue, sell, pledge, dispose of or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debt, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class, Rights, any Voting Debt or any other property or assets (other than shares of Company Common Stock and associated Rights issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans); or (ii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire or encumber any material property or material assets (including capital stock of any of its Subsidiaries) or business;
(d) neither it nor any of its Subsidiaries shall restructure, recapitalize, reorganize or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the operation of its assets or businesses or adopt resolutions providing for or authorizing any of the foregoing;
(e) neither it nor any of its Subsidiaries shall acquire (i) by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, except purchases of inventory and raw materials in the ordinary course of business (or as permitted by Section 7.1(g), whether or not material);
(f) neither it nor any of its Subsidiaries shall (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business), (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(g) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters);
(h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under except (A) as provided herein, (B) as required by any existing Contract or (C) otherwise consented to in writing by Buyer, Seller will:
4.02.01 Not (A) operate or in any manner deal with, incur obligations with respect to, or undertake any transactions relating to, the 2006 Executive Incentive Plan Subject Properties other than transactions (i) in the normal usual and commissions to employees at the level customary manner, (ii) of Vice President a nature and above in an amount consistent with prior practice, (iii) in the ordinary and regular course of business of owning and consistent with past practices as to operating the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfiedSubject Properties, and (yiv) prior subject to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measures;
(l) neither it nor any of its Subsidiaries shall make or rescind any material Tax election, amend any material Tax Return or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, in each case except in a manner consistent with past practice or as required by applicable Law;
(m) other than with respect to any actions permitted under Section 7.2, neither it nor any of its Subsidiaries shall take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VIII not being satisfied; and
(n) neither it nor any of its Subsidiaries will authorize any of, or commit, resolve or agree, in writing or otherwise, to take, any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement; (B) dispose of, complete control encumber or relinquish any of the Subject Properties (other than relinquishments resulting from the expiration of leases that Seller has no right or option to renew); (C) waive, compromise or settle any right or claim that would have a material PURCHASE AND SALE AGREEMENT, PAGE 9 10 adverse effect on the ownership, operation or value of any of the Subject Properties alter the Effective Date; or (D) commit to any expenditure in excess of $10,000.00 net to the interest of Seller for capital expenditures on any property.
4.02.02 Promptly notify Buyer of any suit, lessor demand action, or other proceeding before any court, arbitrator, or governmental agency and supervision any cause of action which relates to the Subject Properties or which might result in impairment or loss of any portion of the Subject Properties or which might hinder or impede the operation of the Subject Properties.
4.02.03 Make or give all notifications, filings, consents or approvals from, to or with all governmental authorities, and will cooperate with Buyer in obtaining the issuance, assignment or transfer, as the case may be, by each such authority of such Permits as may be necessary for Buyer to own and operate the Subject Properties following the consummation of the transactions contemplated in this Agreement; provided that Seller shall not be required to incur any expense in connection therewith.
4.02.04 Maintain in effect insurance providing the same type coverage, in the same amounts with the same deductibles as the insurance maintained in effect by Seller or its and its Subsidiaries’ operationsaffiliates on the Effective Date.
Appears in 1 contract
Samples: Purchase and Sale Agreement (Cotton Valley Resources Corp)
Interim Operations. The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless Parent shall otherwise consent approve in writing, which consent decision whether to approve shall not be unreasonably be withhelddelayed, and except as otherwise expressly contemplated by this Agreement hereby or as set forth in this Agreementthe Company Disclosure Letter):
(a) (i) the business of it and its Subsidiaries shall be conducted in the ordinary and usual course of business consistent with past practice and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially all reasonable best efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributorsdistributors and employees; and (ii) it shall, strategic partnersand shall cause its Subsidiaries to, creditorspay Taxes of the Company and its Subsidiaries when due and payable, lessorsexcept to the extent that both (A) any such Tax is contested in good faith by the Company or any of its Subsidiaries, employees and business associates(B) adequate reserves shall have been provided for with respect to such Tax;
(b) it shall not (i) issue, sell, pledge, dispose amend or restate the organizational documents of the Company or encumber any capital stock owned by it in any of its Subsidiaries; (ii) amend its certificate of incorporation or by-laws; (iii) other than in the case of wholly-owned subsidiaries, split, combine or reclassify its outstanding shares of capital stock; (iviii) declare, set aside or pay any dividend or other distribution payable in cash, stock or property in respect of any shares of its capital stock, other than dividends from any of its direct Subsidiaries to it and other than its regular quarterly cash dividend of $0.05 per Share payable on July 31, 2006 and October 31, 2006, provided, that (A) if the Effective Time shall occur on or indirect wholly-owned Subsidiariesprior to October 31, 2006, the Company shall not pay (or declare to be paid) a dividend on October 31, 2006, and (B) at any time on or prior to October 10, 2006, the Company may not declare any dividend to be paid on October 31, 2006; or (viv) purchaserepurchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock Shares or any securities convertible into or exchangeable or exercisable for any shares of its capital stockstock other than repurchases of securities from employees upon termination of employment;
(c) neither it nor any of its Subsidiaries shall (i) issue, sell, pledge, dispose of, transfer or encumber, or authorize the issuance, sale, pledge, disposition, transfer or encumbrance of or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debtof, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class, Rights, any Voting Debt class or any other property or assets equity interests (other than shares (A) grants of Company Common Stock Options or restricted Shares in connection with regular quarterly grants to directors of the Company, in each case not to exceed, in any calendar quarter, 600 Shares for each outside director and associated Rights the chairman of the board of directors of the Company, and (B) Shares issuable pursuant to options and other stock-based awards Company Options outstanding on the date hereof under the Company Stock Planshereof); or (ii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire of or encumber or authorize the transfer, lease, licensing, sale, disposition or encumbrance of any business unit or any material property assets of the Company or material assets (including capital stock of any of its Subsidiaries, other than sales of inventory in the ordinary course of business; or (iii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee, endorse or otherwise become liable for the obligations of any Person in a principal amount not to exceed $250,000 in the aggregate for the Company and its Subsidiaries, taken as a whole (other than indebtedness between or among the Company and/or its Subsidiaries or letters of credit issued to support purchase obligations of the Company or any of its Subsidiaries in the ordinary course of business);
(d) neither it nor any of its Subsidiaries shall restructureincrease the compensation payable or to become payable to its officers or to employees who are not officers or directors (other than, recapitalizein each case, reorganize planned merit or completely promotional increases or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the operation of its assets or businesses or adopt resolutions providing for or authorizing any of the foregoing;
(e) neither it nor any of its Subsidiaries shall acquire (i) by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, except purchases of inventory and raw materials increases in the ordinary course of business consistent with past practice, in each case which are described in Section 6.1(d) of the Company Disclosure Letter), or grant any rights to severance or termination pay to, or enter into any employment or severance agreement with, any director, officer or other employee of the Company or any of its Subsidiaries (except, in the case of employees who are not officers or directors, in accordance with the terms of the Benefit Plans), or establish, adopt, enter into or amend, any collective bargaining agreement or Benefit Plan, except for amendments of an administrative nature that would have a de minimis effect on the cost of maintaining the Benefit Plan or as permitted required by Section 7.1(g), whether or not material)Law;
(fe) except in the ordinary course of business consistent with past practice, neither it nor any of its Subsidiaries shall (i) incur enter into, amend, terminate, renew or extend, or waive, release or assign any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business), (ii) issue, sell or amend any debt securities or warrants or other material rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee material claims under any debt securities of another Person, enter into any “keep well” or other agreement Contract that would be material to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of businesstaken as a whole or (ii) license, lease, sell or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiariesotherwise dispose of, or (iv) other than with respect to the natural expiration of copyrights and patents in accordance with their scheduled expiration dates) cause the ordinary course lapsing or abandonment of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange ratesmaterial Owned Intellectual Property;
(gf) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment equipment, in excess of each case that would exceed $10 million per quarter 2,500,000 in the aggregate for the Company and its Subsidiaries, taken as a whole whole;
(g) neither it being understood that if nor any of its Subsidiaries shall acquire by merger, consolidation, acquisition of assets or capital expenditures in stock or any quarter are less than $10 millionsimilar transaction any corporation, partnership, limited liability company or other business organization or all or substantially all of the shortfall shall be available to the Company to spend in future quarters)assets of any such entity;
(h) neither it nor any of its Subsidiaries shall make settle or compromise any material changes claims or litigation in accounting methodswhich (i) the amount settled or compromised exceeds $250,000 (other than in the ordinary course of business consistent with past practice as a result of sales or warranty programs) or (ii) such settlement or compromise provides for the grant, principles transfer or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change relinquishment of any assumption underlying, or method of calculating, any bad debt, contingency rights or other reservenon-monetary consideration and does not contain a full and unconditional release of the Company and its Subsidiaries;
(i) neither it nor any of its Subsidiaries shallshall make any change, except in other than as required by GAAP or by the ordinary course of business consistent with past practiceSEC, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release to its accounting principles or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subjectprocedures;
(j) neither it nor any of its Subsidiaries shallshall make or change any material Tax election, except as required settle or compromise any claim, notice, audit report or assessment in respect of Taxes, change any annual Tax accounting period, adopt or change any method of Tax accounting, file any material Tax Return, enter into any Tax allocation agreement, Tax sharing agreement, Tax indemnity agreement or closing agreement relating to comply with any material Tax, surrender any right to claim a material Tax refund or consent to any extension or waiver of the statute of limitations period applicable Law to any material Tax claim or agreements, plans or arrangements existing on the date hereof, assessment;
(k) neither it nor any of its Subsidiaries shall (i) except as otherwise requested by Parent pursuant to Section 7.11(c)make any loans, take any action with respect advances or capital contributions to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus toinvestments in, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, other Person (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (xSubsidiaries) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level in excess of Vice President and above $500,000 in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such paymentsaggregate, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than investments in connection with the enforcement of the Company’s rights under this Agreement and other than cash or cash equivalents in the ordinary course of business consistent with past practice); providedexisting investment policies, howeveror (ii) conduct any write-down of assets, that notwithstanding any including inventory or accounts receivable, other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measuresthan as required by GAAP;
(l) neither it nor any of its Subsidiaries shall make authorize or rescind 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 otherwise alter in any material Tax electionfashion its corporate, amend any material Tax Return capital or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, in each case except in a manner consistent with past practice or as required by applicable Lawownership structure;
(m) other than with respect to any actions permitted under Section 7.2, neither it nor any of its Subsidiaries shall take any action or omit fail to take any action that is reasonably likely use reasonable best efforts to result maintain their existing insurance policies in any all material respects in effect as of the conditions to the Merger set forth in Article VIII not being satisfieddate hereof; and
(n) neither it nor any of its Subsidiaries will authorize any of, or commit, resolve or agree, in writing or otherwise, enter into an agreement to take, do any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operationsforegoing.
Appears in 1 contract
Interim Operations. The Company Except as set forth in Section 3.1 of the Western Disclosure Letter, Western covenants and agrees as to itself and its the Transferred Subsidiaries that, after the date hereof and prior to the Effective Time Closing (unless Parent Protection One shall otherwise consent approve in writing, which consent shall not unreasonably be withheld, and except as otherwise expressly contemplated by this Agreement, the Stock Option Agreement or as set forth in this and the Option and Voting Agreement):
(a) the business businesses of it and its the Transferred Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Western shall cause the Transferred Subsidiaries shall to use their respective commercially all reasonable efforts to preserve its their respective business organization organizations intact and maintain its their respective existing relations and goodwill with customers, suppliers, distributors, strategic partners, creditors, lessors, employees and business associates;
(b) it shall not (i) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (ii) amend its certificate of incorporation or by-laws; (iii) other than in the case of wholly-owned subsidiaries, split, combine or reclassify its outstanding shares of capital stock; (iv) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, other than dividends from its direct or indirect wholly-owned Subsidiaries; or (v) purchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(c) neither it Western nor any of its Subsidiaries shall (i) issue, sell, pledge, dispose of, encumber or accelerate, modify, or amend the terms of or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debtof, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its any capital stock in any Transferred Subsidiary; (ii) amend the certificate of incorporation or by-laws of any Transferred Subsidiary; (iii) split, combine or reclassify the outstanding shares of capital stock of any classTransferred Subsidiary; (iv) declare, Rightsset aside or pay any dividend payable in cash, stock or property in respect of any capital stock of WestSec or Westar Security; (v) repurchase, redeem or otherwise acquire, or permit any of its Subsidiaries to purchase or otherwise acquire, any Voting Debt shares of capital stock of any Transferred Subsidiary or any other property securities convertible into or assets exchangeable or exercisable for any shares of capital stock of any Transferred Subsidiary; (vi) other than shares in the ordinary and usual course of Company Common Stock and associated Rights issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans); or (ii) business, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire of or encumber any material other property or material assets, real, personal or mixed (including, without limitation, leasehold interests and intangible assets (including and capital stock of any Transferred Subsidiary) of any Transferred Subsidiary or permit any 39 Transferred Subsidiary to incur or modify any material indebtedness or other liability; or (vii) permit any Transferred Subsidiary to make or authorize or commit for any capital expenditures or, by any means, permit any Transferred Subsidiary to make any acquisition of, or investment in, assets or stock of any other Person or entity, except for (A) acquisitions of security monitoring accounts in the ordinary course of business consistent with past practice, (B) other acquisitions of security monitoring accounts not to exceed $5,000,000 in the aggregate and (C) other capital expenditures not to exceed $500,000 in the aggregate;
(c) neither Western nor any of its Subsidiaries) Subsidiaries shall terminate, establish, adopt, enter into, make any new grants or businessawards under, amend or otherwise modify, any Compensation and Benefit Plans or increase the salary, wage, bonus or other compensation of any employees of any Transferred Subsidiary except grants, awards or increases occurring in the ordinary and usual course of business (which shall include normal periodic performance reviews and related compensation and benefit grants, awards or increases);
(d) neither it Western nor any of its Subsidiaries shall restructuresettle or compromise any material claims or litigation involving any Transferred Subsidiary or, recapitalizeexcept in the ordinary and usual course of business modify, reorganize amend or completely terminate any material Contracts to which a Transferred Subsidiary is party or partially liquidate waive, release or adopt a plan assign any material rights or claims of complete or partial liquidation or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the operation of its assets or businesses or adopt resolutions providing for or authorizing any of the foregoingTransferred Subsidiary;
(e) neither it Western nor any of its Subsidiaries shall acquire (i) by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or make any stock of, or Tax election with respect to Taxes payable by any other manner, Transferred Subsidiary or permit any business or insurance policy naming any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken Transferred Subsidiary as a whole, beneficiary or loss- payable payee to be cancelled or terminated except purchases of inventory and raw materials in the ordinary and usual course of business (or as permitted by Section 7.1(g), whether or not material)business;
(f) neither it Western nor any of its Subsidiaries shall (i) incur take any indebtedness for borrowed money action or guarantee omit to take any such indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business), (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or action that would cause any of its Subsidiaries, guarantee representations and warranties herein to become untrue in any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;material respect; and
(g) neither it nor any of its Subsidiaries shall make will authorize or enter into an agreement to do any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters);fore going.
(h) the business of Protection One and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, Protection One and its Subsidiaries shall use all reasonable efforts to preserve their respective business organizations intact and maintain their respective existing relations and goodwill with customers, suppliers, distributors, creditors, lessors, employees and business associates;
(i) neither it Protection One nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor issue, sell, pledge, dispose of, encumber or accelerate, modify, or amend the terms of any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of any capital stock of Protection One or any of its Subsidiaries; (ii) amend the certificate of incorporation or by-laws of Protection One or any of its Subsidiaries; (iii) split, combine or reclassify the outstanding shares of capital stock of Protection One or any of its Subsidiaries; (iv) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock other than dividends from Protection One's direct or indirect wholly-owned Subsidiaries shalland the dividend and other distributions referred to in the recitals to this Agreement; or (v) repurchase, redeem or otherwise acquire any shares of capital stock or any securities convertible into or exchangeable or exercisable for any shares of capital stock of Protection One or any of its Subsidiaries; (vi) other than in the ordinary and usual course of business, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber any other property or assets, real, personal or mixed (including, without limitation, leasehold interests and intangible assets and (including capital stock of any of Protection One's Subsidiaries) or incur or modify any material indebtedness or other liability; or (vii) make or authorize or commit for any capital expenditures or, by any means, make any acquisition of, or investment in, assets or stock of any other Person or entity, except for
(A) acquisitions of security monitoring accounts in the ordinary course of business consistent with past practice, (B) other acquisitions of security monitoring accounts not to exceed $5,000,000 in the aggregate and (C) other capital expenditures not to exceed $500,000 in the aggregate;
(j) neither Protection One nor any of its Subsidiaries shall terminate, establish, adopt, enter into, renewmake any new grants or awards under, amend or otherwise modify, amendany Protection One Compensation and Benefit Plans or increase the salary, terminatewage, bonus or other compensation of any employees except grants, awards or increases occurring in the ordinary and usual course of business (which shall include normal periodic performance reviews and related compensation and benefit grants, awards or increases) except for the bonuses referred to in the recitals to this Agreement;
(k) neither Protection One nor any of its Subsidiaries shall settle or compromise any material claims or litigation or, except in the ordinary and usual course of business modify, amend or terminate any of its material Contracts or waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measuresclaims;
(l) neither it Protection One nor any of its Subsidiaries shall make or rescind any material Tax election, amend any material Tax Return election or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, in each case terminated except in a manner consistent with past practice or as required by applicable Lawthe ordinary and usual course of business;
(m) other than with respect to any actions permitted under Section 7.2, neither it Protection One nor any of its Subsidiaries shall take any action or omit to take any action that is reasonably likely would cause any of its representations and warranties herein to result become untrue in any of the conditions to the Merger set forth in Article VIII not being satisfiedmaterial respect; and
(n) neither it Protection One nor any of its Subsidiaries will authorize any of, or commit, resolve or agree, in writing or otherwise, enter into an agreement to take, do any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operationsforegoing.
Appears in 1 contract
Samples: Contribution Agreement (Protection One Alarm Monitoring Inc)
Interim Operations. The Between signing of this Agreement and Closing, Seller shall cause each of the Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless Parent Purchaser shall otherwise consent approve in writing, which consent approval shall not be unreasonably be withheldwithheld or delayed, and except as otherwise expressly contemplated by this Agreement hereby or as set forth in this Agreement):the Seller Disclosure Schedule) to:
(a) other than consummation of the Scolari Acquisition, conduct its business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially all reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, strategic partners, creditors, lessors, employees suppliers and business associatesemployees;
(b) it shall not amend its Organizational Documents;
(c) not (i) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (ii) amend its certificate of incorporation or by-laws; (iii) other than in the case of wholly-owned subsidiaries, split, combine or reclassify its outstanding shares of capital stock; (iv) declare, set aside the Company or pay any dividend payable in cash, stock or property in respect of any its Subsidiaries capital stock, other than dividends from its direct or indirect wholly-owned Subsidiaries; or (v) purchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(c) neither it nor any of its Subsidiaries shall (i) issue, sell, pledge, dispose of or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debt, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of the Company or its Subsidiaries capital stock of any class, Rights, any Voting Debt or any other property or assets (other than shares of Company Common Stock and associated Rights issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans); or (ii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire of or encumber any material property or material assets (including capital stock of any portion of its Subsidiaries) or business;
(d) neither it nor any of its Subsidiaries shall restructureassets, recapitalize, reorganize or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the operation of its assets or businesses or adopt resolutions providing for or authorizing any of the foregoing;
(e) neither it nor any of its Subsidiaries shall acquire (i) by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, except purchases than sales of inventory and raw materials in the ordinary course of business (or as permitted by Section 7.1(g), whether or not material);
(f) neither it nor any of its Subsidiaries shall (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (and other than pursuant amounts in cash equal to the Credit Agreement in Pre-Closing Distributions, provided that, CHF 1’000’000 of the ordinary course of business), (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of Pre-Closing Distributions will not be distributed by the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any Subsidiaries until Closing and will be available for funding of the foregoing, Reserve Amount at Closing; or (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into incur any hedging agreement Indebtedness or other financial agreement issue any debt securities or arrangement designed to protect guarantee or endorse the Company or its Subsidiaries against fluctuations in commodities prices or exchange ratesobligations of any Person;
(gd) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters);
(h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been be required by a change in GAAP or applicable Law orLaw, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
not (i) neither it nor any of its Subsidiaries shall, except in increase the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release compensation payable or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parentbecome payable to Group Employees; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except grant any rights to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise ofseverance or termination pay to, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend into any employment or severance agreement or arrangement for the benefit or welfare of with any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding Group Employee (other than in connection with the enforcement of the Company’s rights under this Agreement and other than Scolari Acquisition); or (iii) establish, adopt, enter into or amend, any collective bargaining agreement or Benefit Plan;
(e) except in the ordinary course of business consistent business, not (i) enter into, amend or terminate any contract or agreement that would be material to the Company and its Subsidiaries taken as a whole (other than in connection with past practicethe Scolari Acquisition); providedor (ii) exclusively license to any third party any material Owned Intellectual Property;
(f) other than consummation of the Scolari Acquisition, howevernot acquire by merger, that notwithstanding consolidation, acquisition of assets or equity interests or any similar transaction any corporation, partnership, limited liability company or other provision business organization or all or substantially all of this Agreementthe assets of any such entity;
(g) except in the ordinary course of business, neither the Company nor any of its Subsidiaries shall enter into any settlement of not settle or compromise any material claims or litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measures;
(lh) neither it nor any of its Subsidiaries shall not make or rescind any material Tax electionchange, amend any material Tax Return or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, in each case except in a manner consistent with past practice or other than as required by applicable LawSwiss GAAP or U.S. GAAP, to its accounting principles or procedures;
(mi) other than with respect except as described in the funds flow chart attached as Annex C, not make any payment or distribution to any actions permitted under Section 7.2, neither it nor any of Seller or its Subsidiaries shall take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VIII not being satisfiedAffiliates; and
(nj) neither it nor any of its Subsidiaries will not authorize any of, or commit, resolve or agree, in writing or otherwise, enter into an agreement to take, do any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operationsforegoing.
Appears in 1 contract
Interim Operations. The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless Parent shall otherwise consent in writing, which consent shall not unreasonably be withheld, and except Except as otherwise expressly contemplated by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing by Parent, Company covenants and agrees that during the period from the date hereof to the Effective Time (or until termination of this AgreementAgreement in accordance with Article 7):
(a) the business and operations of it Company and its AVP Subsidiaries shall be conducted only in the ordinary course of business and usual course andCompany shall, to the extent consistent therewithand shall cause each AVP Subsidiary to, it and use its Subsidiaries shall use their respective commercially reasonable best efforts to preserve intact its current business organization intact organizations, keep available the services of its current officers and maintain employees and preserve its existing relations and goodwill relationships with its material customers, suppliers, distributorslicensors, strategic partnerslicensees, creditorsadvertisers, lessors, employees distributors and other material third parties having business associatesdealings with it and to preserve the goodwill of its respective businesses;
(b) it Company shall not (i) authorize for issuance, issue, selldeliver, pledgesell or agree or commit to issue, dispose sell or deliver (whether through the issuance or granting of options, commitments, warrants, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock owned by it in or the capital stock of any AVP Subsidiary, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including without limitation stock appreciation rights or phantom interests), except for issuances of its Subsidiaries; Company Shares upon the exercise of Options or Warrants outstanding as of the date hereof or (ii) amend its certificate of incorporation or by-laws; (iii) other than in the case of wholly-owned subsidiariespurchase, split, combine or reclassify its outstanding shares of capital stock; (iv) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, other than dividends from its direct or indirect wholly-owned Subsidiaries; or (v) purchaserepurchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Optionsand shall ensure that no AVP Subsidiary shall purchase, or permit any of its Subsidiaries to purchase repurchase, redeem or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares other equity interests of its capital stock;
(c) neither it nor any of its Subsidiaries shall (i) issue, sell, pledge, dispose of or encumber (A) any shares of its capital stock of any class, Rights Company or any Voting DebtAVP Subsidiary (including, or (B) without limitation, securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of Company or any AVP Subsidiary);
(c) Company (i) shall retain, and shall not sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it directly or indirectly in any AVP Subsidiary or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any AVP Subsidiary, (ii) shall not amend or otherwise change its Certificate of Incorporation or Bylaws, and shall ensure that no AVP Subsidiary shall amend its Certificate of Incorporation or Bylaws and (iii) shall not split, combine or reclassify any shares of its capital stock of stock, and shall ensure that no AVP Subsidiary shall split, combine or reclassify any class, Rights, any Voting Debt or any other property or assets (other than shares of Company Common Stock and associated Rights issuable pursuant to options and other its capital stock-based awards outstanding on the date hereof under the Company Stock Plans); or (ii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire or encumber any material property or material assets (including capital stock of any of its Subsidiaries) or business;
(d) neither it nor Company shall not, and shall ensure that no AVP Subsidiary shall, declare, set aside or pay any dividends on (whether in cash, stock or other property), or make any other distributions in respect of, any of its capital stock (except for dividends paid by AVP Subsidiaries shall restructure, recapitalize, reorganize to Company or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the operation of its assets or businesses or adopt resolutions providing for or authorizing any of the foregoingto other AVP Subsidiaries consistent with past practices);
(e) neither it Company nor any of its Subsidiaries AVP Subsidiary shall acquire (i) grant or agree to any increase in any manner the compensation or fringe benefits of, or pay any bonus to, any current or former director, officer or employee except increases in the ordinary course of business consistent with past practice of less than ten percent (10%) of each such individual’s salary for non-officer employees, increases and bonuses expressly contemplated by or required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and the Warrants and terminating the Options, Warrants and the Stock Plan, (ii) enter into any new or materially amend or terminate any existing employment, consulting, severance, termination, change-of-control or indemnification agreement with any current or former director, officer or employee of Company, (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02), become obligated under any Benefit Plan that was not in existence on the date hereof or amend, modify or terminate any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereof or (iv) except as may be required to comply with applicable Law and except as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02), pay any benefit not required by any plan or arrangement as in effect as of the date hereof (including, without limitation, the granting of, acceleration of, exercisability of or vesting of stock options, stock appreciation rights or restricted stock, except as otherwise contemplated by this Agreement), except in connection with accelerating the vesting schedules of the Options and the Warrants and terminating the Options, Warrants and the Stock Plan;
(f) Company shall not, and shall ensure that no AVP Subsidiary shall, acquire or agree to acquire, including, without limitation, by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or any capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereofthereof other than non-taxable transfers by or among AVP Subsidiaries;
(g) Company shall not, and shall ensure that no AVP Subsidiary shall, sell, lease, license, mortgage or otherwise encumber or subject to any Lien or otherwise dispose of, or agree to sell, lease, license, mortgage or otherwise encumber or subject to any Lien or otherwise dispose of, any of its properties or assets other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) any immaterial properties or assets that are material(or immaterial portions of properties or assets, individually or including those described in the aggregate, to Section 5.01(g) of the Company and any of its SubsidiariesDisclosure Schedule), taken as a whole, except purchases of (iii) inventory and raw materials in the ordinary course of business consistent with past practice, (iv) Permitted Liens and (v) non-taxable transfers by or as permitted by Section 7.1(g), whether or not material)among AVP Subsidiaries;
(fh) neither it nor Company shall not, and shall ensure that no AVP Subsidiary shall, issue any letter of its Subsidiaries shall (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (credit other than pursuant to the Credit Agreement issuance of letters of credit in the ordinary course of business)business consistent with past practices of Company and AVP Subsidiaries in an amount not to exceed $150,000 in the aggregate, (ii) issueincur, sell assume or amend pre-pay any Indebtedness, enter into any agreement to incur, assume or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or obligation of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or other calls or rights to acquire any debt securities of the Company or any of its SubsidiariesAVP Subsidiary, guarantee any debt securities of another Personothers, enter into any “keep wellkeep” well or other agreement to maintain any financial statement condition of another Person person or enter into any arrangement having the economic effect of any of the foregoing;
(i) Company shall not, (iii) and shall ensure that no AVP Subsidiary shall, make or forgive any loans, advances (or capital contributions to, guarantees for the benefit of, or investments in, any person or entity, other than routine (i) loans or advances to employees of the Company and its Subsidiaries in the ordinary course of businessbusiness pursuant to Material Contracts in an amount not to exceed $50,000 in the aggregate, (ii) such loans between or capital contributions to, or investment in, among Company and any other Person, other than the Company AVP Subsidiary and (iii) cash advances to Company’s or any of its direct or indirect wholly owned Subsidiaries, or (iv) such AVP Subsidiary’s employees for reimbursable travel and other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(g) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters);
(h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except business expenses incurred in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries Company shall not, and shall ensure that no AVP Subsidiary shall, except as required to comply with applicable Law assume, guarantee or agreementsotherwise become liable or responsible (whether directly, plans contingently or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangementsotherwise) for the benefit or welfare obligations of any current or former directorother Person, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement except for the benefit or welfare obligations of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its AVP Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and Agreement, other than in the ordinary course of business consistent with past practice); provided, however, that notwithstanding any other provision of this Agreement, ;
(k) neither the Company nor any AVP Subsidiary shall adopt or put into effect a plan of its Subsidiaries shall enter into any settlement complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places AVP Subsidiary (other than any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measurestransaction specifically contemplated by this Agreement);
(l) neither it nor Company shall not, and shall ensure that no AVP Subsidiary shall, (i) enter into, terminate or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice (except as may be necessary for Company to comply with its obligations hereunder), (ii) enter into, terminate or materially amend, modify or supplement, any Lease or Material Contract, other than in the ordinary course of business consistent with past practice, or (iii) waive, release, grant, assign or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(m) Company shall not, and shall ensure that no AVP Subsidiary shall, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(m) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures in the ordinary course of business consistent with past practices in excess of $50,000 in the aggregate;
(n) Company and AVP Subsidiaries (i) shall make or rescind any material Tax election, amend any material Tax Return or continue in force insurance with insurance companies who are experienced in underwriting insurance for businesses similar to Company’s business and adequately covering risks of such types and in such amounts as are consistent with Company’s past practices and (ii) shall use reasonable best efforts not permit any insurance policy naming it as a beneficiary or loss-loss payable payee to be cancelled canceled or terminated;
(o) Company shall not, and shall ensure that no AVP Subsidiary shall, establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(p) Company shall not, and shall ensure that no AVP Subsidiary shall, amend, modify or waive any term of any outstanding Options, Warrants or other securities of Company or any AVP Subsidiary, except (i) as required by this Agreement, or (ii) in connection with terminating the Options and the Stock Plan;
(q) Company shall, and shall cause each case AVP Subsidiary to, (i) maintain any real property in which any of Company and AVP Subsidiaries have any ownership or leasehold interest (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property in accordance with their terms or (ii) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(r) Company shall not, and shall ensure that no AVP Subsidiary shall, enter into, terminate or materially amend any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, except as required by Law;
(s) Company shall not, and shall ensure that no AVP Subsidiary shall, conduct any plant closing or layoff that could implicate the WARN Act;
(t) Company shall not, and shall ensure that no AVP Subsidiary shall, enter into any material settlement, conciliation or similar agreement;
(u) Company shall not, and shall ensure that no AVP Subsidiary shall, settle or compromise any pending or threatened suit, action, claim or litigation, except with respect to the settlement or compromise of any such matter which does not involve equitable or injunctive relief and does not obligate Company and AVP Subsidiaries to make aggregate cash payments exceeding $50,000 individually or $100,000 in the aggregate;
(v) except as set forth in Section 5.01(v) of the Company Disclosure Schedule, Company shall not, and shall ensure that no AVP Subsidiary shall, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by Company and AVP Subsidiaries as of the date hereof, except as may be required as a manner result of a change in applicable Law or in U.S. generally accepted accounting principles;
(w) Company shall not, and shall ensure that no AVP Subsidiary shall, revalue in any material respect any of its assets (including, without limitation, writing down or writing off any notes or accounts receivable in any material manner), except as required by U.S. generally accepted accounting principles;
(x) Company shall not, and shall ensure that no AVP Subsidiary shall, pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than (i) the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice of Liabilities reflected on or as required reserved in the financial statements of Company or incurred in the ordinary course of business and consistent with past practice, (ii) the payment of Company’s Expenses, including the payment of the fees and Expenses of Special Committee and the costs, fees and Expenses incurred by applicable LawSpecial Committee or (iii) the payment of claims under any of the Benefit Plans;
(my) other than Company shall not, and shall ensure that no AVP Subsidiary shall, make or change any material tax election or change an annual accounting period with respect to Taxes, adopt or change any actions permitted under Section 7.2accounting method, neither it nor file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to Company or any AVP Subsidiary, or surrender any right to claim a refund of its Subsidiaries shall Taxes, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to Company or any AVP Subsidiary, or take any action other similar action, or omit to take any action that is reasonably likely to result in any of the conditions relating to the Merger set forth in Article VIII not being satisfiedfiling of any Tax Return or the payment of any Tax; and
(nz) neither it nor Company shall not, and shall not permit any of its Subsidiaries will authorize any ofAVP Subsidiary to, agree or commit, resolve or agree, in writing or otherwise, commit to take, do any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operationsforegoing.
Appears in 1 contract
Samples: Merger Agreement (Avp Inc)
Interim Operations. The (a) Except (i) as set forth in Section 7.1(a) of the Company covenants and agrees Disclosure Letter, (ii) as expressly contemplated or permitted by this Agreement, (iii) as may be required to itself and its Subsidiaries thatcomply with applicable Law, after any Order or any written notice from a Governmental Entity or (iv) with the date hereof and prior to the Effective Time written consent of Parent (unless Parent shall otherwise consent in writing, which consent shall not be unreasonably be withheldwithheld delayed or conditioned), during the period from the date of this Agreement until the earlier of the Effective Time and the date of termination of this Agreement in accordance with Section 10.1, the Company shall, and except as otherwise expressly contemplated by this Agreement or shall cause each of its Subsidiaries to, conduct its respective business in all material respects, in the ordinary course.
(b) Except (i) as set forth in Section 7.1(b) of the Company Disclosure Letter, (ii) as expressly contemplated or permitted by this Agreement):
, (aiii) as may be required to comply with applicable Law, any Order or any written notice from a Governmental Entity, or (iv) with the business prior written consent of it Parent (which consent shall not be unreasonably withheld delayed or conditioned), during the period from the date of this Agreement until the earlier of the Effective Time and the date of termination of this Agreement in accordance with Section 10.1, the Company shall not, and shall not permit any of its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, strategic partners, creditors, lessors, employees and business associates;to:
(b) it shall not (i) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (iiA) amend its certificate of incorporation or by-laws; (iii) other than in the case of wholly-owned subsidiariesadjust, split, combine or reclassify its outstanding shares capital stock or the capital stock of capital stockany of its Subsidiaries; (ivB) declare, set aside declare or pay any dividend payable in cash, stock or property make any other distribution in respect of the shares of its capital stock or any securities or obligations convertible into or exchangeable for any shares of its capital stock, other than dividends from its direct or indirect wholly-owned Subsidiaries; or stock (v) purchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full any dividend or partial payment other distribution by a wholly owned Subsidiary of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required Company or permitted under another wholly owned Subsidiary of the terms of such Company Stock OptionsCompany); (C) directly or indirectly redeem, or permit any of its Subsidiaries to purchase or otherwise acquire, acquire any shares of its capital stock or any securities or obligations convertible into or exchangeable or exercisable for any shares of its capital stock;
stock (cexcept for the acquisition of Company Common Stock (1) neither it nor any tendered in connection with a cashless exercise of Company Options or in order to pay Taxes with respect to equity-based awards, or for the Company to satisfy withholding obligations in respect of such Taxes, in connection with Company Options or other equity-based awards or (2) in connection with the forfeiture of equity-based awards granted pursuant to the Company Equity Plans); or (D) except for transactions solely between the Company and its Subsidiaries, or between Subsidiaries shall (i) of the Company, issue, deliver, sell, pledge, dispose of of, grant, award or encumber (A) any shares of its capital stock of any classstock, Rights ownership interests or voting securities, or any Voting Debt, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments convertible securities or other rights of any kind to acquire, acquire or receive any shares of its capital stock of any class, Rightsstock, any Voting Debt other ownership interests or any other property or assets (other than shares of Company Common Stock and associated Rights issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans); or (ii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire or encumber any material property or material assets voting securities (including capital restricted stock of any of its Subsidiaries) units, stock appreciation rights, phantom stock or business;
(d) neither it nor any of its Subsidiaries shall restructure, recapitalize, reorganize or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the operation of its assets or businesses or adopt resolutions providing for or authorizing any of the foregoing;
(e) neither it nor any of its Subsidiaries shall acquire (i) by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, except purchases of inventory and raw materials in the ordinary course of business (or as permitted by Section 7.1(gsimilar instruments), whether or not material);
(f) neither it nor any of its Subsidiaries shall (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business), (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its SubsidiariesSubsidiaries (except for issuances (1) of shares of Company Common Stock upon the exercise or settlement of Company Options, guarantee any debt securities of another Personrights under the Company ESPP or pursuant to other equity-based awards in effect on the date hereof, enter into any “keep well” or other agreement (2) required to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any be made by virtue of the foregoing, (iii) make any loans, advances (other than routine advances to employees consummation of the Company and its Subsidiaries in Merger or the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned SubsidiariesOffer, or (iv3) required to be made pursuant to this Agreement or any other than agreement in effect on the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed date hereof to protect which the Company is a party, or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(g) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quartersotherwise permitted by this Section 7.1(b));
(hii) neither it nor sell, transfer, mortgage, encumber, dispose of or otherwise subject to any Lien (other than a Permitted Lien) any of its Subsidiaries shall make material assets or material properties (other than to a wholly owned Subsidiary), by merger, consolidation, asset sale or other business combination (including formation of a joint venture) or cancel, release or assign any material changes Indebtedness or claim, in accounting methods, principles or practiceseach case, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(iA) neither it nor any of its Subsidiaries shall, except such actions in the ordinary course of business consistent with past practice, including dispositions of obsolete or worthless assets, sales of receivables and other assets in the ordinary course of business and the licensing of Company Intellectual Property to customers in the ordinary course of business, (B) sales of immaterial assets for a purchase price of $2,000,000 or less in any single case or $8,000,000 in the aggregate and (C) leases and subleases of real property owned by the Company or any Company Subsidiary and leases of real property under which the Company or any Company Subsidiary is a tenant or a subtenant and voluntary terminations or surrenders of such leases;
(iii) make any acquisition, by purchase or other acquisition of stock or other equity interests, by merger, joint venture, consolidation, asset purchase or other business combination, or by contributions to capital, or make any material purchases of any property or assets, in or from any other Person other than a wholly owned Subsidiary of the Company, except (A) in all cases as expressly required by the terms of any Contract in force on the date of this Agreement; and (B) as otherwise permitted by this Section 7.1(b);
(iv) enter into, renew, modifyextend, amendamend or terminate any Contract that is or would constitute a Material Contract, terminatein each case other than in the ordinary course of business;
(v) except as required by Law or any Contract in effect on the date hereof (including, waivewithout limitation, delay this Agreement and the exercise of, release Company Benefit Plans and Employment Agreements) or assign any material rights as set forth on Section 7.1(b)(v) of the Company Disclosure Letter: (A) amend materially or claims under, terminate any Company Material Contract Benefit Plan or Company Lease in a manner materially adverse to Parent; providedmaterial Employment Agreement, or establish, adopt or enter into any employment agreement or any plan, program, policy or arrangement that, nothing herein shall permit if in effect on the date of this agreement, would be a material Company Benefit Plan or material Employment Agreement, (B) enter into any collective bargaining agreement or similar material labor agreement with a labor union, works council or other employee representative, or (C) increase the salary or wages, as applicable, bonus or other incentive compensation, or other benefits or compensation of any director, officer or employee of the Company or any of its Subsidiaries to Subsidiaries, except for (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given consistent with past practice in connection with annual performance and salary reviews, not to employees below exceed, in the level of Vice President on an individual basisaggregate, four percent (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j4%) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any such person’s compensation or benefits, including any outstanding options (ii) non material increases in benefits or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above)business;
(kvi) except for matters identified amend the Company Charter or Company By-Laws;
(vii) incur any Indebtedness, except, in Section 7.1(keach case, (A) intercompany guarantees or intercompany “keep well” or other agreements to maintain any financial statement condition of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigationCompany Subsidiary, claim(B) letters of credit or guarantees issued in the ordinary course of business, grievance(C) Indebtedness incurred through the revolving credit facility under the Credit Agreement (including in respect of letters of credit), charge (D) Indebtedness having an aggregate principal amount outstanding that is not in excess of $2,500,000 (provided that any such Indebtedness is prepayable without premium or proceeding (penalty, other than customary breakage costs), (E) Indebtedness incurred in connection with the enforcement refinancing of any Indebtedness existing on the Company’s rights under this Agreement and date hereof (other than the Notes under the Notes Indenture or the Credit Agreement) or permitted to be incurred, assumed or otherwise entered into hereunder (provided that any such Indebtedness is prepayable without premium or penalty, other than customary breakage costs) and (F) capital leases entered into in the ordinary course of business consistent with past practice;
(viii) change any material method of Tax accounting, or take any material position on any material Tax Return, in each case that is inconsistent with elections made or positions taken in preparing or filing similar Tax Returns in prior periods; enter into any closing agreement or settle or compromise any material Tax liability of the Company or any of its Subsidiaries, or agree to any extension or waiver of the statute of limitations with respect to the assessment or determination of any material amount of Taxes, in each case except in the ordinary course of business;
(ix) make any material changes in its accounting methods, practices or policies, except as may be required under GAAP (or any interpretation thereof); provided, howeverincluding pursuant to standards, guidelines and interpretations of the Financial Accounting Standards Board or any similar organization;
(x) waive, settle or compromise any material pending or threatened suit, audit, action or claim, other than waivers, settlements or compromises that notwithstanding involve only the payment of monetary damages by the Company or any other provision of its Subsidiaries;
(xi) fail to maintain and protect, or abandon, allow to lapse, expire or be cancelled any registration or application for registration for, material Company Intellectual Property, or knowingly disclose to any Person not an employee of, or consultant or advisor to, the Company or any of its Subsidiaries bound by confidentiality obligations to the Company or such Subsidiary, or otherwise knowingly disclose any trade secret, process or know-how not a matter of public knowledge prior to the date of this Agreement, neither except pursuant to judicial order or process or commercially reasonable disclosures in the ordinary course of business made under an existing Contract or agreement containing confidentiality obligations for the benefit of the Company nor any of or its Subsidiaries shall enter into any settlement of or compromise any litigationSubsidiary, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs as applicable;
(xii) communicate with employees of the Company or any of its Subsidiaries regarding the future compensation, benefits or places other treatment that they will receive following the Merger Closing, other than (i) any material restrictions on such communication which is consistent with prior directives or documentation provided to the ability Company by Parent (in which case, Parent shall provide the Company with reasonable prior notice of, and the reasonable opportunity to review and comment upon, any such communication), (ii) any such communication which addresses any employee’s right to receive the Offer Price or the Merger Consideration or any employee’s treatment of his or her equity awards, (iii) any such communication which addresses any employee in their capacity as a Stockholder of the Company or (iv) any communication regarding matters addressed in Section 8.4 of its Subsidiaries to impose any labor saving or other cost reduction measures;this Agreement; or
(lxiii) neither it nor agree to, or make any of its Subsidiaries shall make or rescind any material Tax electioncommitment to, amend any material Tax Return or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, in each case except in a manner consistent with past practice or as required by applicable Law;
(m) other than with respect to any actions permitted under Section 7.2, neither it nor any of its Subsidiaries shall take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VIII not being satisfied; and
(n) neither it nor any of its Subsidiaries will authorize any of, or commit, resolve or agree, in writing or otherwise, to take, any of the foregoing actions; provided, however, that nothing contained in actions prohibited by this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operationsSection 7.1(b).
Appears in 1 contract
Interim Operations. The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior Prior to the Effective Time (unless Parent shall otherwise consent in writingTime, which consent shall not unreasonably be withheld, and except as otherwise expressly contemplated by this Agreement or as ------------------ set forth in the Company Disclosure Letter or as contemplated by any other provision of this Agreement):, unless Sub has consented in writing thereto, the Company:
(ai) the business shall, and shall cause each of it and its Subsidiaries shall be conducted in the ordinary and usual course andto, to the extent consistent therewith, it and conduct its Subsidiaries shall use their respective commercially reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, strategic partners, creditors, lessors, employees operations and business associatesaccording to their usual, regular and ordinary course consistent with past practice;
(bii) it shall not (i) issueuse its best efforts, sell, pledge, dispose of or encumber any capital stock owned by it in any and shall cause each of its Subsidiaries; (ii) amend Subsidiaries to use its certificate best efforts, to preserve intact their business organizations and goodwill, keep available the services of incorporation or by-laws; their respective officers and employees and maintain satisfactory relationships with those persons having business relationships with them;
(iii) other than in the case shall not, and shall cause its Subsidiaries not to, amend their respective Articles of wholly-owned subsidiaries, split, combine Incorporation or reclassify its outstanding shares of capital stock; bylaws or comparable governing instruments;
(iv) declareshall promptly notify Sub of (x) any material change in its condition (financial or otherwise), set aside business, prospects, properties, assets, liabilities or pay the normal course of its business or of its properties, (y) any dividend payable in cashmaterial litigation or material governmental complaints, stock investigations or property in respect hearings (or communications indicating that the same may be contemplated), or (z) the breach of any capital stock, other than dividends from its direct representation or indirect wholly-owned Subsidiaries; or warranty contained herein;
(v) purchaseshall promptly deliver to Sub correct and complete copies of any report, redeem statement or otherwise acquire, except for schedule filed with the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options SEC subsequent to the extent required or permitted under the terms date of such Company Stock Optionsthis Agreement;
(vi) shall not, or and shall not permit any of its Subsidiaries to, authorize, propose or announce an intention to purchase authorize or otherwise acquirepropose, or enter into an agreement with respect to, any shares of its capital stock merger, consolidation or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(c) neither it nor any of its Subsidiaries shall (i) issue, sell, pledge, dispose of or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debt, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class, Rights, any Voting Debt or any other property or assets business combination (other than shares the Merger), release or relinquishment of Company Common Stock and associated Rights issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans); or (ii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire or encumber any material property contract rights, or material assets (including capital stock any acquisition or disposition of any of its Subsidiaries) or business;
(d) neither it nor any of its Subsidiaries shall restructure, recapitalize, reorganize or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the operation of its assets or businesses or adopt resolutions providing for or authorizing any of the foregoing;
(e) neither it nor any of its Subsidiaries shall acquire (i) by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, except purchases of inventory and raw materials in the ordinary course of business (or as permitted by Section 7.1(g), whether or not material);
(f) neither it nor any of its Subsidiaries shall (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business), (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(g) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter 100,000 in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters);
(h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); provided;
(vii) shall not, however, that notwithstanding any other provision of this Agreement, neither the Company nor and shall not permit any of its Subsidiaries shall enter into to, (x) grant, confer or award any settlement options, warrants, conversion rights or other rights, not existing on the date hereof, to acquire any shares of its capital stock or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs other securities of the Company or its Subsidiaries or (y) accelerate, amend or change the period of exercisability of options or restricted stock granted under any employee stock plan or, except as contemplated by Section 4.3(a)(i), authorize cash payments in exchange for any options granted under any of such plans;
(viii) shall not, and shall not permit any of its Subsidiaries or places to, amend in any material restrictions respect the terms of the Benefit Plans, including, without limitation, any employment, severance or similar agreements or arrangements in existence on the ability of the Company date hereof, or adopt any new employee benefit plans, programs or arrangements or any employment, severance or similar agreements or arrangements;
(ix) shall not, and shall not permit any of its Subsidiaries to impose (x) increase or agree to increase the compensation payable or to become payable to its officers or, other than increases in accordance with past practice which are not material, to its employees or (y) enter into any labor saving or other cost reduction measurescollective bargaining agreement;
(lx) neither it nor shall not, and shall not permit any of its Subsidiaries to, (x) incur, create, assume or otherwise become liable for borrowed money or assume, guarantee, endorse or otherwise become responsible or liable for the obligations of any other individual, corporation or other entity or (y) make any loans or advances to any other person, except in the case of clause (x) for borrowings under existing credit facilities in the ordinary course of business and, except in the case of clause (y) for advances consistent with past practice which are not material;
(xi) shall make not, and shall not permit any of its Subsidiaries to, (x) materially change any practice with respect to Taxes, (y) make, change or rescind revoke any material Tax election, amend or (z) settle or compromise any material dispute involving a Tax Return or liability;
(xii) shall not, and shall not permit any insurance policy naming it as a beneficiary of its Subsidiaries to, (x) declare, set aside or loss-payable payee pay any dividend or make any other distribution or payment with respect to be cancelled any shares of its capital stock or terminatedother ownership interests or (y) directly or indirectly redeem, purchase or otherwise acquire any shares of its capital stock or capital stock of any of its Subsidiaries, or make any commitment for any such action or (z) split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in each case except lieu of or in substitution for shares of its capital stock;
(xiii) shall not, and shall not permit any of its Subsidiaries to, issue, deliver, sell, pledge or otherwise encumber any shares of its capital stock, any other securities or any securities convertible into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities (other than the issuance of shares of Company Common Stock upon the exercise of Company Stock Options outstanding on the date hereof in accordance with their present terms);
(xiv) shall not, and shall not permit any of its Subsidiaries to, make or agree to make any capital expenditure or expenditures with respect to property, plant or equipment which, individually or in a manner series of related transactions, is in excess of $100,000 or, in the aggregate, are in excess of $500,000 except as otherwise in the ordinary course of business consistent with past practice in order to satisfy actual or expected contractual commitments to customers;
(xv) shall not, and shall not permit any of its Subsidiaries to, change any accounting principles or practices;
(xvi) shall not, and shall not permit any of its Subsidiaries to, pay, discharge, settle or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction, in the ordinary course of business consistent with past practice or as required by applicable Law;in accordance with their terms, of liabilities reflected or reserved against in the most recent consolidated financial statements (or the notes thereto) of the Company included in the Company Reports or incurred thereafter in the ordinary course of business consistent with past practice, or waive any material benefits of, or agree to modify in any material respect, any confidentiality, standstill, nonsolicitation or similar agreement to which the Company or any Subsidiary is a party; and
(mxvii) other than with respect to any actions permitted under Section 7.2shall not, neither it nor and shall not permit any of its Subsidiaries shall take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VIII not being satisfied; and
(n) neither it nor any of its Subsidiaries will authorize any oftake, or commit, resolve or agree, agree (in writing or otherwise, ) or resolve to take, any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operations.
Appears in 1 contract
Interim Operations. The Company (a) Yankees covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to until the earlier of the Yankees Effective Time (or the termination of this Agreement in accordance with its terms, unless Parent Braves shall otherwise consent approve in writing, which consent shall not unreasonably be withheld, and except as otherwise expressly contemplated by this Agreement or except as otherwise set forth in this Agreement):Section 4.1(a) of the Yankees Disclosure Letter:
(ai) the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, strategic partners, creditors, lessors, employees and business associatespast practice;
(bii) (A) it shall not (i) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (iiB) it shall not amend its certificate of incorporation or by-lawsbylaws; (iiiC) other than in the case of wholly-owned subsidiaries, it shall not split, combine or reclassify its outstanding shares of capital stock; (D) it shall not declare, set aside or pay any type of dividend, whether payable in cash, stock or property, in respect of any capital stock other than the quarterly dividends payable by Yankees (in an amount per share not to exceed its most recent quarterly per share dividend and with the timing of such dividend to be consistent with past practice) or, subject to Section 4.1(a)(viii) of the Yankees Disclosure Letter, dividends payable by its direct or indirect wholly owned Subsidiaries to it or another of its direct or indirectly wholly owned Subsidiaries; and (E) it shall not repurchase, redeem or otherwise acquire, or permit any of its Subsidiaries to purchase or otherwise acquire, any interests or shares of its capital stock, as applicable, or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(iii) neither it nor any of its Subsidiaries shall (A) issue, sell, pledge, dispose of or encumber (w) any shares of, or (x) securities payable in, convertible into or exchangeable or exercisable for, or (y) options, warrants, calls, commitments or rights of any kind to acquire, capital stock of any class, as appropriate, or (z) any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with its stockholders on any matter or any other property or assets other than Yankees Shares issuable pursuant to stock-based awards outstanding on or awarded prior to the date hereof under the Yankees Stock Plans; (B) (1) increase the amount of net indebtedness for borrowed money, including any guarantee of such indebtedness, by $100,000,000 in excess of the net indebtedness set forth in the Yankees Financial Statement as of December 31, 2012 (it being understood that net indebtedness shall be calculated as the amount of debt less the sum of the amount of cash and marketable securities, in each case, set forth in the Yankees Financial Statements as of December 31, 2012; it being further understood that notwithstanding the amount set forth in such Yankees Financial Statements, the non-U.S. dollar-denominated portion of such calculation shall be determined using the exchange rates in effect as of the date hereof without regard to any subsequent changes in such rates) or (2) incur any additional indebtedness for borrowed money with a tenor of greater than 90 days, including any guarantee of such indebtedness; or (C) make or authorize or commit for any capital expenditures, except for in accordance with the 2013 capital expenditure target for Yankees that has been provided to Braves prior to the date of this Agreement or such other capital expenditures targets as may be agreed by Yankees and Braves (provided that (1) Yankees shall be permitted to make or authorize or commit for any capital expenditures in an amount that is between 75% and 110% of its capital expenditure target and (2) if the Yankees Effective Time shall not have occurred on or prior to December 31, 2013, then, for purposes of this Section 4.1(a)(iii), Yankees’s capital expenditure target will be adjusted upwards to take into account the number of days between December 31, 2013 and the Yankees Effective Time and assuming that the 2014 capital expenditure target shall be equal to the 2013 capital expenditure target);
(iv) except as required pursuant to existing written, binding agreements in effect prior to the date hereof and set forth in Section 4.1(a)(iv) of the Yankees Disclosure Letter, or as otherwise required by applicable Law, neither Yankees nor any of its Subsidiaries shall (A) grant or provide any severance or termination payments or benefits to any director, officer or employee of Yankees or any of its Subsidiaries, (B) increase in any manner the compensation, bonus, pension, welfare, fringe, severance or other benefits of, pay any bonus to, or make any new equity awards to any current or former director, officer, employee or consultant of Yankees or any of its Subsidiaries (other than increases in base salary in the ordinary course of business for employees who are not officers), (C) become a party to, establish, adopt, commence participation in, amend or terminate any stock option plan or other stock-based compensation plan, or any compensation, severance, pension, retirement, profit-sharing, welfare benefit, or other employee benefit plan or agreement with or for the benefit of any current or former directors, officers, employees or consultants of Yankees or its Subsidiaries (or newly hired employees) or amend the terms of any outstanding equity-based awards, (D) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Benefit Plan, to the extent not already provided in any such Benefit Plan, (E) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization, (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP, (G) terminate without cause the employment of any member of the management committee of Yankees, or (H) forgive any loans or issue any loans to directors, officers or employees of Yankees or any of its Subsidiaries;
(v) neither Yankees nor any of its Subsidiaries shall lease, license, transfer, exchange or swap, mortgage (including securitizations), or otherwise dispose (whether by way of merger, consolidation, sale of stock or assets, or otherwise) of any material portion of its assets, including the capital stock of Subsidiaries (it being understood that the foregoing shall not prohibit the sale of inventory in the ordinary course of business), except for dispositions of assets that in total have an aggregate fair market value of less than $50,000,000;
(vi) neither Yankees nor any of its Subsidiaries shall (A) acquire or invest in or agree to acquire or invest in (whether by merger, consolidation, purchase or otherwise) any Person or assets, in which the expected gross expenditures and commitments (including the amount of any indebtedness assumed) (1) for all such acquisitions exceeds, in the aggregate, $50,000,000 or (2) is reasonably likely, individually or in the aggregate, to delay the satisfaction of the conditions set forth in Article V hereof or prevent the satisfaction of such conditions or (B) enter into any joint venture, partnership or similar agreement with any Person;
(vii) subject to Section 4.13, neither Yankees nor any of its Subsidiaries shall (A) settle or compromise any material claims or litigation if such settlement or compromise would involve, individually or together with all such other settlements or compromises, the payment of money by Yankees or its Subsidiaries of $60,000,000 (provided that Yankees shall consult in good faith with respect to any such proposed settlement or compromise individually in excess of $20,000,000) or more or would involve any admission of material wrongdoing or any material conduct requirement or restriction by Yankees or its Subsidiaries, (B) modify, amend or terminate in any material respect any of its Material Contracts or waive, release or assign any material rights or claims thereunder in excess of $10,000,000 individually or in the aggregate or (C) enter into any new clearing services agreement or arrangement or modify or amend in any material respect any existing clearing services agreement or arrangement to extend the term or to increase the commitments of Yankees or any of its subsidiaries thereunder;
(viii) except to the extent otherwise required by Law, neither Yankees nor any of its Subsidiaries shall (A) make or change any Tax election, change any method of Tax accounting, file any amended Tax Return, or settle or compromise any audit or proceeding relating to Taxes, in each case, if such action would reasonably be expected to have an adverse effect on Yankees and its Subsidiaries that is material, (B) take any action specified in Section 4.1(a)(viii)(B) of the Yankees Disclosure Letter or (C) permit any material insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated except in the ordinary and usual course of business;
(ix) neither Yankees nor any of its Subsidiaries shall permit any change in its financial accounting principles, policies or practice (including any of its practices with respect to accounts receivable or accounts payable), except to the extent that any such changes in financial accounting principles, policies or practices shall be required by changes in GAAP;
(x) neither Yankees nor any of its Subsidiaries shall enter into any Contract that includes a “non-compete,” exclusivity or similar provision that would materially restrict the business of Braves, Parent or any of their Subsidiaries (including Yankees and its Subsidiaries) following the Yankees Effective Time;
(xi) except as permitted pursuant to Section 4.1(a)(iv), neither Yankees nor any of its Subsidiaries shall enter into any Contract between itself, on the one hand, and any of its employees, officers or directors, on the other hand;
(xii) neither Yankees nor any of its Subsidiaries shall knowingly take or omit to take any action if such action or failure to act would be reasonably likely to prevent or impede (A) either of the Mergers from qualifying as a reorganization within the meaning of Section 368(a) of the Code, or (B) with respect to the Alternative Transaction, the Mergers, taken together, from qualifying as a transaction described in Section 351 of the Code;
(xiii) neither Yankees nor any of its Subsidiaries will authorize or enter into an agreement to do any of the foregoing set forth in Section 4.1(a)(i) through Section 4.1(a)(xii) if Yankees would be prohibited by the terms of Section 4.1(a)(i) through Section 4.1(a)(xii) from doing the foregoing; and
(xiv) it shall not fail to make in a timely manner any filings with the SEC required under the Securities Act or the Exchange Act or the rules and regulations promulgated thereunder.
(b) Braves covenants and agrees as to itself and its Subsidiaries that, after the date hereof and until the earlier of the Yankees Effective Time or the termination of this Agreement in accordance with its terms, unless Yankees shall otherwise approve in writing, and except as otherwise expressly contemplated by this Agreement or except as otherwise set forth in Section 4.1(a) of the Braves Disclosure Letter:
(i) it shall not (A) split, combine or reclassify its outstanding shares of capital stock, (B) declare, set aside or pay any dividend type of dividend, whether payable in cash, stock or property property, in respect of any of its capital stock, other than dividends from its direct and (C) directly or indirect wholly-owned Subsidiaries; or (v) purchaseindirectly repurchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock, if such repurchase or acquisition is at a price above the then market value;
(cii) it shall not issue, sell, dispose of or grant, or authorize the issuance, sale, disposition or grant of, any shares of any class of its capital stock except (A) for fair market value or (B) upon the vesting of restricted stock units or the exercise of options, warrants, convertible securities or other rights of any kind to acquire any of its capital stock which were issued with an exercise or conversion price of not less than the market price at the time of issuance; provided, however, that the foregoing shall not prohibit issuances of common stock, restricted stock units, options or rights as part of normal employee compensation in the ordinary course of business; and provided, further, that this clause (B) shall not prohibit the issuance of capital stock, restricted stock units, options, warrants, convertible securities or other rights in connection with any equity financing contemplated by Braves or Parent in connection with the transactions contemplated by this Agreement;
(iii) it shall not fail to make in a timely manner any filings with the SEC required under the Securities Act or the Exchange Act or the rules and regulations promulgated thereunder;
(iv) neither it nor any of its Subsidiaries shall (i) issue, sell, pledge, dispose of knowingly take or encumber omit to take any action if such action or failure to act would be reasonably likely to prevent or impede (A) any shares either of its capital stock the Mergers from qualifying as a reorganization within the meaning of any class, Rights or any Voting DebtSection 368(a) of the Code, or (B) securities convertible into or exchangeable or exercisable forwith respect to the Alternative Transaction, or optionsthe Mergers, warrantstaken together, calls, commitments or rights from qualifying as a transaction described in Section 351 of any kind to acquire, any shares of its capital stock of any class, Rights, any Voting Debt or any other property or assets (other than shares of Company Common Stock and associated Rights issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans); or (ii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire or encumber any material property or material assets (including capital stock of any of its Subsidiaries) or businessCode;
(d) neither it nor any of its Subsidiaries shall restructure, recapitalize, reorganize or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the operation of its assets or businesses or adopt resolutions providing for or authorizing any of the foregoing;
(ev) neither it nor any of its Subsidiaries shall acquire (iother than with respect to any agreements entered into prior to the date of this Agreement) or agree to acquire (whether by merging merger, consolidation, purchase or consolidating withotherwise, which have been previously publically disclosed or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (iiprovided to Yankees) any Person or assets that are materialis reasonably likely, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, except purchases of inventory and raw materials in the ordinary course of business (or as permitted by Section 7.1(g), whether or not material);
(f) neither it nor any of its Subsidiaries shall (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business), (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(g) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures delay in any quarter are less than $10 million, material respects the shortfall shall be available to the Company to spend in future quarters);
(h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measures;
(l) neither it nor any of its Subsidiaries shall make or rescind any material Tax election, amend any material Tax Return or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, in each case except in a manner consistent with past practice or as required by applicable Law;
(m) other than with respect to any actions permitted under Section 7.2, neither it nor any of its Subsidiaries shall take any action or omit to take any action that is reasonably likely to result in any satisfaction of the conditions to the Merger set forth in Article VIII not being satisfiedV hereof or prevent the satisfaction of such conditions; and
(nvi) neither it nor any of its Subsidiaries will authorize any of, or commit, resolve or agree, in writing or otherwise, enter into an agreement to take, do any of the foregoing actions; provided, however, that nothing contained set forth in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with Section 4.1(b)(i) through Section 4.1(b)(v) if it would be prohibited by the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operationsSection 4.1(b)(i) through Section 4.1(b)(v) from doing the foregoing.
Appears in 1 contract
Interim Operations. The Until the earlier of the Closing or the ------------------ termination of this Agreement, the Company covenants shall, and agrees as to itself and shall cause its Subsidiaries thatsubsidiaries to, after the date hereof and prior to the Effective Time (unless Parent Purchaser shall otherwise consent in writing, which consent shall not unreasonably be withheld, conduct the operations of the Inkjet Business and except as otherwise expressly contemplated by this Agreement or as set forth in this Agreement):
(a) the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, O-Sub according to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially usual, regular and ordinary course of business consistent with past practice and use reasonable best efforts to preserve its intact their respective business organization intact organizations and goodwill, to keep available the services of their officers and employees and to maintain its existing relations and goodwill satisfactory relationships with customers, suppliers, distributors, strategic partnersbrokers, creditorssales agents and all other persons having business relationships with them, lessorsincluding through the payment of additional compensation reasonably acceptable to Purchaser to such distributors, employees brokers and business associates;sales agents reasonably calculated to maintain at least the current level of merchandising, distribution and shelving. Without limiting the generality of the foregoing, until the earlier of the Closing or the termination of this Agreement, unless Purchaser shall otherwise consent in writing, the Company will:
(ba) it shall not pledge, sell, lease, assign, transfer or otherwise dispose of (by merger or otherwise) any of (i) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (ii) amend its certificate of incorporation or bythe O-laws; (iii) other than in the case of wholly-owned subsidiaries, split, combine or reclassify its outstanding shares of capital stock; (iv) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, other than dividends from its direct or indirect wholly-owned Subsidiaries; or (v) purchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(c) neither it nor any of its Subsidiaries shall (i) issue, sell, pledge, dispose of or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debt, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class, Rights, any Voting Debt or any other property or assets Sub Shares (other than shares of Company Common Stock pursuant - to the Loan and associated Rights issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans); Pledge Agreement) or (ii) transferthe Business Assets or Secondary -- Assets (including, leasewithout limitation, licensereceivables, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender leasehold interests or allow to lapse third party licenses or expire or encumber assignments of Intellectual Property and including any material property or material assets (including capital stock of any of its Subsidiariessale leaseback transaction) or business;
(d) neither it nor any of its Subsidiaries shall restructure, recapitalize, reorganize or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into any agreement or arrangement imposing material changes or restrictions on except for the operation of its assets or businesses or adopt resolutions providing for or authorizing any of the foregoing;
(e) neither it nor any of its Subsidiaries shall acquire (i) by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, except purchases sale of inventory and raw materials in the ordinary course of business (or as permitted by Section 7.1(g), whether or not material);
(f) neither it nor any of its Subsidiaries shall (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business);
(b) not effect any stock split, (ii) issuereverse stock split, sell or amend any debt securities or warrants or other rights to acquire any debt securities stock dividend, subdivision, reclassification of the Company O-Sub Shares, or otherwise change the capitalization of the O-Sub as it exists on the date hereof;
(c) preserve and maintain all the properties used in or relating to the Business Assets and Secondary Assets in a normal state of repair, order and condition, reasonable wear and use excepted;
(d) keep all the Business Assets and Secondary Assets insured (to the extent presently insured) against any loss, either by fire, other casualty, or theft and give notice to Purchaser of any loss involving any of its Subsidiaries, guarantee the Business Assets or Secondary Assets if such loss is at least $50,000 or more and discuss with Purchaser whether the proceeds of any debt securities claim made in connection with the loss should be used to replace any property damage or loss. Any proceeds not used to replace lost or damaged property shall be for the account of another Person, Purchaser if the Inkjet Option is exercised and consummated at the Closing;
(e) not enter into any “keep well” contract, agreement or other agreement commitment relating to maintain all or any financial statement condition of another Person or enter into any arrangement having the economic effect of any part of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(g) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 millionbusiness conducted by O-Sub, the shortfall shall be available to the Company to spend in future quarters);
(h) neither it nor any of its Subsidiaries shall make any material changes in accounting methodsBusiness Assets or Secondary Assets except for contracts, principles agreements or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except commitments in the ordinary course of business consistent with past practice;
(f) maintain all the books, enter intoaccounts and records relating to O-Sub and the Inkjet Business in the usual, renewregular and ordinary manner, modify, amend, terminate, waive, delay the exercise of, release or assign on a basis consistent with prior years;
(g) promptly advise Purchaser in writing of any material rights adverse change in the business, operations, financial condition or claims underprospects of O- Sub or the Inkjet Business or in the Business Assets, any Company Material Contract Secondary Assets or Company Lease Business Liabilities;
(h) comply in a manner materially adverse all material respects with the provisions of all laws, regulations, ordinances and judicial decrees applicable to Parent; provided, that, nothing herein shall permit the Company or any conduct of its Subsidiaries to O-Sub and the Inkjet Business;
(i) enter into any Contract promptly notify Purchaser of the type specified institution of any legal proceeding which may individually or in Section 5.5(a)(viii) the aggregate have a material adverse effect on the business, operations, properties, financial condition or Section 5.5(a)(ix) to prospects of O-Sub and the extent such Contract would survive after the Effective Time, or modify or amend in Inkjet Business taken as a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subjectwhole;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law prosecute and maintain all Intellectual Property used or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change held for use in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (connection with the input Inkjet Business or the business of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);O-Sub; and
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measures;
(l) neither it nor any of its Subsidiaries shall make or rescind any material Tax election, amend any material Tax Return or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, in each case except in a manner consistent with past practice or as required by applicable Law;
(m) other than with respect to any actions permitted under Section 7.2, neither it nor any of its Subsidiaries shall not take any action or omit to take any other action that is reasonably likely to result in nor enter into any agreement which would have the effect of (i) frustrating the purpose of - this Agreement or (ii) preventing or disabling the Company from delivering -- the Business Assets, the Secondary Assets upon exercise of the conditions to Inkjet Option, delivering the Merger set forth in Article VIII not being satisfied; and
(n) neither it nor any of its Subsidiaries will authorize any of, or commit, resolve or agree, in writing or otherwise, to take, any O-Sub Shares upon exercise of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly Subsidiary Stock Option or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of otherwise performing its obligations under this Agreement, complete control and supervision of its and its Subsidiaries’ operations.
Appears in 1 contract
Samples: Asset and Subsidiary Stock Option Agreement (Raster Graphics Inc)
Interim Operations. The Except as set forth in Section 6.1 of the Company Disclosure Letter, the Company covenants and agrees as to itself and its Subsidiaries and undertakes as to itself and its Subsidiaries to use commercially reasonable efforts in relation to its Joint Ventures as though for the purpose of the remainder of this Article VI its Joint Ventures were Subsidiaries that, after the date hereof and prior to the Effective Time (unless Parent shall otherwise consent approve in writing, which consent shall not be unreasonably be withheldwithheld or delayed, and except as otherwise expressly contemplated by this Agreement or as set forth in this Agreement):
(a) the business of it its and its Subsidiaries Subsidiaries' businesses shall be conducted in the ordinary and usual course and(it being understood and agreed that nothing contained herein shall permit the Company to enter into or engage in (through acquisition, product extension or otherwise) the business of selling any products or services materially different from existing products or services of the Company and its Subsidiaries, to enter into or engage in new lines of business, to utilize new distribution methods, expand into new geographic territories outside of the United States, or to exit any current business of the Company or its Subsidiaries, without Parent's prior written approval);
(b) to the extent consistent therewith, with (a) above it and its Subsidiaries shall use their respective commercially reasonable best efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, reinsurers, distributors, strategic partners, creditors, lessors, employees and business associates;
(bc) it shall not (i) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (ii) amend its certificate of incorporation Charter or by-lawslaws or amend, modify or terminate the Rights Agreement except as contemplated by Section 5.1(o)(ii); (iii) other than in the case of wholly-owned subsidiaries, split, combine or reclassify its outstanding shares of capital stock; (iv) authorize, declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, stock other than dividends from its direct or indirect wholly-owned SubsidiariesSubsidiaries and other than regular quarterly dividends paid by the Company on its Common Shares not in excess of $.09 per share, with usual record and payment dates and in accordance with the Company's past dividend policy; or (v) purchaserepurchase, redeem or otherwise acquire, except for in connection with any of the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock OptionsPlans, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(cd) neither it nor any of its Subsidiaries shall (i) issue, sell, pledge, dispose of or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debtof, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class, Rights, any Voting Debt class or any other property or assets (other than shares of Company Common Stock and associated Rights Shares issuable pursuant to options and other stock-based awards outstanding on the date hereof under any of the Company Stock Plans); or (ii) other than in the ordinary and usual course of business, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire of or encumber any material other property or material assets (including capital stock of any of its Subsidiaries) or business;
(d) neither it nor incur or modify any of its Subsidiaries shall restructure, recapitalize, reorganize or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the operation of its assets or businesses or adopt resolutions providing for or authorizing any of the foregoing;
(e) neither it nor any of its Subsidiaries shall acquire (i) by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association indebtedness or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, except purchases of inventory and raw materials in the ordinary course of business (or as permitted by Section 7.1(g), whether or not material);
(f) neither it nor any of its Subsidiaries shall (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business), (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, liability; (iii) make or authorize or commit for any loanscapital expenditures, advances (including entering into capital lease obligations, other than routine advances to employees of the Company and its Subsidiaries in amounts not exceeding $1 million in the ordinary course of business) or capital contributions toaggregate or, by any means, make any acquisition of, or investment in, assets or stock of any other PersonPerson or entity, other than the Company or any including by way of its direct or indirect wholly owned Subsidiariesassumption reinsurance, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(g) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 100,000 individually or $1 million per quarter in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters);
(h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practiceinvestment and reinsurance activities); provided(iv) enter into, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of amend or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places terminate any material restrictions on the ability of the Company Contract or any of its Subsidiaries to impose any labor saving or other cost reduction measures;
(lv) neither it nor any of its Subsidiaries shall make or rescind any material Tax election, amend any material Tax Return or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled canceled or terminatedterminated except in the ordinary and usual course of business;
(e) neither it nor any of its Subsidiaries shall terminate, establish, adopt, enter into, make any new grants or awards under, amend or otherwise modify, any employee benefit or incentive plan or employment or other agreement (including the Compensation and Benefit Plans) or hire or terminate the employment of key employees, or increase the salary, wage, bonus or other compensation of any employees except increases occurring in the ordinary and usual course of business (which shall include normal periodic performance reviews and related compensation and benefit increases);
(f) neither it nor any of its Subsidiaries shall pay, discharge, settle or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction of claims, liabilities or obligations legally due and payable and arising in the ordinary and usual course of business and such other claims, liabilities or obligations as shall not exceed $1 million in the aggregate and other than regular semi-annual payments paid by MMI Capital Trust I on its 7 5/8% Series B Capital Trust Securities (the "Trust Securities") pursuant to the Indenture, dated December 23, 1997, between The Chase Manhattan Bank and the Company, pursuant to which the Trust Securities were issued;
(g) neither it nor any of its Subsidiaries shall make, change or revoke any Tax election, settle or compromise any material Tax liability arising in any audit, change its method of accounting if such change would have a material impact on Taxes, enter into any closing or other agreement with respect to a material amount of Taxes, file a request for refund of a material amount of Taxes (but not including the prosecution of any refund claim pending on the date hereof), or file an amended Tax Return if such Tax Return is materially different from the original return to which it relates, except, in each case except case, (i) in a manner the ordinary course of business and consistent with the Company's past practice in respect of the Tax at issue in the jurisdiction in question or as required by applicable Law(ii) with the consent of Parent, such consent not to be unreasonably withheld;
(mh) neither it nor any of its Subsidiaries shall enter into any agreement containing any provision or covenant limiting in any material respect the ability of the Company or any Subsidiary or Affiliate to (A) sell any products or services of or to any other Person, (B) engage in any line of business or (C) compete with or to obtain products or services from any Person or limiting the ability of any Person to provide products or services to the Company or any of its Subsidiaries or Affiliates;
(i) neither it nor any of its Subsidiaries shall enter into any new quota share or other reinsurance transaction (A) which does not contain standard cancellation and termination provisions, (B) which, except in the ordinary course of business, materially increases or reduces the Company Insurance Subsidiaries' consolidated ratio of net written premiums to gross written premiums or (C) pursuant to which $1 million or more in gross written premiums are ceded by the Company Insurance Subsidiaries to any Person other than with respect to the Company or any actions permitted under Section 7.2, of its Subsidiaries;
(j) neither it nor any of its Subsidiaries shall take any action or omit to take any action that is reasonably likely would cause any of its representations and warranties herein to result become untrue in any material respect;
(k) neither it nor any of the conditions to the Merger set forth Company Insurance Subsidiaries will alter or amend in Article VIII not being satisfiedany material respect their existing underwriting, claim handling, loss control, investment, actuarial, financial reporting or accounting practices, guidelines or policies or in any material assumption underlying an actuarial practice or policy, except as may be required by GAAP or SAP; and
(nl) neither it nor any of its Subsidiaries will authorize any of, or commit, resolve or agree, in writing or otherwise, enter into an agreement to take, do any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operationsforegoing.
Appears in 1 contract
Samples: Merger Agreement (Mmi Companies Inc)
Interim Operations. The Except with Purchaser’s prior written consent (not to be unreasonably withheld, conditioned or delayed), Seller shall cause each of the Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior (i) to the Effective Time (unless Parent shall otherwise consent in writing, which consent shall not unreasonably be withheld, and except as otherwise expressly contemplated by this Agreement or as set forth in this Agreement):
(a) the conduct its business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and use its Subsidiaries shall use their respective commercially reasonable efforts to (A) preserve its business organization intact and organizations intact, (B) maintain its existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, strategic partners, creditors, lessors, employees and business associates, and (C) keep available the services of its present employees and agents; and (ii) not to (other than as set forth in the corresponding section of the Seller Disclosure Letter):
(a) amend its Organizational Documents;
(b) it shall not merge or consolidate with any other Person;
(ic) acquire assets outside of the ordinary course of business consistent with past practice from any other Person with a value or purchase price in the aggregate in excess of $50,000,000.00 or that would have any possibility of preventing or delaying the Closing beyond the Termination Date;
(d) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (ii) amend its certificate of incorporation or by-laws; (iii) other than in the case of wholly-owned subsidiariesof, splitgrant, combine or reclassify its outstanding shares of capital stock; (iv) declaretransfer, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, other than dividends from its direct or indirect wholly-owned Subsidiaries; or (v) purchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock OptionsEncumber, or permit any of its Subsidiaries to purchase or otherwise acquireauthorize the issuance, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(c) neither it nor any of its Subsidiaries shall (i) issue, sellsale, pledge, dispose of or encumber (A) any shares of its capital stock of any classdisposition, Rights or any Voting Debtgrant, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class, Rights, any Voting Debt or any other property or assets (other than shares of Company Common Stock and associated Rights issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans); or (ii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose guarantee or other Encumbrance of, abandon, cancel, surrender or allow to lapse or expire or encumber any material property or material assets (including capital stock of any of its Subsidiaries) or business;
(d) neither it nor any of its Subsidiaries shall restructure, recapitalize, reorganize or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the operation of its assets or businesses or adopt resolutions providing for or authorizing any of the foregoing;
(e) neither it nor any of its Subsidiaries shall acquire (i) by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, except purchases of inventory and raw materials in the ordinary course of business (or as permitted by Section 7.1(g), whether or not material);
(f) neither it nor any of its Subsidiaries shall (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business), (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(g) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters);
(h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs Equity Interests of the Company or any of its Subsidiaries (other than the issuance of Equity Interests (i) by a wholly-owned Subsidiary of the Company to the Company or places another wholly-owned Subsidiary or (ii) by the Company to Seller), securities convertible or exchangeable into, or exercisable for, any material restrictions Equity Interests or any options, warrants or other rights of any kind to acquire any such Equity Interests or such convertible or exchangeable securities;
(e) create or incur any Encumbrance (other than a Permitted Encumbrance) on the ability assets of the Company or any of its Subsidiaries that, individually or in the aggregate, is material to impose the Company or any labor saving or other cost reduction measuresof its Subsidiaries;
(lf) neither it nor make any of its Subsidiaries shall make loans, advances, guarantees or rescind any material Tax election, amend any material Tax Return capital contributions to or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, in each case except in a manner consistent with past practice or as required by applicable Law;
(m) other than with respect to any actions permitted under Section 7.2, neither it nor any of its Subsidiaries shall take any action or omit to take any action that is reasonably likely to result investments in any of the conditions to the Merger set forth in Article VIII not being satisfied; and
(n) neither it nor any of its Subsidiaries will authorize any ofPerson, or commit, resolve or agree, in writing or otherwise, to take, any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operations.other than
Appears in 1 contract
Samples: Stock Purchase Agreement
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless Parent Keystone shall otherwise consent approve in writing, which consent approval shall not be unreasonably be withheldwithheld or delayed, and except as otherwise expressly contemplated by this Agreement Agreement, the Stock Option Agreement, the Company Disclosure Letter or as set forth in this Agreementrequired by applicable Law):
(ai) the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially all reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, strategic partners, creditors, lessors, employees and business associates;
(bii) it shall not (i) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (iiA) amend its certificate of incorporation or by-laws; (iiiB) other than in the case of wholly-owned subsidiaries, split, combine combine, subdivide or reclassify its outstanding shares of capital stock; (ivC) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, other than dividends from its direct or indirect wholly-owned Subsidiaries; or (vD) purchaserepurchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(ciii) neither it nor any of its Subsidiaries shall (iknowingly take any action that would prevent the merger from qualifying as a tax-free "reorganization" within the meaning of Section 368(a) issue, sell, pledge, dispose of the Code or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debt, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class, Rights, any Voting Debt or any other property or assets (other than shares of Company Common Stock and associated Rights issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans); or (ii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire or encumber any material property or material assets (including capital stock of that would cause any of its Subsidiaries) or businessrepresentations and warranties herein to become untrue in any material respect;
(div) neither it nor any of its Subsidiaries shall restructureterminate, recapitalizeestablish, reorganize adopt, enter into, make any new grants or completely or partially liquidate or adopt a plan of complete or partial liquidation awards under, amend or otherwise enter into modify, any agreement Compensation and Benefit Plans or arrangement imposing material changes Stock Plans or restrictions increase the salary, wage, bonus or other compensation of any directors, officers or employees or take any action which would result in an acceleration of benefits or vesting under the Stock Plans as a result of the consummation of the Merger which would not otherwise occur pursuant to the terms and conditions of such benefits or Stock Plan grants, awards or options as in effect on the operation of its assets or businesses or adopt resolutions providing for or authorizing any of the foregoingdate hereof;
(ev) neither it nor any of its Subsidiaries shall acquire issue any preferred stock or incur any indebtedness for borrowed money (i) by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, except purchases of inventory and raw materials than indebtedness in the ordinary course of business (consistent with past practice, indebtedness incurred solely for the purpose of funding the Escrow Account or as permitted by Section 7.1(gthe replacement or refinancing of existing short-term indebtedness), whether or not material);
(f) neither it nor any of its Subsidiaries shall (i) incur any indebtedness for borrowed money ; or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business), (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange ratesindebtedness;
(gvi) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in an aggregate amount in excess of $10 million per quarter the aggregate amount reflected in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if Company's capital expenditures in any quarter are less than $10 million, the shortfall shall be available expenditure budget heretofore delivered to the Company to spend in future quarters)Keystone;
(h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (ivii) except as otherwise requested contemplated by Parent pursuant to Section 7.11(c6.1(a)(iv), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiateissue, settle deliver, sell, or compromise encumber shares of any litigation, claim, grievance, charge or proceeding involving any Intellectual Property class of its common stock or any other material litigationsecurities convertible into, claimor any rights, grievancewarrants or options to acquire, charge or proceeding (other than in connection with any such shares except the enforcement of option granted under the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); provided, however, that notwithstanding any other provision of this Stock Option Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places any material restrictions options and performance share programs outstanding on the ability of date hereof under the Company or any of its Subsidiaries Stock Plans, and shares issuable pursuant to impose any labor saving or other cost reduction measuressuch options and performance share programs;
(lviii) neither it nor any of its Subsidiaries shall make acquire any business, whether by merger, consolidation, purchase of property or rescind any material Tax election, amend any material Tax Return assets or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, in each case except in a manner consistent with past practice or as required by applicable Lawotherwise;
(mix) other than with respect to any actions permitted under Section 7.2, neither it nor any of its Subsidiaries shall take agree prior to the Effective Time to do any action of the foregoing after the Effective Time.
(b) Keystone covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless the Company shall otherwise approve in writing, which approval shall not be unreasonably withheld or omit delayed, and except as otherwise expressly contemplated by this Agreement or in the Keystone Disclosure Letter or as required by applicable Law):
(i) the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use all reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, creditors, lessors, employees and business associates;
(ii) it shall not (A) amend its certificate of incorporation or by-laws in any manner that would prohibit or hinder, impede or delay in any material respect the Merger or the consummation of the transactions contemplated hereby; (B) declare, set aside or pay any dividend or other distribution payable in cash or property in respect of any capital stock; or (C) repurchase, redeem or otherwise acquire, or permit any of its Subsidiaries to purchase or otherwise acquire, except in open market transactions or in connection with the Keystone Stock Plans, any shares of its capital stock or any securities convertible into or exchangeable for any shares of its capital stock;
(iii) neither it nor any of its Subsidiaries shall knowingly take any action that is reasonably likely would prevent the Merger from qualifying as a tax-free "reorganization" within the meaning of Section 368(a) of the Code or that would cause any of its representations and warranties herein to result become untrue in any material respect, provided, however, that nothing contained herein shall limit the ability of Keystone to exercise its rights under the conditions to the Merger set forth in Article VIII not being satisfiedStock Option Agreement; and
(niv) neither it nor any of its Subsidiaries will authorize any of, or commit, resolve or agree, in writing or otherwise, enter into an agreement to take, do any of the foregoing actions; provided, however, foregoing.
(c) Keystone and the Company agree that nothing contained in any written approval obtained under this Agreement shall give to Parent, directly Section 6.1 may be relied upon by the other party if signed by the Chief Executive Officer or indirectly, rights to control or direct the operations Chief Financial Officer of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operationsother party.
Appears in 1 contract
Samples: Merger Agreement (Keystone Automotive Industries Inc)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, that after the date hereof and prior to the Effective Time (unless Parent shall otherwise consent in writingapprove, which consent approval shall not be unreasonably be withheldwithheld or delayed, and except as otherwise expressly contemplated by this Agreement or as set forth in this Agreement):
(ai) the business of it the Company and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially best reasonable efforts to (A) preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, strategic partners, creditors, lessors, employees and business associatesassociates and (B) maintain and keep material properties and assets in as good repair and condition as such are in as of the date hereof, subject to ordinary wear and tear;
(bii) it the Company shall not (iA) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (iiB) amend its certificate articles of incorporation or by-lawslaws or amend, modify or terminate the Rights Agreement; (iiiC) other than in the case of wholly-owned subsidiaries, split, combine combine, subdivide or reclassify its outstanding shares of capital stock; (ivD) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, stock (other than dividends from its direct or indirect wholly-wholly owned Subsidiaries and other than regular quarterly cash dividends not in excess of $0.255 per Share and regular quarterly cash dividends on the preferred and preference stock of its Subsidiaries); or (vE) purchaserepurchase, redeem or otherwise acquire, acquire (except for (I) mandatory sinking funds obligations existing on the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options date hereof and (II) open market repurchases pursuant to the extent required or permitted under the terms of such Company the Company's Direct Stock OptionsPurchase Plan and Dividend Reinvestment Plan), or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(ciii) neither it the Company nor any of its Subsidiaries shall (iA) issue, sell, pledge, dispose of or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debtof, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class, Rights, any Voting Debt class or any other property or assets (other than shares of Company Common Stock and associated Rights (I) Shares issuable pursuant to options and other stock-based awards rights outstanding on the date hereof under the Company Stock Plans, issuances of additional options or rights to acquire Shares granted pursuant to the terms of the Stock Plans as in effect on the date hereof in the ordinary and usual course of the operation of such Stock Plans and issuances of Shares pursuant to options granted after the date hereof pursuant to the Stock Plans and (II) Shares issuable pursuant to the terms of the outstanding Feline Prides); or (iiB) (I) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire of or encumber any material of its coal fines property or material assets assets, or, (including capital stock of any of its SubsidiariesII) or business;
(dexcept as identified on Section 6.1(a)(iii) neither it nor any of its Subsidiaries shall restructure, recapitalize, reorganize or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the operation of its assets or businesses or adopt resolutions providing for or authorizing any of the foregoing;
(e) neither it nor any of its Subsidiaries shall acquire (i) by merging or consolidating withCompany Disclosure Letter, or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, except purchases of inventory and raw materials than in the ordinary and usual course of business (or as permitted by Section 7.1(g), whether or not material);
(f) neither it nor any of its Subsidiaries shall (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (and other than sales not in excess of $100,000,000 in the aggregate or $30,000,000 in respect of any transaction or series of related transactions, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber any other property or assets; (C) make or authorize or commit for any capital expenditures or operation and maintenance expenditures in excess of 110% of those contemplated to be spent pursuant to the Credit Agreement year 1999, 2000 or 2001 capital appropriations/spending budgets set forth in the ordinary course of business), (iiSection 6.1(a) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company Disclosure Letter; or (D) by any of its Subsidiariesmeans, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions toacquisition of, or investment in, assets or stock of, or other interest in, any other Person, other than the Company Person or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(g) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment entity in excess of $10 million per quarter 100,000,000 in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures or $30,000,000 in respect of any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters)transaction or series of related transactions;
(h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on in Section 7.1(j6.1(a)(iv) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect theretoLetter, neither the Company nor any of its Subsidiaries shall initiate(A) incur, settle assume or compromise prepay any litigation, claim, grievance, charge long-term debt or proceeding involving incur or assume any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and short-term debt other than in the ordinary and usual course of business in amounts and for purposes consistent with past practice under existing lines of credit, and except for the incurrence of long-term indebtedness in connection with the refinancing of existing indebtedness either at its stated maturity or at a lower cost of funds, (B) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any third-party, including by means of any "keep well" or other agreement to support or maintain any financial statement condition of another person, except in the ordinary and usual course of business, (C) accelerate or delay collection of notes or accounts receivable in advance of or beyond their regular due dates or the dates consistent with past practice); provided, howeveror (D) change any accounting principle, practice or method in a manner that notwithstanding is inconsistent with past practice, except to the extent required by U.S. GAAP as advised by the Company's regular independent accountants;
(v) neither the Company nor any of its Subsidiaries shall take or fail to take any action that is reasonably likely to make any representation or warranty of the Company contained herein inaccurate in any material respect at, or as of any time prior to, the Effective Time, or that is, individually or in the aggregate, reasonably likely to have a Material Adverse Effect;
(vi) except as required by applicable Law, an existing collective bargaining agreement or other provision Contract identified in Section 6.1(a)(vi) of this Agreementthe Company Disclosure Letter, neither the Company nor any of its Subsidiaries shall terminate, establish, adopt, enter into into, make any settlement new grants or awards under, amend or otherwise modify, any Compensation and Benefit Plans (other than issuances of additional options, performance shares or compromise any litigation, claim, grievance, charge or proceeding that, whether at rights to acquire Shares granted pursuant to the time terms of the settlement or compromise or at any time Stock Plans as in effect on the date hereof in the futureordinary and usual course of the operation of such Stock Plans, materially provided, that any such additional options, performance shares or rights to acquire Shares shall not vest in connection with the Merger and the other transactions contemplated by this Agreement), or except as required by any existing contract with a non-officer employer increase the salary, wage, bonus or other compensation of any employees, except increases occurring in the labor ordinary and usual course of business (which shall include normal periodic performance reviews and related compensation and benefit increases);
(vii) except as required by applicable law, an existing collective bargaining agreement or operating costs other Contract identified in Section 6.1(a)(vii) of the Company or Disclosure Letter, neither the Company nor any of its Subsidiaries shall grant any severance or places termination pay to, or enter into any material restrictions on employment or severance agreement with any director or officer of it or such Subsidiaries, provided, that the ability foregoing shall not require the Company to violate any of its obligations existing prior to the date hereof as set forth in Section 5.1(h) of the Company or Disclosure Letter;
(viii) neither the Company nor any of its Subsidiaries to impose shall settle or compromise any labor saving material claims or other cost reduction measureslitigation or amend or terminate any of its material Contracts or waive, release or assign any material rights or claims;
(lix) neither it the Company nor any of its Subsidiaries shall make or rescind any material Tax election, amend any material Tax Return election (other than in the ordinary and usual course or as is required by Law) or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled canceled or terminatedterminated except in the ordinary and usual course of business; and
(x) neither the Company nor any of its Subsidiaries will authorize or enter into an agreement to do any of the foregoing.
(b) Parent covenants and agrees as to itself and its Subsidiaries that after the date hereof and prior to the Effective Time (unless the Company shall otherwise approve, which approval shall not be unreasonably withheld or delayed, and except as otherwise expressly contemplated by this Agreement):
(i) the business of Parent and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective best reasonable efforts to (A) preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, creditors, lessors, employees and business associates and (B) maintain and keep material properties and assets in as good repair and condition as such are in as of the date hereof, subject to ordinary wear and tear;
(ii) it shall not (A) amend its articles of incorporation or by-laws; (B) split, combine, subdivide or reclassify its outstanding shares of capital stock; (C) declare, set aside or pay any dividend payable, in each case cash, stock or property in respect of any capital stock, other than dividends from its direct or indirect wholly owned Subsidiaries and other than regularly quarterly cash dividends not in excess of $0.515 per share of Parent Common Stock and regularly quarterly cash dividends on the preferred and preference stock of its Subsidiaries; (D) repurchase, redeem or otherwise acquire, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of Parent Common Stock or any securities convertible into or exchangeable or exercisable for any shares of Parent Common Stock (other than repurchases, redemptions or other acquisitions which are made at the then-prevailing market price of Parent Common Stock on the NYSE and which in the aggregate do not exceed ten percent of the shares of Parent Common Stock outstanding as of the date hereof) or (E) except as permitted under this Agreement, enter into any agreement with respect to a merger, reorganization, share exchange, consolidation or similar transaction involving, or any purchase of all or substantially all of the equity securities of it or any of its Significant Subsidiaries (as such term is defined in Rule 1-02 of Regulation S-X under the Exchange Act);
(iii) neither Parent nor any of its Subsidiaries shall, (A) issue, sell, pledge, dispose of or encumber any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of Parent Common Stock (other than (I) shares of Parent Common Stock issuable pursuant to options outstanding on the date hereof under the Parent Stock Plan, issuances of additional options or rights to acquire shares of Parent Common Stock granted pursuant to the terms of the Parent Stock Plan as in effect on the date hereof in the ordinary and usual course of the operation of such Parent Stock Plan and issuances of shares of Parent Common Stock pursuant to options granted after the date hereof pursuant to the Parent Stock Plan and (II) issuances of Parent Common Stock, or securities convertible with or -42- 49 exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, shares of Parent Common Stock, to a third-party on arms-length terms not in excess of 20% of the number of shares of Parent Common Stock outstanding as of the date hereof), (B) other than pursuant to the year 1999, 2000 or 2001 capital appropriations/ spending budgets set forth in Section 6.1(b) of the Parent Disclosure Letter and other than in the ordinary and usual course of business (I) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber any property or assets, and other than sales not in excess of $250,000,000 in the aggregate; or (II) by any means, make any acquisition of, or investment in, assets or stock of, or other interest in, any other Person or entity in excess of $250,000,000 in the aggregate or (C) acquire "Beneficial Ownership" (as such term is defined in the Rights Agreement) of any Shares;
(iv) Parent shall not change any material accounting principle, practice or method in a manner consistent that is inconsistent with past practice or as practice, except to the extent required by applicable LawU.S. GAAP as advised by Parent's regular independent accountants;
(mv) other than with respect to any actions permitted under Section 7.2, neither it Parent nor any of its Subsidiaries shall take any action or omit fail to take any action that is reasonably likely to result make any representation or warranty of such party contained herein inaccurate in any material respect at, or as of any time prior to, the conditions Effective Time, or that is, individually or in the aggregate, reasonably likely to the Merger set forth in Article VIII not being satisfiedhave a Material Adverse Effect; and
(nvi) neither it Parent nor any of its Subsidiaries will authorize any of, or commit, resolve or agree, in writing or otherwise, enter into an agreement to take, do any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operationsforegoing.
Appears in 1 contract
Samples: Merger Agreement (Dte Energy Co)
Interim Operations. The Company covenants From and agrees as to itself and its Subsidiaries that, after the date hereof and prior hereof, the Seller shall cause the Company to conduct the Effective Time (unless Parent shall otherwise consent in writing, which consent shall not unreasonably be withheld, and except as otherwise expressly contemplated by this Agreement or as set forth in this Agreement):
(a) the business of it and its Subsidiaries shall be conducted Business in the ordinary course consistent with past practice and usual course and, to the extent consistent therewith, it and use its Subsidiaries shall use their respective commercially reasonable efforts to preserve its business organization intact the assets, properties and maintain its existing relations and goodwill relationships with customers, suppliers, distributors, strategic partners, creditors, lessors, employees and third parties having material business associatesdealings with the Company. Without limiting the generality of the foregoing, except (a) as otherwise required by this Agreement, (b) for actions approved by the Purchaser (which approval shall not be unreasonably withheld, conditioned or delayed), (c) as required to comply with applicable Law or (d) as set forth on Section 5.1 of the Disclosure Schedule, from and after the date hereof, the Seller shall not (solely with respect to the Company), and shall cause the Company not to take any of the following actions:
(i) adopt any change in its certification of incorporation, bylaws or other similar organizational or governing documents;
(bii) it shall not adopt a plan or agreement of complete or partial liquidation, dissolution, restructuring, merger, consolidation, restructuring, recapitalization or other reorganization;
(iiii) (A) issue, sell, transfer, pledge, dispose of or encumber the Equity Interests or any capital stock owned by it in any of its Subsidiaries; (ii) amend its certificate of incorporation other equity or by-laws; (iii) other than in the case of wholly-owned subsidiaries, split, combine or reclassify its outstanding shares of capital stock; (iv) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, other than dividends from its direct or indirect wholly-owned Subsidiaries; or (v) purchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment similar interests of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(c) neither it nor any of its Subsidiaries shall (i) issue, sell, pledge, dispose of or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debt, or (B) securities convertible into grant any option, warrant or exchangeable other right to purchase or exercisable forobtain, or optionsotherwise dispose of or encumber, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class, Rights, any Voting Debt the Equity Interests or any other property equity or similar interests of the Company;
(iv) enter into or consummate any transaction or series of transactions involving the acquisition of the business, stock, assets or other properties of any other Person, whether by merger, consolidation, purchase or otherwise, for consideration in excess of $250,000, individually, or $250,000, in the aggregate;
(other than shares of Company Common Stock and associated Rights issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans); or (iiv) transfersell, lease, license, guaranteetransfer, sellexchange or swap, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire or encumber any material property or material assets (including capital stock of any of its Subsidiaries) or business;
(d) neither it nor any of its Subsidiaries shall restructure, recapitalize, reorganize or completely or partially liquidate or adopt a plan of complete or partial liquidation mortgage or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the operation of its assets or businesses or adopt resolutions providing for or authorizing any of the foregoing;
(e) neither it nor any of its Subsidiaries shall acquire (i) by merging or consolidating withencumber, or by purchasing all or a substantial portion of the assets of or subject to any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, except purchases of inventory and raw materials in the ordinary course of business (or as permitted by Section 7.1(g), whether or not material);
(f) neither it nor any of its Subsidiaries shall (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person Encumbrance (other than pursuant to Permitted Encumbrance) or otherwise dispose of any portion of its properties or assets with a value or purchase price in the Credit Agreement aggregate in excess of $250,000 other than (A) in the ordinary course of business), (iiB) issuepursuant to existing agreements in effect prior to the date hereof, sell (C) as may be required by applicable Law or amend any debt securities Governmental Authority in order to permit or warrants or other rights to acquire any debt securities facilitate the consummation of the Company transactions contemplated by this Agreement, or (D) dispositions of obsolete or worthless assets;
(vi) incur, assume, guarantee, prepay or otherwise become liable for any of its SubsidiariesIndebtedness, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries (A) in the ordinary course of business, and (B) Indebtedness incurred pursuant to agreements in effect prior to the execution of this Agreement;
(vii) enter into, renew, amend or capital contributions tomodify in any material respect, or investment interminate any Material Contract, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into or increase in any hedging agreement material respect the benefits under any Company Plan or other financial agreement or arrangement designed to protect modify any Company Plan where such modification has a material cost impact on the Company or its Subsidiaries against fluctuations in commodities prices or exchange ratesCompany;
(gviii) neither it nor any of its Subsidiaries shall make (A) incur or commit to any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters);
(h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement cap expenditure budget set forth on Section 7.1(j5.1(viii) of the Company Disclosure Schedule, grant (B) omit to incur any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including capital expenditure set forth on the grant cap expenditure budget set forth on 5.1(viii) of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, Disclosure Schedule or (viiC) take enter into any action to fund or in any other way secure the payment new line of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above)business;
(kA) except for matters identified in Section 7.1(k) of the Company Disclosure Schedulemake, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle change or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measures;
(l) neither it nor any of its Subsidiaries shall make or rescind revoke any material Tax election, amend (B) file any amended Tax Return, or (C) settle or compromise any material Tax Return liability for Taxes or permit surrender any insurance policy naming it as material claim for a beneficiary or loss-payable payee to be cancelled or terminated, in each case except in a manner consistent with past practice or as required by applicable Lawrefund of Taxes;
(mx) settle or compromise any pending or threatened action, suit, investigation, arbitration or administrative or other proceeding for an amount in excess of a specific accrual and reserve established in the Financial Statements in respect of such matter, except for any settlement or compromise that arises in the ordinary course to the extent such settlement or compromise does not involve the incurrence or expenditure by the Company of cash payments (or payment commitments) of more than with respect to any actions permitted under Section 7.2, neither it nor any of its Subsidiaries shall $100,000 in the aggregate;
(xi) take any action or omit to take any action that is could reasonably likely be expected to result in cause any of the conditions Permit to the Merger set forth in Article VIII not being satisfiedbe suspended or revoked; andor
(nxii) neither it nor change its financial accounting policies or procedures or any of its Subsidiaries will authorize any ofmethods of reporting income, deductions or other items for financial accounting purposes, except as required by GAAP or applicable Law; or
(xiii) authorize, or commitagree or commit to do, resolve or agree, whether in writing or otherwise, to take, any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operationsforegoing.
Appears in 1 contract
Samples: Equity Purchase Agreement (Primus Telecommunications Group Inc)
Interim Operations. The Company (a) Each of the Vendors, jointly and severally, covenants and agrees as to itself and its Subsidiaries that, after that during the date hereof and prior to Interim Period the Effective Time (unless Parent Business shall otherwise consent be run in writing, which consent shall not unreasonably be withheld, and except as otherwise expressly contemplated by this Agreement or as set forth in this Agreement):accordance with the following provisions:
(ai) during the business Interim Period the representatives of it and its Subsidiaries the Purchasers shall be conducted in entitled to have access to and be present at the ordinary and usual course and, to Business premises of the extent consistent therewith, it and its Subsidiaries shall use their respective commercially Vendors at all times during the Vendors' reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, strategic partners, creditors, lessors, employees and business associateshours;
(bii) it during the Interim Period the Vendors shall not, without the prior written consent of the Purchasers, such consent not to be unreasonably withheld or delayed:
(iA) issue, permit any of the Purchased Assets to be subjected to any Encumbrance;
(B) sell, pledge, transfer or otherwise dispose of any of the Purchased Assets;
(C) grant any increase in the benefits, rate of wages, salaries, or encumber bonuses for Employees;
(D) make any capital stock owned by it change in any method of accounting practice applicable to the Business;
(E) cancel or reduce any of its Subsidiaries; insurance coverage relating to Purchased Assets or the Business;
(iiF) amend its certificate of incorporation or by-laws; (iii) other commit to expend more than $10,000 in the case of wholly-owned subsidiaries, split, combine or reclassify its outstanding shares of capital stock; (iv) declare, set aside or pay any dividend payable in cash, stock or property in aggregate with respect of to any capital stockexpenditure of the Business;
(G) acquire (by merger, other than dividends from its direct amalgamation, consolidation or indirect wholly-owned Subsidiaries; or (v) purchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(cassets) neither it nor any of its Subsidiaries shall (i) issue, sell, pledge, dispose of or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debt, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class, Rights, any Voting Debt or any other property or assets (other than shares of Company Common Stock and associated Rights issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans); or (ii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire or encumber any material property or material assets (including capital stock of any of its Subsidiaries) or business;
(d) neither it nor any of its Subsidiaries shall restructure, recapitalize, reorganize or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the operation of its assets or businesses or adopt resolutions providing for or authorizing any of the foregoing;
(e) neither it nor any of its Subsidiaries shall acquire (i) by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association partnership or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, except purchases of inventory and raw materials in the ordinary course of business (or as permitted by Section 7.1(g), whether or not material);
(f) neither it nor any of its Subsidiaries shall (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business), (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(g) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters);
(h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent and within the limits specified herein, purchase any property or assets of any other individual or entity;
(H) incur any obligations of any kind in excess of $100,000 in the aggregate in respect of the Business; or
(I) authorize or propose any of the foregoing, or enter into or modify any contract, agreement, commitment or arrangement to do any of the foregoing; and
(iii) the Vendors shall:
(A) use their commercially reasonable efforts to keep available the services of the Employees and to maintain their relations and goodwill with past practice)the suppliers, customers, distributors and any others having business relations with the Business; providedand
(B) immediately upon becoming aware of the existence of:
1. any notice from, however, that notwithstanding proceeding before or order of any governmental entity requiring it to comply with or take action under any Environmental Law,
2. any notice from a lender asserting a violation or breach of any loan covenant or any other provision of this Agreementany financing agreement, neither or
3. any state of affairs respecting the Company nor Leased Premises, Purchased Assets or Business which could reasonably be expected to give rise to future environmental liabilities, the imposition of any of its Subsidiaries shall enter into any settlement of fine, or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time shutting down of the settlement or compromise or at Business for any time period of time, notify the Purchasers in the future, materially increases the labor or operating costs writing and provide details of the Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measures;
(l) neither it nor any of its Subsidiaries shall make or rescind any material Tax election, amend any material Tax Return or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, in each case except in a manner consistent with past practice or as required by applicable Law;
(m) other than with respect to any actions permitted under Section 7.2, neither it nor any of its Subsidiaries shall take any action or omit to take any action that is reasonably likely to result taken in any of the conditions to the Merger set forth in Article VIII not being satisfied; and
(n) neither it nor any of its Subsidiaries will authorize any of, or commit, resolve or agree, in writing or otherwise, to take, any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operationsresponse.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless Parent Keystone shall 36 otherwise consent approve in writing, which consent approval shall not be unreasonably be withheldwithheld or delayed, and except as otherwise expressly contemplated by this Agreement Agreement, the Stock Option Agreement, the Company Disclosure Letter or as set forth in this Agreementrequired by applicable Law):
(ai) the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially all reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, strategic partners, creditors, lessors, employees and business associates;
(bii) it shall not (i) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (iiA) amend its certificate of incorporation or by-laws; (iiiB) other than in the case of wholly-owned subsidiaries, split, combine combine, subdivide or reclassify its outstanding shares of capital stock; (ivC) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, other than dividends from its direct or indirect wholly-owned Subsidiaries; or (vD) purchaserepurchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(ciii) neither it nor any of its Subsidiaries shall (iknowingly take any action that would prevent the merger from qualifying as a tax-free "reorganization" within the meaning of Section 368(a) issue, sell, pledge, dispose of the Code or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debt, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class, Rights, any Voting Debt or any other property or assets (other than shares of Company Common Stock and associated Rights issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans); or (ii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire or encumber any material property or material assets (including capital stock of that would cause any of its Subsidiaries) or businessrepresentations and warranties herein to become untrue in any material respect;
(div) neither it nor any of its Subsidiaries shall restructureterminate, recapitalizeestablish, reorganize adopt, enter into, make any new grants or completely or partially liquidate or adopt a plan of complete or partial liquidation awards under, amend or otherwise enter into modify, any agreement Compensation and Benefit Plans or arrangement imposing material changes Stock Plans or restrictions increase the salary, wage, bonus or other compensation of any directors, officers or employees or take any action which would result in an acceleration of benefits or vesting under the Stock Plans as a result of the consummation of the Merger which would not otherwise occur pursuant to the terms and conditions of such benefits or Stock Plan grants, awards or options as in effect on the operation of its assets or businesses or adopt resolutions providing for or authorizing any of the foregoingdate hereof;
(ev) neither it nor any of its Subsidiaries shall acquire issue any preferred stock or incur any indebtedness for borrowed money (i) by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, except purchases of inventory and raw materials than indebtedness in the ordinary course of business (consistent with past practice, indebtedness incurred solely for the purpose of funding the Escrow Account or as permitted by Section 7.1(gthe replacement or refinancing of existing short-term indebtedness), whether or not material);
(f) neither it nor any of its Subsidiaries shall (i) incur any indebtedness for borrowed money ; or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business), (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange ratesindebtedness;
(gvi) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in an aggregate amount in excess of $10 million per quarter the aggregate amount reflected in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if Company's capital expenditures in any quarter are less than $10 million, the shortfall shall be available expenditure budget heretofore delivered to the Company to spend in future quarters)Keystone;
(h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (ivii) except as otherwise requested by Parent pursuant to contemplated by
Section 7.11(c6.1 (a)(iv), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiateissue, settle deliver, sell, or compromise encumber shares of any litigation, claim, grievance, charge or proceeding involving any Intellectual Property class of its common stock or any other material litigationsecurities convertible into, claimor any rights, grievancewarrants or options to acquire, charge or proceeding (other than in connection with any such shares except the enforcement of option granted under the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); provided, however, that notwithstanding any other provision of this Stock Option Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places any material restrictions options and performance share programs outstanding on the ability of date hereof under the Company or any of its Subsidiaries Stock Plans, and shares issuable pursuant to impose any labor saving or other cost reduction measuressuch options and performance share programs;
(lviii) neither it nor any of its Subsidiaries shall make acquire any business, whether by merger, consolidation, purchase of property or rescind any material Tax election, amend any material Tax Return assets or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, in each case except in a manner consistent with past practice or as required by applicable Lawotherwise;
(mix) other than with respect to any actions permitted under Section 7.2, neither it nor any of its Subsidiaries shall take any action or omit to take any action that is reasonably likely to result in any of the conditions agree prior to the Merger set forth in Article VIII not being satisfied; and
(n) neither it nor any of its Subsidiaries will authorize any of, or commit, resolve or agree, in writing or otherwise, Effective Time to take, do any of the foregoing actions; providedafter the Effective Time.
(b) Keystone covenants and agrees as to itself and its Subsidiaries that, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct after the operations of the Company date hereof and prior to Closing. Prior to Closing, the Effective Time (unless the Company shall exerciseotherwise approve in writing, consistent with which approval shall not be unreasonably withheld or delayed, and except as otherwise expressly contemplated by this Agreement or in the terms and conditions Keystone Disclosure Letter or as required by applicable Law):
(i) the business of this Agreement, complete control and supervision of its it and its Subsidiaries’ operations.Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use all reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, creditors, lessors, employees and business associates;
(ii) it shall not (A) amend its certificate of incorporation or by-laws in any manner that would prohibit or hinder, impede or delay in any material respect the Merger or the consummation of the transactions contemplated hereby;
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless Parent shall otherwise consent approve in writing, which consent approval shall not be unreasonably be withheld, conditioned or delayed, and except as otherwise expressly contemplated by this Agreement or as set forth in this Agreement):
(ai) the business of it and its Subsidiaries shall be conducted in accordance with the Operating Budget, taken as a whole, and, to the extent consistent therewith, in the ordinary and usual course consistent with past practice and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable best efforts to preserve its business organization intact and maintain its existing relations and goodwill with all Governmental Entities (including, without limitation, the SEC), ETP Holders, OTP Holders, Current Company Related Persons, customers, suppliers, distributors, strategic partners, creditors, lessors, employees permit holders, Employees and business associates;
(bii) it shall not (iA) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its SubsidiariesSubsidiaries or any of the shares of Parent Common Stock by the Company or any of its direct or indirect subsidiaries; (iiB) except as set forth in Sections 2.1 and 5.1(c)(ii) of this Agreement, amend its certificate of incorporation or by-laws; (iiiC) other than in the case of wholly-owned subsidiaries, split, combine or reclassify its outstanding shares of capital stock; (ivD) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, stock other than dividends from its direct or indirect wholly-wholly owned Subsidiaries; or (vE) purchaserepurchase, redeem or otherwise acquire, except for in connection with the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock OptionsPlan, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(ciii) neither it nor any of its Subsidiaries shall (iA) issue, sell, pledge, dispose of or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debtof, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class, Rights, class or any Voting Debt or any other property or assets (other than shares of Company Common Stock and associated Rights Shares issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock PlansPlan); or (iiB) other than in the ordinary and usual course of business, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire of or encumber any material other property or material assets (including capital stock of any of its Subsidiaries) or businessincur or modify any material indebtedness or other liability; or (C) acquire any shares of Parent Common Stock;
(d) neither it nor any of its Subsidiaries shall restructure, recapitalize, reorganize or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the operation of its assets or businesses or adopt resolutions providing for or authorizing any of the foregoing;
(e) neither it nor any of its Subsidiaries shall acquire (i) by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, except purchases of inventory and raw materials in the ordinary course of business (or as permitted by Section 7.1(g), whether or not material);
(fiv) neither it nor any of its Subsidiaries shall (iA) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business)terminate, (ii) issueestablish, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person adopt or enter into any arrangement having the economic effect of any of the foregoingBenefit Plans, except as required under applicable Law, (iiiB) make any loansnew grants or awards under any Benefit Plans, advances (other than routine advances to employees except that the Company may reissue such Company Options and Company Restricted Stock which was issued and outstanding as of the date of this Agreement and which are subsequently cancelled prior to the Effective Time, in each case pursuant to the terms and conditions of the applicable Benefit Plan; or (C) or amend or otherwise modify any Benefit Plan or increase the salary, wage, bonus or other compensation of any employees, except in accordance with ordinary and usual course of business consistent with past practice and to the extent all such increases and all such present or future costs associated with such amendments or modifications (x) have been fully reserved against in the Company and its Subsidiaries Financial Statements or (y) are in accordance with the Operating Budget;
(v) except in the ordinary and usual course of business) business consistent with past practice or capital contributions toas fully reserved in the Operating Budget, or investment in, any other Person, other than the Company or neither it nor any of its direct Subsidiaries shall settle or indirect wholly owned Subsidiariescompromise any material claims or litigation or modify, amend or (iv) other than in the ordinary course terminate any of businessits material Contracts or waive, enter into release or assign any hedging agreement material rights or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange ratesclaims;
(gvi) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters);
(h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measures;
(l) neither it nor any of its Subsidiaries shall make or rescind any material Tax election, amend any material Tax Return election or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminatedterminated except in the ordinary and usual course of business;
(vii) it shall and shall cause its Subsidiaries to, (i) timely make all filings with the SEC and any other Governmental Entity required to maintain PCX’s status as a national securities exchange and as a self-regulatory organization (as registered under Section 6 and as defined in Section 3(a)(26), respectively, of the Exchange Act) and to keep it and all of its Subsidiaries in compliance in all material respects with all Laws, (ii) keep PCX Equities and all of its Subsidiaries in compliance in all material respects with all Laws and PCX rules and (iii) cause PCX and its Subsidiaries to fulfill, in each all material respects, its regulatory oversight functions over the ArcaEx Business in PCX’s capacity as a national securities exchange and self-regulatory organization (as registered under Section 6 and as defined in Section 3(a)(26), respectively, of the Exchange Act);
(viii) neither it nor any of its Subsidiaries (A) shall permit any change in its credit practices or accounting principles, policies or practice (including, without limitation, any of its practices with respect to accounts receivable or accounts payable), except to the extent that any such changes in accounting principles, policies or practices shall be required by changes in GAAP and (B) shall pay, collect or accrue, as the case except may be, the consolidated accounts receivable and accounts payable of the Company, for the period following the Calculation Month-End, other than in a manner the ordinary and usual course of business consistent with past practice or as required by applicable Lawpractice;
(mix) other than with respect to neither it nor any of its Subsidiaries shall take any actions permitted under that, if taken prior to the date hereof, would constitute or result in a breach of Section 7.2, 5.1(i);
(x) neither it nor any of its Subsidiaries shall take any action or omit to take any action that is reasonably likely would cause any of its representations and warranties herein to result become untrue in any of the conditions to the Merger set forth in Article VIII not being satisfiedmaterial respect at any time; and
(nxi) neither it nor any of its Subsidiaries will authorize any of, or commit, resolve or agree, in writing or otherwise, enter into an agreement to take, do any of the foregoing actionsforegoing.
(b) If the Closing Date shall not have occurred by March 31, 2005, and the Company shall thereafter determine that additional funding is necessary in order for it to maintain a positive cash balance, Parent, within five business days of any written request therefor from the Company, will advance to the Company by wire transfer of immediately available funds to a bank account designated by the Company, the requested amount to support the Company and its Subsidiaries operations; providedprovided that the aggregate amount of such advances outstanding at any time (after giving effect to all outstanding requests therefor from the Company) shall not be required to exceed $10,000,000, howeverunless Parent shall consent in writing to a larger amount. Such advances may be repaid at any time at the option of the Company. Such advances: (i) for the avoidance of doubt, shall constitute a “Total Adjusted Liability” of the Company for purposes of the Calculation and the Final Working Capital Amount and for any other purpose required by GAAP or applicable Law, until repaid in accordance with the terms of this Agreement and the terms of any other customary evidence of indebtedness Parent may request that nothing contained in the Company and any of its Subsidiaries execute and deliver to it as a condition to Parent making such advances (which the Company shall, and shall cause its Subsidiaries to, execute and deliver to Parent prior to Parent becoming obligated to make any such advances pursuant to the terms of this Agreement); and (ii) shall not bear interest, and unless repaid by the Company, shall remain outstanding for so long as this Agreement shall give to Parentremain in effect and the Effective Time shall not have occurred. If this Agreement is terminated and the Effective Time shall not have occurred, directly such advances shall bear interest and be repaid in accordance with Section 8.5(a) of this Agreement.
(c) Except for any resignation, retirements, dismissals or indirectly, rights to control or direct the operations of reductions in-force announced by the Company prior to Closing. Prior to Closingthe date hereof, in the event that the Company shall exerciseimplement any reductions in-force prior to the Effective Time, consistent with Parent shall, on demand, reimburse the terms Company for any severance costs associated therewith; provided that the Company shall provide Parent reasonable prior notice of, and conditions of this AgreementParent shall have the right to veto, complete control and supervision of its and its Subsidiaries’ operationsany such reductions.
Appears in 1 contract
Samples: Agreement and Plan of Merger (Archipelago Holdings Inc)
Interim Operations. The Pursuant to the Merger Agreement, the Company covenants and agrees as to itself and its Subsidiaries has agreed that, after except as expressly contemplated or provided by the date hereof and Merger Agreement or agreed to in writing by Honeywell, prior to the Effective Time time the directors of the Purchaser constitute a majority of the Company Board (unless Parent shall otherwise consent in writingthe "Board Appointment Date"), which consent shall not unreasonably be withheld, and except as otherwise expressly contemplated by this Agreement or as set forth in this Agreement):
(a) the business of it the Company and its Subsidiaries shall subsidiaries will be conducted only in the ordinary and usual course and, and to the extent consistent therewith, it each of the Company and its Subsidiaries shall subsidiaries will use their respective commercially its best reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributorsemployees, strategic creditors and business partners, creditorsand (a) the Company will not, lessorsdirectly or indirectly, employees (i) issue, sell, transfer or pledge or agree to sell, transfer or pledge any treasury stock of the Company or any capital stock of any of its subsidiaries beneficially owned by it, except upon the exercise of employee stock options or other rights to purchase shares of Common Stock pursuant to the ESPP outstanding on January 26, 1997; (ii) amend its certificate of incorporation or 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; and business associates;
(b) it neither the Company nor any of its subsidiaries shall not (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock 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 capital stock owned by it in any of its Subsidiaries; (ii) amend its certificate of incorporation or by-laws; (iii) other than in the case of wholly-owned subsidiaries, split, combine or reclassify its outstanding additional shares of capital stock; (iv) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, other than dividends from its direct or indirect wholly-owned Subsidiaries; or (v) purchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Optionsof, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(c) neither it nor any of its Subsidiaries shall (i) issue, sell, pledge, dispose of or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debt, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any classclass of the Company or its subsidiaries, Rights, any Voting Debt or any other property or assets (other than shares reserved for issuance on January 26, 1997 pursuant to the exercise of Company Common Stock and associated Rights issuable pursuant to options and other stock-based awards Options outstanding on the date hereof under the Company Stock Plans)January 26, 1997; or (iiiii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire or encumber any material property assets other than in the ordinary and usual course of business and consistent with past practice, or material assets incur or modify any indebtedness or other liability, other than in the ordinary and usual course of business and consistent with past practice; (including capital stock of iv) redeem, purchase or otherwise acquire directly or indirectly any of its Subsidiariescapital stock; (v) grant any increase in the compensation payable or business;
(d) neither it nor to become payable by the Company or any of its Subsidiaries shall restructure, recapitalize, reorganize or completely or partially liquidate subsidiaries to any of its executive officers or adopt a plan of complete any new or partial liquidation 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; (vi) enter into any employment or severance agreement or arrangement imposing material changes or restrictions on with or, except in accordance with the operation of its assets or businesses or adopt resolutions providing for or authorizing any existing written policies of the foregoing;
(e) neither it nor Company, grant any of its Subsidiaries shall acquire (i) by merging severance or consolidating withtermination pay to any officer, director or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, except purchases of inventory and raw materials in the ordinary course of business (or as permitted by Section 7.1(g), whether or not material);
(f) neither it nor any of its Subsidiaries shall (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business), (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities employee of the Company or any of its Subsidiariessubsidiaries; (vii) permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to Honeywell, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries except in the ordinary course of businessbusiness and consistent with past practice; (viii) enter into any contract or capital contributions to, or investment in, any other Person, other than transaction relating to the Company or any purchase of its direct or indirect wholly owned Subsidiaries, or (iv) assets other than in the ordinary course of businessbusiness consistent with prior practices; (ix) change any of the accounting methods used by it unless required by generally accepted accounting principles ("GAAP"), enter into any hedging agreement or other financial agreement or arrangement designed to protect neither the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(g) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters);
(h) neither it nor any of its Subsidiaries subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, tax election except in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign change any material rights or claims undertax election already made, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign adopt any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, tax accounting method except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than 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; provided, however, that notwithstanding or (x) take any other provision action with the intent of this causing any of the conditions to the Offer set forth in Annex A to the Merger Agreement to not be satisfied. No Solicitation. Pursuant to the Merger Agreement, the Company has agreed that neither the Company nor any of its Subsidiaries shall enter into subsidiaries will (and the Company will use its best efforts to cause its officers, directors, employees, representatives and agents, including, but not limited to, investment bankers, attorneys and accountants, not to), directly or indirectly, encourage, solicit, participate in or initiate discussions or negotiations with, or provide any settlement information to, any corporation, partnership, person or other entity or group (other than Honeywell, any of its affiliates or compromise representatives) concerning any litigation, claim, grievance, charge proposal or proceeding that, whether at the time offer to acquire all or a substantial part of the settlement or compromise or at any time in the future, materially increases the labor or operating costs business and properties of the Company or any of its Subsidiaries subsidiaries or places any material restrictions on the ability capital stock of the Company or any of its Subsidiaries subsidiaries, whether by merger, tender offer, exchange offer, sale of assets or similar transactions involving the Company or any subsidiary, division or operating or principal business unit of the Company (an "Acquisition Proposal"), except that the Company and the Company Board are not 20 23 prohibited from (i) taking and disclosing to impose any labor saving the Company's stockholders a position with respect to a tender or other cost reduction measures;
exchange offer by a third party pursuant to Rules 14d-9 and 14e-2 promulgated under the Exchange Act, or (lii) neither it nor any of its Subsidiaries shall make or rescind any material Tax election, amend any material Tax Return or permit any insurance policy naming it as a beneficiary or loss-payable payee making such disclosure to be cancelled or terminatedthe Company's stockholders as, in each case the good faith judgment of the Board, after receiving advice from outside counsel, is required under applicable law, provided that the Company may not, except in a manner consistent as described below, withdraw or modify, or propose to withdraw or modify, its position with past practice respect to the Offer or as required by applicable Law;
(m) other than the Merger or approve or recommend, or propose to approve or recommend, any Acquisition Proposal, or enter into any agreement with respect to any actions permitted under Section 7.2Acquisition Proposal. The Company also agreed to immediately cease any existing activities, neither it nor discussions or negotiations with any parties conducted prior to the date of its Subsidiaries shall take any action or omit the Merger Agreement with respect to take any action that is reasonably likely to result in any of the foregoing. The Merger Agreement provides that the Company, prior to the acceptance of Shares pursuant to the Offer, may furnish information concerning the Company and its subsidiaries to any corporation, partnership, person or other entity or group pursuant to appropriate confidentiality agreements, and may negotiate and participate in discussions and negotiations with such entity or group concerning an Acquisition Proposal if (i) such entity or group has on an unsolicited basis submitted a bona fide written proposal to the Company relating to any such transaction which the Company Board determines in good faith, after consulting with a nationally recognized investment banking firm, represents a superior transaction to the Offer and the Merger and (ii) in the opinion of the Company Board, only after receipt of advice from outside legal counsel, the failure to provide such information or access or to engage in such discussions or negotiations could reasonably be expected to cause the Company Board to violate its fiduciary duties to the Company's stockholders under applicable law (an Acquisition Proposal which satisfies clauses (i) and (ii) is referred to in the Merger Agreement as a "Superior Proposal"). The Company will within two business days following receipt of a Superior Proposal notify Honeywell of the receipt of the same. The Company will promptly provide to Honeywell any material non-public information regarding the Company provided to any other party which was not previously provided to Honeywell. At any time after two business days following notification to Honeywell of its intent to do so (which notification shall include the identity of the bidder and the material terms and conditions of the proposal) and if permitted to do so pursuant to the terms of the Merger Agreement, the Company Board may withdraw or modify its approval or recommendation of the Offer and may enter into an agreement with respect to a Superior Proposal, provided it shall concurrently with entering into such agreement pay or cause to be paid to Honeywell the Termination Fee (as defined below) plus any amount payable at the time for reimbursement of expenses pursuant to the Merger set forth in Article VIII not being satisfied; and
(n) neither it nor any Agreement. If the Company has notified Honeywell of its Subsidiaries will authorize intent to enter into an agreement with respect to a Superior Proposal in compliance with the preceding sentence and has otherwise complied with such sentence, the Company may enter into an agreement with respect to such Superior Proposal (with the bidder and on terms no less favorable than those specified in such notification) after the expiration of the initial two business day period without any offurther notification. Indemnification and Insurance. Pursuant to the Merger Agreement, for six years after the Effective Time, the Surviving Corporation (or commitany successor to the Surviving Corporation) shall indemnify, resolve or agree, in writing or otherwise, to take, defend and hold harmless the present and former officers and directors of the Company and its subsidiaries and persons who become any of the foregoing actions; providedforgoing prior to the Effective Time with respect to matters occurring at or prior to the Effective Time to the full extent required under Delaware law, howeverthe terms of the Company's Certificate of Incorporation or the By-laws, that nothing contained as in this Agreement shall give to Parenteffect as of January 26, directly or indirectly1997 and, rights to control or direct the operations terms of any indemnification agreement entered into with the Company prior to ClosingJanuary 26, 1997. Prior The Merger Agreement also provides that Honeywell or the Surviving Corporation will maintain the Company's existing officers' and directors' liability insurance ("D&O Insurance") for a period of not less than six years after the Effective Time, provided, that Honeywell may substitute therefor policies of substantially equivalent coverage and amounts containing terms no less favorable to Closingsuch former directors or officers. Honexxxxx xxx also agreed that if the existing D&O Insurance expires, is terminated or cancelled during such period, Honeywell or the Company shall exerciseSurviving Corporation will use all reasonable efforts to obtain substantially similar D&O Insurance, consistent with but in no event will it be required to pay aggregate premiums for such insurance in excess of 150% of the terms and conditions aggregate premiums paid in 1996 on an annualized basis for such purpose (the "1996 Premium"). If Honeywell or the Surviving Corporation is unable to obtain the amount of this AgreementD&O Insurance required for such aggregate premium, complete control and supervision Honeywell or the Surviving Corporation has agreed to obtain as much insurance as can be obtained for an annual premium not in excess of its and its Subsidiaries’ operations150% of the 1996 Premium.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, that after the date hereof and prior to the Effective Time (unless Parent shall otherwise consent in writingapprove, which consent approval shall not be unreasonably be withheldwithheld or delayed, and except as otherwise expressly contemplated by this Agreement or as set forth in this Agreement):
(ai) the business of it the Company and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially best reasonable efforts to (A) preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, strategic partners, creditors, lessors, employees and business associatesassociates and (B) maintain and keep material properties and assets in as good repair and condition as such are in as of the date hereof, subject to ordinary wear and tear;
(bii) it the Company shall not (iA) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (iiB) amend its certificate articles of incorporation or by-lawslaws or amend, modify or terminate the Rights Agreement; (iiiC) other than in the case of wholly-owned subsidiaries, split, combine combine, subdivide or reclassify its outstanding shares of capital stock; (ivD) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, stock (other than dividends from its direct or indirect wholly-wholly owned Subsidiaries and other than regular quarterly cash dividends not in excess of $0.255 per Share and regular quarterly cash dividends on the preferred and preference stock of its Subsidiaries); or (vE) purchaserepurchase, redeem or otherwise acquire, acquire (except for (I) mandatory sinking funds obligations existing on the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options date hereof and (II) open market repurchases pursuant to the extent required or permitted under the terms of such Company the Company's Direct Stock OptionsPurchase Plan and Dividend Reinvestment Plan), or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(ciii) neither it the Company nor any of its Subsidiaries shall (iA) issue, sell, pledge, dispose of or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debtof, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class, Rights, any Voting Debt class or any other property or assets (other than shares of Company Common Stock and associated Rights (I) Shares issuable pursuant to options and other stock-based awards rights outstanding on the date hereof under the Company Stock Plans, issuances of additional options or rights to acquire Shares granted pursuant to the terms of the Stock Plans as in effect on the date hereof in the ordinary and usual course of the operation of such Stock Plans and issuances of Shares pursuant to options granted after the date hereof pursuant to the Stock Plans and (II) Shares issuable pursuant to the terms of the outstanding Feline Prides); or (iiB) (I) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire of or encumber any material of its coal fines property or material assets assets, or, (including capital stock of any of its SubsidiariesII) or business;
(dexcept as identified on Section 6.1(a)(iii) neither it nor any of its Subsidiaries shall restructure, recapitalize, reorganize or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the operation of its assets or businesses or adopt resolutions providing for or authorizing any of the foregoing;
(e) neither it nor any of its Subsidiaries shall acquire (i) by merging or consolidating withCompany Disclosure Letter, or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, except purchases of inventory and raw materials than in the ordinary and usual course of business (or as permitted by Section 7.1(g), whether or not material);
(f) neither it nor any of its Subsidiaries shall (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (and other than sales not in excess of $100,000,000 in the aggregate or $30,000,000 in respect of any transaction or series of related transactions, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber any other property or assets; (C) make or authorize or commit for any capital expenditures or operation and maintenance expenditures in excess of 110% of those contemplated to be spent pursuant to the Credit Agreement year 1999, 2000 or 2001 capital appropriations/spending budgets set forth in the ordinary course of business), (iiSection 6.1(a) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company Disclosure Letter; or (D) by any of its Subsidiariesmeans, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions toacquisition of, or investment in, assets or stock of, or other interest in, any other Person, other than the Company Person or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(g) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment entity in excess of $10 million per quarter 100,000,000 in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures or $30,000,000 in respect of any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters)transaction or series of related transactions;
(h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on in Section 7.1(j6.1(a)(iv) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect theretoLetter, neither the Company nor any of its Subsidiaries shall initiate(A) incur, settle assume or compromise prepay any litigation, claim, grievance, charge long-term debt or proceeding involving incur or assume any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and short-term debt other than in the ordinary and usual course of business in amounts and for purposes consistent with past practice under existing lines of credit, and except for the incurrence of long-term indebtedness in connection with the refinancing of existing indebtedness either at its stated maturity or at a lower cost of funds, (B) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any third-party, including by means of any "keep well" or other agreement to support or maintain any financial statement condition of another person, except in the ordinary and usual course of business, (C) accelerate or delay collection of notes or accounts receivable in advance of or beyond their regular due dates or the dates consistent with past practice); provided, howeveror (D) change any accounting principle, practice or method in a manner that notwithstanding is inconsistent with past practice, except to the extent required by U.S. GAAP as advised by the Company's regular independent accountants;
(v) neither the Company nor any of its Subsidiaries shall take or fail to take any action that is reasonably likely to make any representation or warranty of the Company contained herein inaccurate in any material respect at, or as of any time prior to, the Effective Time, or that is, individually or in the aggregate, reasonably likely to have a Material Adverse Effect;
(vi) except as required by applicable Law, an existing collective bargaining agreement or other provision Contract identified in Section 6.1(a)(vi) of this Agreementthe Company Disclosure Letter, neither the Company nor any of its Subsidiaries shall terminate, establish, adopt, enter into into, make any settlement new grants or awards under, amend or otherwise modify, any Compensation and Benefit Plans (other than issuances of additional options, performance shares or compromise any litigation, claim, grievance, charge or proceeding that, whether at rights to acquire Shares granted pursuant to the time terms of the settlement or compromise or at any time Stock Plans as in effect on the date hereof in the futureordinary and usual course of the operation of such Stock Plans, materially provided, that any such additional options, performance shares or rights to acquire Shares shall not vest in connection with the Merger and the other transactions contemplated by this Agreement), or except as required by any existing contract with a non-officer employer increase the salary, wage, bonus or other compensation of any employees, except increases occurring in the labor ordinary and usual course of business (which shall include normal periodic performance reviews and related compensation and benefit increases);
(vii) except as required by applicable law, an existing collective bargaining agreement or operating costs other Contract identified in Section 6.1(a)(vii) of the Company or Disclosure Letter, neither the Company nor any of its Subsidiaries shall grant any severance or places termination pay to, or enter into any material restrictions on employment or severance agreement with any director or officer of it or such Subsidiaries, provided, that the ability foregoing shall not require the Company to violate any of its obligations existing prior to the date hereof as set forth in Section 5.1(h) of the Company or Disclosure Letter;
(viii) neither the Company nor any of its Subsidiaries to impose shall settle or compromise any labor saving material claims or other cost reduction measureslitigation or amend or terminate any of its material Contracts or waive, release or assign any material rights or claims;
(lix) neither it the Company nor any of its Subsidiaries shall make or rescind any material Tax election, amend any material Tax Return election (other than in the ordinary and usual course or as is required by Law) or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled canceled or terminatedterminated except in the ordinary and usual course of business; and
(x) neither the Company nor any of its Subsidiaries will authorize or enter into an agreement to do any of the foregoing.
(b) Parent covenants and agrees as to itself and its Subsidiaries that after the date hereof and prior to the Effective Time (unless the Company shall otherwise approve, which approval shall not be unreasonably withheld or delayed, and except as otherwise expressly contemplated by this Agreement):
(i) the business of Parent and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective best reasonable efforts to (A) preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, creditors, lessors, employees and business associates and (B) maintain and keep material properties and assets in as good repair and condition as such are in as of the date hereof, subject to ordinary wear and tear;
(ii) it shall not (A) amend its articles of incorporation or by-laws; (B) split, combine, subdivide or reclassify its outstanding shares of capital stock; (C) declare, set aside or pay any dividend payable, in each case cash, stock or property in respect of any capital stock, other than dividends from its direct or indirect wholly owned Subsidiaries and other than regularly quarterly cash dividends not in excess of $0.515 per share of Parent Common Stock and regularly quarterly cash dividends on the preferred and preference stock of its Subsidiaries; (D) repurchase, redeem or otherwise acquire, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of Parent Common Stock or any securities convertible into or exchangeable or exercisable for any shares of Parent Common Stock (other than repurchases, redemptions or other acquisitions which are made at the then-prevailing market price of Parent Common Stock on the NYSE and which in the aggregate do not exceed ten percent of the shares of Parent Common Stock outstanding as of the date hereof) or (E) except as permitted under this Agreement, enter into any agreement with respect to a merger, reorganization, share exchange, consolidation or similar transaction involving, or any purchase of all or substantially all of the equity securities of it or any of its Significant Subsidiaries (as such term is defined in Rule 1-02 of Regulation S-X under the Exchange Act);
(iii) neither Parent nor any of its Subsidiaries shall, (A) issue, sell, pledge, dispose of or encumber any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of Parent Common Stock (other than (I) shares of Parent Common Stock issuable pursuant to options outstanding on the date hereof under the Parent Stock Plan, issuances of additional options or rights to acquire shares of Parent Common Stock granted pursuant to the terms of the Parent Stock Plan as in effect on the date hereof in the ordinary and usual course of the operation of such Parent Stock Plan and issuances of shares of Parent Common Stock pursuant to options granted after the date hereof pursuant to the Parent Stock Plan and (II) issuances of Parent Common Stock, or securities convertible with or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, shares of Parent Common Stock, to a third-party on arms-length terms not in excess of 20% of the number of shares of Parent Common Stock outstanding as of the date hereof), (B) other than pursuant to the year 1999, 2000 or 2001 capital appropriations/ spending budgets set forth in Section 6.1(b) of the Parent Disclosure Letter and other than in the ordinary and usual course of business (I) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber any property or assets, and other than sales not in excess of $250,000,000 in the aggregate; or (II) by any means, make any acquisition of, or investment in, assets or stock of, or other interest in, any other Person or entity in excess of $250,000,000 in the aggregate or (C) acquire "Beneficial Ownership" (as such term is defined in the Rights Agreement) of any Shares;
(iv) Parent shall not change any material accounting principle, practice or method in a manner consistent that is inconsistent with past practice or as practice, except to the extent required by applicable LawU.S. GAAP as advised by Parent's regular independent accountants;
(mv) other than with respect to any actions permitted under Section 7.2, neither it Parent nor any of its Subsidiaries shall take any action or omit fail to take any action that is reasonably likely to result make any representation or warranty of such party contained herein inaccurate in any material respect at, or as of any time prior to, the conditions Effective Time, or that is, individually or in the aggregate, reasonably likely to the Merger set forth in Article VIII not being satisfiedhave a Material Adverse Effect; and
(nvi) neither it Parent nor any of its Subsidiaries will authorize any of, or commit, resolve or agree, in writing or otherwise, enter into an agreement to take, do any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operationsforegoing.
Appears in 1 contract
Interim Operations. The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless Parent shall otherwise consent approve in writing, which consent shall not unreasonably be withheld, writing and except as otherwise expressly contemplated by this Agreement or as set forth in this Agreement):
(a) the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable best efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, strategic partners, creditors, lessors, employees and business associates;
(b) it shall not (i) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (ii) amend its certificate of incorporation or by-lawsbylaws; (iii) other than in the case of wholly-owned subsidiaries, split, combine or reclassify its outstanding shares of capital stock; (iv) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, other than dividends from its direct or indirect wholly-owned Subsidiaries; or (v) purchaserepurchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(c) neither it nor any of its Subsidiaries shall (i) issue, sell, pledge, dispose of or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debtof, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class, Rights, class or any Voting Debt or any other property or assets (other than shares than, in the case of Company Common Stock and associated Rights the Company, Shares issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans); or (ii) other than in the ordinary and usual course of business, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire of or encumber any material other property or material assets (including capital stock of any of its Subsidiaries) or incur or modify any material indebtedness or other liability; (iii) make or authorize or commit for any capital expenditures other than in the ordinary and usual course of business; or (iv) by any means, make any acquisition of, or investment in, assets or stock of or other interest in, any other Person or entity;
(d) neither it nor any of its Subsidiaries shall restructure(i) terminate, recapitalizeestablish, reorganize adopt, enter into, make any new grants or completely or partially liquidate or adopt a plan of complete or partial liquidation awards under, amend or otherwise modify, any Compensation and Benefit Plans or increase the salary, wage, bonus or other compensation of any employees except (x) increases occurring in the ordinary and usual course of business (which shall include normal periodic performance reviews and related compensation and benefit increases) or (y) actions taken pursuant to Section 7.7, (ii) amend any existing, or enter into any agreement or arrangement imposing material changes or restrictions on the operation of its assets or businesses or adopt resolutions providing for or authorizing any new, employment agreements with employees of the foregoingCompany or its Subsidiary or (iii) take any action that would cause an acceleration of any employee rights under any Compensation and Benefit Plan, including but not limited to any vesting of stock options prior to the Effective Time;
(e) neither it nor any of its Subsidiaries shall acquire (i) by merging file, settle or consolidating withcompromise any material claims or litigation or, or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or except in the aggregateordinary and usual course of business, to the Company and modify, amend or terminate any of its Subsidiariesmaterial Contracts or waive, taken as a whole, except purchases of inventory and raw materials in the ordinary course of business (release or as permitted by Section 7.1(g), whether assign any material rights or not material)claims;
(f) neither it nor any of its Subsidiaries shall (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business), (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(g) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters);
(h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measures;
(l) neither it nor any of its Subsidiaries shall make or rescind any material Tax election, amend any material Tax Return election or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, in each case terminated except in a manner consistent with past practice or as required by applicable Lawthe ordinary and usual course of business;
(mg) other than with respect to any actions permitted under Section 7.2, neither it nor any of its Subsidiaries shall take any action or omit to take any action that is reasonably likely would cause any of its representations and warranties herein to result become untrue in any of the conditions to the Merger set forth in Article VIII not being satisfiedmaterial respect; and
(nh) neither it nor any of its Subsidiaries will authorize any of, or commit, resolve or agree, in writing or otherwise, enter into an agreement to take, do any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operationsforegoing.
Appears in 1 contract
Interim Operations. The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless Parent shall otherwise consent in writing, which consent shall not unreasonably be withheld, and except Except as otherwise expressly contemplated by this Agreement or as set forth in SECTION 6.01 of the Company Disclosure Schedule or as consented to in writing by Parent, the Company covenants and agrees that during the period from the date of this AgreementAgreement to the Effective Time (or until termination of this Agreement in accordance with ARTICLE 8 hereof):
(a) the business and operations of it the Company and its Subsidiaries shall be conducted only in the ordinary course of business and usual course and, to the extent consistent therewith, it Company and its Subsidiaries shall use their respective commercially reasonable best efforts to preserve its intact their current business organization intact organizations, keep available the services of their current officers and maintain its existing relations employees and goodwill preserve their relationships with their material customers, suppliers, distributorslicensors, strategic partnerslicensees, creditorsadvertisers, lessors, employees distributors and other material third parties having business associatesdealings with them and to preserve the goodwill of their respective businesses;
(b) it the Company shall not (i) authorize for issuance, issue, selldeliver, pledgesell or agree or commit to issue, dispose sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock owned by it in or the capital stock of any of its Subsidiaries; , any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including without limitation stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof or (ii) amend its certificate of incorporation or by-laws; (iii) other than in the case of wholly-owned subsidiaries, split, combine or reclassify its outstanding shares of capital stock; (iv) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, other than dividends from its direct or indirect wholly-owned Subsidiaries; or (v) purchaserepurchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, or permit any of its Subsidiaries to purchase repurchase, redeem or otherwise acquire, any shares of its capital stock or any securities convertible into other equity interests of the Company or exchangeable or exercisable for any shares of its capital stock;
(c) neither it nor any of its Subsidiaries shall (i) issueincluding, sellwithout limitation, pledge, dispose of or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debt, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its Subsidiaries);
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its charter, articles of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, bylaws or equivalent organizational documents or (iii) split, combine or reclassify any shares of its capital stock of any classstock, Rights, any Voting Debt or any other property or assets (other than shares of Company Common Stock and associated Rights issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans); or (ii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire or encumber any material property or material assets (including capital stock of shall not permit any of its Subsidiaries) Subsidiaries to split, combine or businessreclassify any shares of its capital stock;
(d) neither it nor the Company shall not, and shall not permit any of its Subsidiaries shall restructureto, recapitalizedeclare, reorganize set aside or completely pay any dividends on (whether in cash, stock or partially liquidate other property), or adopt a plan of complete or partial liquidation or otherwise enter into make any agreement or arrangement imposing material changes or restrictions on the operation other distributions in respect of, any of its assets capital stock (except for dividends paid by direct or businesses indirect wholly owned Subsidiaries to the Company or adopt resolutions providing for or authorizing any to other wholly owned Subsidiaries of the foregoingCompany consistent with past practices);
(e) neither it nor any of its Subsidiaries shall acquire (i) by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, except purchases of inventory and raw materials in the ordinary course of business (or as permitted by Section 7.1(g), whether or not material);
(f) neither it nor any of its Subsidiaries shall (i) incur grant or agree to any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business), (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(g) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters);
(h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect manner the compensation or fringe benefits of, or pay any bonus to, any current or former director, officer, officer or employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); providedpractice of less than 10% of each such individual's salary for non-officer employees, howeverincreases and bonuses expressly contemplated by or required under existing employment agreements, that notwithstanding any bonus plans and other provision agreements and arrangements listed or described in SECTION 6.01(E) of this Agreement, neither the Company nor any Disclosure Schedule and except in connection with accelerating the vesting schedules of its Subsidiaries shall the Options and terminating the Options and the Stock Plans, (ii) enter into any settlement of new or compromise materially amend any litigationexisting employment, claimconsulting, grievanceseverance, charge termination, change-of-control or proceeding thatindemnification agreement with any current or former director, whether at the time officer or employee of the settlement or compromise or at any time Company, (iii) except as set forth in the future, materially increases the labor or operating costs SECTION 6.01(E) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measures;
(l) neither it nor any of its Subsidiaries shall make or rescind any material Tax election, amend any material Tax Return or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, in each case except in a manner consistent with past practice or as required by applicable Law;
(m) other than with respect to any actions permitted under Section 7.2, neither it nor any of its Subsidiaries shall take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VIII not being satisfied; and
(n) neither it nor any of its Subsidiaries will authorize any of, or commit, resolve or agree, in writing or otherwise, to take, any of the foregoing actions; provided, however, that nothing contained otherwise contemplated in this Agreement shall give (including, without limitation, SECTION 3.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend, modify or terminate any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereof or (iv) except as may be required to Parentcomply with applicable Law and except as provided or otherwise contemplated in this Agreement (including, directly or indirectlywithout limitation, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operations.SECTION 40
Appears in 1 contract
Samples: Acquisition Agreement (Prentice Capital Management, LP)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless Parent shall otherwise consent in writing, writing (which consent shall not be unreasonably be withheld, withheld or delayed) and except as otherwise expressly contemplated by this Agreement or as set forth in this Agreement):
(ai) the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, strategic partners, creditors, lessors, employees and business associates;
(bii) it shall not (iA) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (iiB) amend its certificate of incorporation Organizational Documents or by-lawsamend, modify or terminate the Rights Agreement; (iiiC) other than in the case of wholly-any direct or indirect wholly owned subsidiariesSubsidiary, split, combine or reclassify its outstanding shares of capital stock; (ivD) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, stock other than dividends from its direct or indirect wholly-A-24 wholly owned SubsidiariesSubsidiaries and other than regular quarterly cash dividends not in excess of $0.165 per Share; or (vE) purchaserepurchase, redeem or otherwise acquire, except for in connection with the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock OptionsPlans, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(ciii) neither it nor any of its Subsidiaries shall (iA) issue, sell, pledge, dispose of or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debtof, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class, Rights, class or any Voting Debt or any other property or assets (other than shares of Company Common Stock and associated Rights Shares issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans)) except as set forth in Section 6.1(a)(iii) of the Company Disclosure Schedule; (B) other than as set forth on Section 6.1(a)(iii)(B) of the Company Disclosure Schedule, products sold to customers in the ordinary and usual course of business (without limitation as to dollar amount) or (ii) otherwise in the ordinary and usual course of business and not in an aggregate amount of more than $5,000,000, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire of or encumber any material other property or material assets (including capital stock of any of its Subsidiaries); (C) incur or businessmodify any indebtedness other than tax-exempt indebtedness, indebtedness existing solely between the Company and its wholly owned Subsidiaries or between such wholly owned Subsidiaries or indebtedness in an aggregate amount less than $2,000,000; provided that prior to incurring any indebtedness, if practicable, the Company shall provide Parent with a reasonable right of consultation prior to incurring any such indebtedness; provided, further, that the foregoing right of consultation shall not apply in the case of indebtedness in respect of letters of credit, guarantees or performance bonds or indebtedness existing solely between the Company and its wholly owned Subsidiaries or between such wholly owned Subsidiaries; (D) make or authorize or commit for any capital expenditures other than as set forth on Schedule 6.1(a)(iii) of the Company Disclosure Schedule or which, individually, is in excess of $1,000,000 or, in the aggregate, are in excess of $5,000,000; provided that prior to making any expenditure not set forth on Schedule 6.1(a)(iii) of the Company Disclosure Schedule, if practicable, the Company shall provide Parent with a reasonable right of consultation prior to making any such expenditure; and (E) by any means, make any acquisition of, or investment in (i) stock of or other interest in, any other Person or (ii) except in the ordinary and usual course of business consistent with past practice, assets of any other Person;
(div) except as set forth in Section 6.1(a)(iv) of the Company Disclosure Schedule, or as required by the terms of this Agreement, neither it nor any of its Subsidiaries shall (A) terminate, establish, adopt, enter into, make any new grants or awards under, amend or otherwise modify, any Compensation and Benefit Plans except as required by law, (B) other than in the ordinary and usual course of business consistent with past practice and the Company's compensation budget with respect to employees at a compensation level of less than $80,000 a year, increase the compensation of any employee, (C) hire any employee at a compensation level expected to be more than $100,000 a year;
(v) neither it nor any of its Subsidiaries shall restructuresettle or compromise any material claims or litigation or, recapitalizeexcept in the ordinary and usual course of business modify, reorganize amend or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into terminate any agreement or arrangement imposing material changes or restrictions on the operation of its assets material Contracts or businesses waive, release or adopt resolutions providing for assign any material rights or authorizing any of the foregoingclaims;
(e) neither it nor any of its Subsidiaries shall acquire (i) by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, except purchases of inventory and raw materials in the ordinary course of business (or as permitted by Section 7.1(g), whether or not material);
(f) neither it nor any of its Subsidiaries shall (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business), (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(g) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters);
(hvi) neither it nor any of its Subsidiaries shall make any material changes Tax election or file any material income Tax Refund or implement or adopt any change in its accounting methods, principles or material accounting practices, except insofar in all cases other than as may have been be required by a change in GAAP applicable Laws or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserveby GAAP;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measures;
(l) neither it nor any of its Subsidiaries shall make or rescind any material Tax election, amend any material Tax Return or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, in each case except in a manner consistent with past practice or as required by applicable Law;
(m) other than with respect to any actions permitted under Section 7.2, neither it nor any of its Subsidiaries shall take any action or omit to take any action that is it reasonably likely expects would cause any of its representations and warranties herein to result become untrue in any of the conditions to the Merger set forth in Article VIII not being satisfiedmaterial respect; and
(nviii) neither it nor any of its Subsidiaries will authorize or enter into an agreement to do any of the foregoing.
(b) Parent covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless the Company shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed) and except as otherwise expressly set forth in this Agreement):
(i) the business of it and its Subsidiaries shall be conducted in the ordinary course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, creditors, lessors, employees and business associates;
(ii) it shall not (A) split, combine or reclassify its outstanding shares of capital stock; or (B) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock other than dividends from its direct or indirect wholly owned Subsidiaries;
(iii) it shall not (A) enter into any transaction, other than as contemplated pursuant to this Agreement, to the extent any such transaction would require approval of the stockholders of Parent under applicable law or stock exchange rules; or (B) enter into an agreement relating to any acquisition, merger, consolidation or purchase that would reasonably be expected to (I) impose any material delay in the obtaining of, or commitsignificantly increase the risk of not obtaining, resolve any authorizations, consents, orders, declarations or agreeapprovals of any Governmental Entity necessary to consummate the Merger or the expiration or termination of any applicable waiting period, in writing (II) significantly increase the risk of any Governmental Entity entering an order prohibiting the consummation of the Merger, or (III) significantly increase the risk of not being able to remove any such order on appeal or otherwise, ;
(iv) amend Parent's or Merger Sub's Organizational Documents;
(v) neither it nor any of its Subsidiaries shall take any action or omit to take, take any action that it reasonably expects would cause any of its representations and warranties herein to become untrue in any material respect; and
(vi) neither it nor any of its Subsidiaries will authorize or enter into an agreement to do any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operationsforegoing.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Merger Effective Time (unless Parent shall otherwise consent approve in writing, which consent approval shall not be unreasonably be withheldwithheld or delayed), and except as otherwise expressly contemplated by this Agreement (including the Shrimp Business Divestiture) or as set forth in this Agreement):the Company Disclosure Letter:
(ai) it shall operate the business of it and its Subsidiaries shall be conducted only in the ordinary and usual course of business, consistent with past practice, and, to the extent consistent therewithwith such operation, it and use its Subsidiaries shall use their respective commercially reasonable best efforts to to: (A) preserve its the present business organization intact intact; and maintain its existing relations and goodwill (B) preserve all beneficial business relationships with all customers, suppliers, distributors, strategic partners, creditors, lessors, employees and others having business associatesdealings with the business of it and its Subsidiaries;
(bii) it shall maintain (A) the material assets of the Company in such condition and repair consistent with past practice, and (B) insurance upon all of the material assets of the Company and with respect to the conduct of the business of the Company in full force and effect, comparable in amount, scope, and coverage to that in effect on the date of this Agreement;
(iii) it shall not (iA) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (iiB) amend its certificate of incorporation or by-lawsbylaws; (iiiC) other than in the case of wholly-owned subsidiaries, split, combine or reclassify its outstanding shares of capital stock; (ivD) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, stock other than dividends from its direct or indirect wholly-wholly owned Subsidiaries; or (vE) purchaserepurchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(civ) neither it nor any of its Subsidiaries shall (iA) issue, sell, pledge, dispose of or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debtof, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class, Rights, any Voting Debt class or any other property Company Voting Debt; (B) grant or sell any option or right to purchase the assets (other than shares of Company Common Stock and associated Rights issuable pursuant to options and other stockthe Company, except regarding non-based awards outstanding on material assets in the date hereof under the Company Stock Plans)ordinary course of business, consistent with past practice; or (iiC) transfersubject any of the assets of the Company to any further material lien, lease, license, guarantee, sellcharge, mortgage, pledge, dispose ofsecurity interest or similar encumbrance (each, abandonan "Encumbrance"), cancelother than (i) as reflected, surrender reserved or allow to lapse otherwise disclosed in the financial statements included in or expire or encumber any material property or material assets incorporated by reference in the Company Reports and (including capital stock ii) in the ordinary course of any of its Subsidiaries) or business, consistent with past practice;
(dv) neither it nor any of its Subsidiaries shall restructureterminate, recapitalizeestablish, reorganize adopt, enter into, make any new grants or completely or partially liquidate or adopt a plan of complete or partial liquidation awards under, amend or otherwise enter into modify, any Compensation and Benefit Plans or pay or promise to pay, any bonus, profit-sharing or special compensation to the Employees or make any increase in the compensation payable or to become payable to any of such employees, except (i) for changes that are required by applicable law, (ii) to satisfy obligations under the terms of any agreement or arrangement imposing material changes or restrictions on the operation of its assets or businesses or adopt resolutions providing for or authorizing any plan in effect as of the foregoing;
date hereof, (eiii) neither it nor any of its Subsidiaries shall acquire (i) by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets for increases in compensation that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, except purchases of inventory and raw materials made in the ordinary course of business consistent with past practice (which shall include normal periodic performance reviews and related compensation and benefit increases) and (iv) for employment arrangements for or as permitted by Section 7.1(g)grants of awards to, whether or not material);
(f) neither it nor any of its Subsidiaries shall (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement newly hired employees in the ordinary course of business), (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange ratesbusiness consistent with past practice;
(gvi) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters);
(h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into or terminate any settlement of Company Contract, or compromise make any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time change in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measuresContracts;
(lvii) neither it nor any of its Subsidiaries shall make or rescind any material Tax election, amend any material Tax Return tax election or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled canceled or terminatedterminated without prior notice to Parent, in each case except in a manner consistent with past practice or as required by applicable Lawthe ordinary and usual course of business;
(mviii) other than with respect to any actions permitted under Section 7.2, neither it nor any of its Subsidiaries shall take settle or compromise any action material claims or omit to take litigation or, except in the ordinary and usual course of business, waive, release or assign any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VIII not being satisfiedmaterial rights or claims; and
(nix) neither it nor any of its Subsidiaries will shall authorize any of, or commit, resolve or agree, in writing or otherwise, enter into an agreement to take, do any of the foregoing actions; providedforegoing.
(b) The provisions of this Section 6.1 notwithstanding, however, that nothing contained in this Agreement shall give be construed or interpreted to Parentprevent the Company or any Subsidiary from (i) making, directly accepting or indirectlysettling intercompany advances to, rights from or with one another; (ii) causing any Subsidiary to control pay or direct distribute to the operations Company all cash, money market instruments, bank deposits, certificates of deposit, other cash equivalents, marketable securities and other investment securities then owned or held by such Subsidiary; or (iii) engaging in any other transaction incident to the normal cash management procedures of the Company prior and its Subsidiaries, including, without limitation, short-term investments in bank deposits, money market instruments, time deposits, certificates of deposit and bankers' acceptances and borrowings for working capital purposes and purposes of providing additional funds to Closing. Prior to ClosingSubsidiaries made, in each case, in the Company shall exerciseordinary course of business, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operationspast practice.
Appears in 1 contract
Samples: Merger Agreement (Baltek Corp)
Interim Operations. The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless Parent shall otherwise consent in writing, which consent shall not unreasonably be withheld, and except Except as otherwise expressly contemplated by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as agreed to in writing by Parent, the Company covenants and agrees that during the period from the date of this AgreementAgreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(a) the business and operations of it the Company and its Subsidiaries subsidiaries shall be conducted only in the ordinary course of business and usual course and, to the extent consistent therewith, it Company and its Subsidiaries subsidiaries shall use their respective commercially reasonable efforts to preserve its intact their current business organization intact organizations, keep available the services of their current officers and maintain its existing relations employees and preserve their relationships and goodwill with customers, suppliers, their material distributors, strategic partners, creditors, lessors, employees customers and suppliers and any other material third parties having business associates;dealings with them.
(b) it the Company shall not (i) authorize for issuance, issue, selldeliver, pledgesell or agree or commit to issue, dispose sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock owned by it in or the capital stock of any of its Subsidiaries; subsidiaries, any other securities or any securities convertible into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including without limitation stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof, (ii) amend its certificate of incorporation or by-laws; (iii) other than in the case of wholly-owned subsidiaries, split, combine or reclassify its outstanding shares of capital stock; (iv) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, other than dividends from its direct or indirect wholly-owned Subsidiaries; or (v) purchaserepurchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, or permit any of its Subsidiaries subsidiaries to purchase repurchase, redeem or otherwise acquire, any shares of its capital stock or any securities convertible into other equity interests of the Company or exchangeable or exercisable for any shares of its capital stock;
(c) neither it nor any of its Subsidiaries shall subsidiaries (i) issueincluding, sellwithout limitation, pledge, dispose of or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debt, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its subsidiaries), (iii) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its subsidiaries, (iv) amend or otherwise change its articles of incorporation or bylaws or permit any of its subsidiaries to amend its articles of incorporation, bylaws or equivalent organizational documents or (v) split, combine or reclassify any shares of its capital stock, and shall not permit any of its subsidiaries to split, combine or reclassify any shares of its capital stock;
(c) the Company shall not, and shall not permit any of its subsidiaries to (i) declare, set aside or pay any dividends on (whether in cash, stock of or other property), or make any class, Rightsother distributions in respect of, any Voting Debt of its capital stock (except for dividends paid by direct or any other property or assets (other than shares of Company Common Stock and associated Rights issuable pursuant indirect wholly owned subsidiaries to options and other stock-based awards outstanding on the date hereof under the Company Stock PlansCompany); or , (ii) transferacquire or agree to acquire, leaseincluding, licensewithout limitation, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire or encumber any material property or material assets (including capital stock of any of its Subsidiaries) or business;
(d) neither it nor any of its Subsidiaries shall restructure, recapitalize, reorganize or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the operation of its assets or businesses or adopt resolutions providing for or authorizing any of the foregoing;
(e) neither it nor any of its Subsidiaries shall acquire (i) by merging or consolidating with, or by purchasing all or a substantial portion of the assets (except raw materials, inventory or supplies in the ordinary course of business) or any capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, (iii) authorize or make any capital expenditures in excess of $200,000 (the "Capital Expenditures Excess Amount") in the aggregate in addition to the amount set forth in the Company's budget for capital expenditures for the period of time between the date hereof and the Effective Time (which capital budget is set forth in Section 5.01(c) of the Company Disclosure Schedule), or (iv) enter into, amend, modify or supplement any agreement, transaction, commitment or arrangement with any current or former officer, director, employee or other affiliate of the Company or any of its subsidiaries (or any affiliate of any of the foregoing) other than as contemplated by this Agreement;
(d) neither the Company nor any of its subsidiaries shall (i) grant or agree to any increase in any manner the compensation or fringe benefits of, or pay any bonus to, any current or former director, officer or employee except for (A) increases and bonuses expressly contemplated by or required under existing employment agreements or (B) bonus plans and other agreements and arrangements listed or described in Section 5.01(d) of the Company Disclosure Schedule and except in connection with terminating the Options and the Stock Plans, (ii) enter into any assets new or materially amend any existing employment, consulting, severance, termination, change-of-control or indemnification agreement with any current or former director, officer or employee of the Company, (iii) except as may be required to comply with applicable Law and except as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that are materialwas not in existence on the date hereof or amend, individually modify or terminate any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the aggregatedate hereof or (iv) except as may be required to comply with applicable Law and except as provided or otherwise contemplated in this Agreement (including, to without limitation, Section 2.02 hereof), pay any benefit not required by any plan or arrangement as in effect as of the date hereof (including, without limitation, the granting of, acceleration of, exercisability of or vesting of stock options, stock appreciation rights or restricted stock, except as otherwise contemplated by this Agreement), except in connection with terminating the Options and the Stock Plans and except for the payment of the employer match under the Company's 401(k) plan;
(e) the Company shall not, and shall not permit any of its Subsidiariessubsidiaries to, taken as a wholesell, except purchases lease, license, mortgage or otherwise encumber or subject to any Lien or otherwise dispose of, or agree to sell, lease, license, mortgage or otherwise encumber or subject to any Lien or otherwise dispose of, any of its properties or assets other than (i) immaterial properties or assets (or immaterial portions of properties or assets), (ii) inventory and raw materials in the ordinary course of business consistent with past practice, (iii) licenses granted by the Company in the ordinary course of business to customers for such customers' use of the Company's products and services, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as permitted to which appropriate reserves have been established by Section 7.1(g)the Company in accordance with U.S. generally accepted accounting principles, whether (v) Liens for assessments and other governmental charges or not material);
(f) neither it nor any Encumbrances of its Subsidiaries shall (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement landlords, carriers, warehousemen, mechanics and repairmen incurred in the ordinary course of business), in each case for sums not yet due and payable or due but not delinquent or being contested in good faith and for which adequate reserves have been established and (iivi) issueLiens incurred in the ordinary course of business in connection with workers' compensation, sell unemployment insurance and other types of social security or amend to secure the performance of tenders, statutory obligations, surety and appeal bonds, bids, leases, government contracts, performance and return of money bonds and similar obligations;
(f) the Company shall not, and shall not permit any of its subsidiaries to (i) incur, assume or pre-pay any Indebtedness or enter into any agreement to incur, assume or pre-pay any Indebtedness, or guarantee, or agree to guarantee, any such Indebtedness or obligation of another person, or issue or sell, or agree to issue or sell, any debt securities or options, warrants or other calls or rights to acquire any debt securities of the Company or any of its Subsidiariessubsidiaries, guarantee any debt securities of another Personothers, enter into any “"keep well” " or other agreement to maintain any financial statement condition of another Person person or enter into any arrangement having the economic effect of any of the foregoing, (iiiii) make or forgive any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, guarantees for the benefit of, or investment investments in, any other Personperson or entity, other than loans between or among the Company or and any of its direct or indirect wholly wholly-owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(g) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter in the aggregate for the Company subsidiaries and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available cash advances to the Company to spend in future quarters);
(h) neither it nor Company's or any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or such subsidiary's employees for reimbursable travel and other reserve;
(i) neither it nor any of its Subsidiaries shall, except business expenses incurred in the ordinary course of business consistent with past practicepractice or (iii) assume, enter intoguarantee or otherwise become liable or responsible (whether directly, renewcontingently or otherwise) for the obligations of any other Person, modifyexcept for the obligations of the subsidiaries of the Company permitted under this Agreement;
(g) neither the Company nor any of its subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, amenddissolution, terminatemerger, waiveconsolidation, delay the exercise ofrestructuring, release recapitalization or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit other reorganization of the Company or any of its Subsidiaries to subsidiaries (other than any transaction specifically contemplated by this Agreement);
(h) the Company shall not, and shall not permit any of its subsidiaries to, (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Timeinto, or materially amend, modify or amend in a manner adverse to supplement any Material Contract outside the ordinary course of business consistent with past practice (except as may be necessary for the Company or any of to comply with its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viiiobligations hereunder) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise ofrelease, grant, assign or release or assign transfer any of its material rights or claims under(whether such rights or claims arise under a Material Contract or otherwise);
(i) except for customer contracts entered into in the ordinary course of business, any confidentiality, standstill or similar agreement to which the Company shall not, and shall not permit its subsidiaries to, renegotiate or enter into any of its Subsidiaries is bound by new license, agreement or subjectarrangement relating to any Proprietary Rights;
(j) neither the Company and its subsidiaries (i) shall comply with their obligations under the Material Contracts as such obligations become due, (ii) shall continue in force insurance covering risks of such types and in such amounts as are consistent with the Company's past practices and (iii) shall not permit any insurance policy naming it nor as beneficiary or loss payable payee to be canceled or terminated;
(k) the Company shall not, and shall not permit any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereofsubsidiaries to, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take establish or acquire any action with respect to, adopt, enter into, terminate subsidiary other than wholly-owned subsidiaries or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for subsidiaries organized outside of the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreementUnited States and its territorial possessions, (ii) take pay, discharge or satisfy any action with respect toclaims, adoptliabilities or obligations (absolute, enter intoaccrued, terminate asserted or amend any employment unasserted, contingent or severance agreement or arrangement for the benefit or welfare of any current or former directorotherwise), officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j(x) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment discharge or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above satisfaction in the ordinary course of business and consistent with past practices as to practice of liabilities reflected on or reserved in the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) financial statements of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than incurred in the ordinary course of business and consistent with past practicepractice or (y) the payment of the Company's Expenses (as defined herein); provided(iii) amend, however, that notwithstanding modify or waive any other provision term of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs outstanding security of the Company or any of its Subsidiaries or places any material restrictions on subsidiaries, except in connection with terminating the ability of Options and the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measuresStock Plans;
(l) neither it nor the Company shall, and shall cause its subsidiaries to, (i) maintain any real property to which the Company and any of its Subsidiaries shall make subsidiaries have ownership or rescind a leasehold interest (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition, subject to reasonable wear and tear and subject to any casualty or condemnation, (ii) timely pay all material Tax electiontaxes, amend any water and sewage rents, assessments and insurance premiums affecting such real property other than those it is validly contesting and (iii) timely comply in all material Tax Return or permit any insurance policy naming it as a beneficiary or loss-payable payee respects with the terms and provisions of all leases, contracts and agreements relating to be cancelled or terminated, in each case except in a manner consistent with past practice or as required by applicable Lawsuch real property and the use and operation thereof;
(m) other than the Company shall not, and shall not permit any of its subsidiaries to, (i) settle or compromise any pending or threatened suit, action, claim or litigation, except with respect to the settlement or compromise of any actions permitted under Section 7.2such matter which does not involve equitable or injunctive relief and does not obligate the Company and its subsidiaries to make aggregate cash payments exceeding $50,000, neither it nor (ii) change any of the material accounting policies, practices or procedures (including material tax accounting policies, practices and procedures) used by the Company and its subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in U.S. generally accepted accounting principles, (iii) revalue in any material respect any of its Subsidiaries assets (including, without limitation, writing down or writing off any notes or accounts receivable in any material manner), except as required by U.S. generally accepted accounting principles or (iv) make or change any material tax election, make or change any material method of accounting with respect to Taxes except as may be required as a result of a change in applicable Law, settle or compromise any material Tax liability or file any material amended Tax Return;
(n) the Company shall take not, and shall not permit any action of its subsidiaries to knowingly take, or omit knowingly agree or commit to take take, any action that is reasonably likely to to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions to the Merger set forth in Article VIII 6 not being satisfied, or knowingly omit, or knowingly agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied; and
(no) neither it nor the Company shall not, and shall not permit any of its Subsidiaries will authorize any ofsubsidiaries to, agree or commit, resolve or agree, in writing or otherwise, commit to take, do any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operationsforegoing.
Appears in 1 contract
Interim Operations. The Company covenants and agrees as to itself and its Subsidiaries that, after Between the date hereof and prior the Closing Date the Company and Acquiree will conduct their operations as follows:
6.1 Except as herein provided, Acquiree will carry on its business in substantially the same manner as heretofore and the assets, properties and rights now owned by it will be maintained, as far as practicable, in the usual and ordinary course of business, to the Effective Time (unless Parent same extent, under the same insurance coverage and in the same condition as on the date of this Agreement; except with the consent of the Company, Acquiree shall otherwise consent engage in writingno activity or business other than as is presently conducted by Acquiree, which consent shall not unreasonably or as may be withheld, and except as otherwise expressly necessary to effect the transactions contemplated by this Agreement Agreement;
6.2 Except as herein provided, or as set forth may hereafter be agreed to in this Agreement):
(a) writing by the business of it and its Subsidiaries parties, neither the Company nor Acquiree shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, strategic partners, creditors, lessors, employees and business associates;
(b) it shall not (i) issue, sell, pledge, sell or dispose of any property or assets, nor will they encumber any capital stock owned by it in any of its Subsidiaries; (ii) amend its certificate of incorporation property or by-laws; (iii) assets, other than in the case normal course of wholly-owned subsidiariestheir business operations or as specifically contemplated by this Agreement;
6.3 Neither the Company nor Acquiree will, splitexcept with the written consent of the other party, combine issue or reclassify its outstanding sell, or issue the right to subscribe to, any shares of capital stock or securities exchangeable or exercisable for capital stock; (iv) declare, set aside or acquire for a consideration any shares of capital stock or warrants, or declare or pay any dividend payable in cash, stock or property in respect of on any capital stock, other than dividends from its direct as may be specifically disclosed in any Schedule annexed hereto;
6.4 Except as contemplated herein, neither the Company nor Acquiree will, absent a written consent of the other, amend their Certificates of Incorporation or indirect whollyBy-owned Subsidiaries; or (v) purchaseLaws;
6.5 The Company and Acquiree shall, redeem or otherwise acquireat reasonable times, except permit access to their respective properties and their respective books and records for the acquisition purpose of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable examination by such holder upon exercise of Company Stock Options any party and their respective officers, directors, attorneys, accountants and representatives, and each party shall furnish to the extent other, upon request, any information reasonably required or permitted under the terms in respect of such Company Stock Optionsproperty, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(c) neither it nor any of its Subsidiaries shall (i) issue, sell, pledge, dispose of or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debt, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class, Rights, any Voting Debt or any other property or assets (other than shares of Company Common Stock and associated Rights issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans); or (ii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire or encumber any material property or material assets (including capital stock of any of its Subsidiaries) or business;
(d) neither it nor any of its Subsidiaries shall restructure, recapitalize, reorganize or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the operation of its assets or businesses or adopt resolutions providing for or authorizing any of the foregoing;
(e) neither it nor any of its Subsidiaries shall acquire (i) by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to 6.6 Neither the Company and any of its Subsidiaries, taken as a whole, except purchases of inventory and raw materials in the ordinary course of business (or as permitted by Section 7.1(g), whether or not material);
(f) neither it nor any of its Subsidiaries shall (i) Acquiree will incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business)contingent liability, (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) contract or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(g) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters);
(h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary course of their business consistent or in connection with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release any transaction specifically disclosed herein or assign in any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit Schedule hereto;
6.7 Neither the Company nor Acquiree will acquire any business or assets of any of its Subsidiaries to (i) enter going business, nor will they merge or consolidate with or into any Contract other corporation, nor will they change the character of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shalltheir respective businesses, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided shall be specifically disclosed herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent Schedule annexed hereto;
6.8 Acquiree will promptly advise the Company in writing of any material adverse change in its financial condition, business or any of its Subsidiaries affairs arising from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above matters occurring not in the ordinary usual course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of business; the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measures;
(l) neither it nor any of its Subsidiaries shall make or rescind any material Tax election, amend any material Tax Return or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, in each case except in a manner consistent with past practice or as required by applicable Law;
(m) other than with respect to any actions permitted under Section 7.2, neither it nor any of its Subsidiaries shall take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VIII not being satisfied; and
(n) neither it nor any of its Subsidiaries will authorize any of, or commit, resolve or agree, promptly advise Acquiree in writing of any adverse change in its financial condition, business or otherwise, to take, any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operationsaffairs.
Appears in 1 contract
Interim Operations. The Company and REDI each covenants and agrees as to itself and and, in the case of the Company, as to its Subsidiaries thatsubsidiaries, that after the date hereof and prior to the Effective Time Closing (unless Parent unless, in the case of the Company or any of its subsidiaries, REDI, or in the case of REDI, the Company, shall otherwise expressly consent in writing, which consent shall not unreasonably be withheld, writing and except as otherwise expressly permitted or contemplated by this Agreement or as set forth in this AgreementSection 5.1 of the Company Disclosure Letter or the REDI Disclosure Letter, respectively):
(a) the business of it and its Subsidiaries subsidiaries shall be conducted only in the ordinary and usual course and, to the extent consistent therewith, each of it and its Subsidiaries subsidiaries shall use their respective commercially its reasonable best efforts to (i) preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, strategic partners, creditors, lessors, employees and business associates; (ii) maintain and keep its properties and assets in good repair and condition, subject to ordinary wear and tear; and (iii) maintain in effect all existing governmental permits that are required for the continued operation of its and its subsidiaries’ respective businesses in all material respects as they are currently conducted;
(b) neither it nor any of its subsidiaries shall not (i) sell or pledge or agree to sell or pledge any stock, limited liability company interests or other equity interests owned by it; (ii) except as required by applicable law amend its certificate of formation, limited liability company agreement, memorandum or articles of association; (iii) split, combine, subdivide or reclassify any of its outstanding limited liability company interests or other equity interests; (iv) declare, set aside or pay any dividend or make any other distribution payable in cash, property, limited liability company interests or other equity interests in respect of any limited liability company interests or other equity interests (for the avoidance of doubt, this provision, in respect of REDI, shall be deemed to be an amendment to any provisions to the contrary in REDI’s limited liability company agreement), provided that, notwithstanding the foregoing, (x) the Company shall be permitted to make distributions to the Current ARCA Members in accordance with the terms of (or as approved by its Board under the terms of) its limited liability company agreement (including, without limitation, distributions in accordance with Section 8.1. thereof in respect of the payment of taxes) prior to the Closing so long as the Company has the Requisite Company Cash Balance as of the Closing and the Company Closing Cash Balance exceeds the Requisite REDI Cash Balance by $30 million or more after giving effect to all distributions by the Company after the date hereof (including any declared but unpaid distributions) and (y) REDI shall be permitted to make distributions to the Contributors in accordance with the terms of (or as approved by its Board under the terms of) its limited liability company agreement prior to Closing so long as REDI has the Requisite REDI Cash Balance as of the Closing; or (v) repurchase, redeem, or otherwise acquire, directly or indirectly, any of its limited liability company interests or other equity interests or any securities or other equity interests convertible into or exchangeable or exercisable for any of its limited liability company interests or other equity interests;
(c) neither it nor any of its subsidiaries shall (i) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (ii) amend its certificate of incorporation or by-laws; (iii) other than in the case of wholly-owned subsidiaries, split, combine or reclassify its outstanding shares of capital stock; (iv) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, other than dividends from its direct or indirect wholly-owned Subsidiaries; or (v) purchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Optionsadditional limited liability company interests, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(c) neither it nor any of its Subsidiaries shall (i) issue, sell, pledge, dispose of or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debt, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock limited liability company interests or other equity interests of any class, Rights, any Voting Debt class or any other property or assets (other than shares of Company Common Stock and associated Rights issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans)assets; or (ii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire of or encumber any material property or material assets; or (iii) (A) make or authorize or commit for any capital expenditures in excess of $1,000,000 individually or the following amounts in the aggregate: (1) $6,000,000 in the aggregate through January 31, 2002, (2) $10,000,000 in the aggregate through February 28, 2002, (3) $14,000,000 in the aggregate through March 31, 2002, (4) $18,000,000 in the aggregate through April 30, 2002, and (5) $22,000,000 in the aggregate through June 17, 2002 or (B) make any acquisition of (by merger, consolidation, acquisition of stock or assets (including capital or any other means), or any investment in, assets or stock of any other Person (other than acquisitions of its Subsidiaries) or businessassets in the ordinary course of business consistent with past practice);
(d) except as may be required by applicable law or regulation, neither it nor any of its Subsidiaries subsidiaries shall restructure(x) grant any severance or termination pay to, recapitalizeincrease the salary, reorganize wage, bonus or completely other compensation of, or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into any employment or severance agreement with any director, manager, officer or other employee of it or any of its subsidiaries, or (y) terminate, establish, adopt, enter into, make any new grants or awards under, amend or otherwise modify, any incentive, bonus, deferred compensation, pension, retirement, profit-sharing, thrift, savings, employee stock ownership, stock bonus, stock purchase, restricted stock, stock option or other stock based plan, any employment or severance agreement, plan, policy or arrangement, other employee benefit plan or any applicable “change of control” or similar provision in any plan, agreement, policy or arrangement imposing material changes that covers current or restrictions on the operation former employees, officers, directors or managers of it or any of its assets subsidiaries (or businesses any trust or adopt resolutions providing fund thereunder) or establish any target bonus levels, the size of any bonus pool, or any objectives for the achievement of any target bonus or authorizing any of the foregoingtarget bonus levels;
(e) neither it nor any of its Subsidiaries subsidiaries shall acquire (i) by merging settle or consolidating withcompromise any material claims or litigation, modify, amend or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and terminate any of its Subsidiariesmaterial Contracts (including, taken as a wholewithout limitation, except purchases any Contract disclosed in response to Section 3.29), in each case other than any such termination that will occur by the terms of inventory and raw materials such Contract without any action by it or any of its subsidiaries or any such modification, amendment or termination that is permitted under the terms of such Contract to be made by the other party or parties to such Contract, or enter into any Contract that would have been required to be disclosed or described in Section 3.29 of its Disclosure Letter if such Contract had been entered into on or prior to the ordinary course date hereof (other than license agreements with respect to the sale of business quote information or redisplay or republication of its limit order book) or waive, release, relinquish or assign any material Contract (including, without limitation, any Contract disclosed in response to Section 3.29) (or as permitted by Section 7.1(gany of its rights or claims thereunder), whether in each case other than any such waiver, release, relinquishment or not material)assignment that will occur by the terms of such Contract without any action by it or any of its subsidiaries or is permitted under the terms of such Contract to be made by the other party or parties to such Contract, or cancel or forgive any material indebtedness owed to it or any of its subsidiaries;
(f) it shall not make any material tax election, amend any Tax elections currently in effect, change or consent to any change in any method of accounting for any Tax purpose, or file any Tax Return on a basis that is not consistent with past practice;
(g) except as required by applicable law or regulation, permit any insurance policy naming it as a beneficiary or a loss payable payee to be canceled or terminated except in the ordinary and usual course of business;
(h) except as may be required as a result of a change in law or in GAAP, neither it nor any of its Subsidiaries subsidiaries shall (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business), (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of change any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(g) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters);
(h) neither it nor any of its Subsidiaries shall make any material changes in accounting methodspractices, principles or practices, except insofar as may have been required methods used by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserveit;
(i) neither it nor any of its Subsidiaries shallsubsidiaries shall adopt a plan of complete or partial liquidation, dissolution (except in the ordinary course as required by applicable law), merger, consolidation, restructuring, recapitalization or other reorganization of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company it or any of its Subsidiaries to subsidiaries (i) enter into any Contract of other than the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ixtransactions contemplated hereby), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, subsidiaries shall (i) except as otherwise requested by Parent pursuant to Section 7.11(c)incur, take assume, modify or prepay any action with respect tolong-term debt or incur, adopt, enter into, terminate modify or amend assume any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreementshort-term debt, (ii) take any action with respect toassume, adoptguarantee, enter intoendorse or otherwise become liable or responsible (whether directly, terminate contingently or amend any employment or severance agreement or arrangement otherwise) for the benefit or welfare obligations of any current third party, including by means of any “keep well” or former directorother agreement to support or maintain any financial statement condition of another Person, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase accelerate or delay collection of notes or accounts receivable in any respect advance of or beyond their regular due dates or the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and dates consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above)practice;
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company it nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries subsidiaries shall enter into any settlement agreement or arrangement, or amend or modify any existing agreement or arrangement, or engage in any new transaction, with any of their respective members or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company affiliates on terms to it or any of its Subsidiaries or places any material restrictions subsidiaries less favorable than could be reasonably expected to have been obtained with an unaffiliated third party on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measures;an arm’s-length basis; and
(l) neither it nor any of its Subsidiaries subsidiaries shall make authorize or rescind any material Tax election, amend any material Tax Return or permit any insurance policy naming it as a beneficiary or loss-payable payee enter into an agreement to be cancelled or terminated, in each case except in a manner consistent with past practice or as required by applicable Law;
(m) other than with respect to any actions permitted under Section 7.2, neither it nor do any of its Subsidiaries shall take any action the foregoing or omit to take any action that is reasonably likely to result in would knowingly cause any of the conditions to representations or warranties, in the Merger set forth case of REDI, of REDI or any of the Contributors, or in Article VIII not being satisfied; and
(n) neither it nor the case of the Company or any of its Subsidiaries will authorize any ofsubsidiaries, of the Company or commit, resolve or agree, in writing or otherwise, to take, any of the foregoing actions; providedCurrent ARCA Members, however, that nothing contained in this Agreement shall give to Parent, directly be untrue or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operationsincorrect.
Appears in 1 contract
Interim Operations. The Company covenants From and agrees as to itself and its Subsidiaries that, after the date hereof hereof, the Sellers shall cause the Companies and prior their Subsidiaries to the Effective Time (unless Parent shall otherwise consent in writing, which consent shall not unreasonably be withheld, and except as otherwise expressly contemplated by this Agreement or as set forth in this Agreement):
(a) the business of it and its Subsidiaries shall be conducted conduct their respective businesses in the ordinary course consistent with past practice and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable efforts to preserve its business organization intact the operations, assets, properties, physical facilities and maintain its existing relations and goodwill relationships with customersemployees, suppliers, distributorscustomers and third parties having material business dealings with the Companies and their Subsidiaries. Without limiting the generality of the foregoing, strategic partnersexcept (a) as otherwise required by this Agreement, creditors(b) for actions approved by the Purchasers (which approval shall not be unreasonably withheld, lessorsconditioned or delayed), employees (c) as required to comply with applicable Law, (d) for the Restructuring Transactions if and business associatesonly to the extent substantially as described in Section 1.3 of the Disclosure Schedule or (e) as set forth on Section 5.1 of the Disclosure Schedule, from and after the date hereof, the Sellers shall cause the Companies and their Subsidiaries not to take any of the following actions:
(i) amend its certification of incorporation, bylaws or other similar organizational or governing documents;
(bii) it shall not adopt a plan or agreement of complete or partial liquidation, dissolution, restructuring, merger, consolidation, restructuring, recapitalization or other reorganization;
(iiii) (A) issue, sell, transfer, pledge, purchase, redeem, retire, grant, dispose of or encumber the Equity Interests or any capital stock owned by it in other equity or similar interests of the Companies or any of its Subsidiaries; (ii) amend its certificate of incorporation or by-laws; (iii) other than in the case of wholly-owned subsidiaries, split, combine or reclassify its outstanding shares of capital stock; (iv) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, other than dividends from its direct or indirect wholly-owned Subsidiaries; or (v) purchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, or permit any of its their Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(c) neither it nor any of its Subsidiaries shall (i) issue, sell, pledge, dispose of or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debt, or (B) securities convertible into grant any option, warrant, call or exchangeable other right to purchase or exercisable forobtain, or optionsotherwise dispose of or encumber, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class, Rights, any Voting Debt the Equity Interests or any other property equity or similar interests of the Companies or any of their Subsidiaries;
(iv) enter into or consummate any transaction involving the acquisition, merger or consolidation of the business, stock, assets or other properties of any other Person;
(v) acquire any material properties or assets (other than shares of Company Common Stock and associated Rights issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans); or (ii) transfersell, assign, lease, license, guaranteetransfer, sellconvey, mortgageexchange or swap, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire or encumber any material property or material assets (including capital stock of any of its Subsidiaries) or business;
(d) neither it nor any of its Subsidiaries shall restructure, recapitalize, reorganize or completely or partially liquidate or adopt a plan of complete or partial liquidation mortgage or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the operation of its assets or businesses or adopt resolutions providing for or authorizing any of the foregoing;
(e) neither it nor any of its Subsidiaries shall acquire (i) by merging or consolidating withencumber, or by purchasing all or a substantial portion of the assets of or subject to any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, except purchases of inventory and raw materials in the ordinary course of business (or as permitted by Section 7.1(g), whether or not material);
(f) neither it nor any of its Subsidiaries shall (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person Encumbrance (other than pursuant to the Credit Agreement in the ordinary course Permitted Encumbrance) or otherwise dispose of business), (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any material portion of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” properties or other agreement to maintain any financial statement condition of another Person assets with a value or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(g) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment purchase price in excess of $10 million per quarter 25,000 individually or $250,000 in the aggregate for the Company and its Subsidiaries, taken as a whole other than (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters);
(hA) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, (B) pursuant to existing agreements in effect prior to the date hereof, (C) as may be required by applicable Law or any Governmental Authority in order to permit or facilitate the consummation of the transactions contemplated by this Agreement, or (D) dispositions of obsolete or worthless assets or (E) transactions entirely among the Companies and/or any of their wholly-owned Subsidiaries;
(vi) incur, assume, guarantee, prepay or otherwise become liable for any Indebtedness, other than (A) any Indebtedness entirely among the Companies and/or any of their wholly-owned Subsidiaries, (B) guarantees by the Companies of Indebtedness of their Subsidiaries, and (C) Indebtedness incurred pursuant to agreements in effect prior to the execution of this Agreement;
(vii) enter into, renew, modify, amend, terminate, waive, delay the exercise of, release amend or assign modify in any material rights respect or claims underterminate any Material Contract, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); provided;
(viii) incur or commit to any material capital expenditures other than capital expenditures incurred or committed in the ordinary course of business consistent with past practice, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall or enter into any settlement new line of business;
(ix) change its financial accounting policies or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company procedures or any of its Subsidiaries methods of reporting income, deductions or places any other material restrictions on items for financial accounting purposes, except as required by GAAP or applicable Law;
(x) reclassify, combine, split, subdivide or amend the ability terms of the Company or any of its Subsidiaries to impose capital stock or issue or authorize the issuance of any labor saving other securities in respect of, in lieu of, or other cost reduction measuresin substitution for, shares of its capital stock;
(lxi) neither it nor any of its Subsidiaries shall make or rescind any material Tax election, amend any material Tax Return or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, in each case except in a manner the ordinary course of business consistent with past practice or as required by set forth on Section 5.1(xi) of the Disclosure Schedule, (A) increase the annual level of compensation of any employee, manager, director or officer of the Companies or any of their respective Subsidiaries, (B) grant any bonus, benefit or other direct or indirect compensation to any employee, manager, director or officer of the Companies or any of their respective Subsidiaries, (C) increase the coverage or benefits available under any (or create any new) severance pay, termination pay, vacation pay, company awards, salary continuation for disability, sick leave, deferred compensation, bonus or other incentive compensation, insurance, pension or other employee benefit plan or arrangement or Company Plan made to, for, or with any employee, manager, director or officer of the Companies or any of their respective Subsidiaries or otherwise modify or amend or terminate any such plan or arrangement, (D) enter into any employment, deferred compensation, severance, consulting, non-competition or similar agreement (or amend any such agreement) which provides for total annual compensation in excess of $150,000 or total annual compensation less than $150,000 to which the Companies or any of their respective Subsidiaries is a party or involving an employee, manager, director or officer of the Companies or any of their respective Subsidiaries or (F) amend, modify or terminate any Company Plan;
(xii) terminate any Key Employee, other than for “cause”;
(xiii) recognize or bargain with any Union, enter into, modify or terminate any labor or Collective Bargaining Agreement, through negotiations or otherwise, or make any commitment or incur any liability to any Union;
(xiv) cancel or terminate any of the material insurance policies of Companies or any of their respective Subsidiaries or permit any of the coverage thereunder to lapse, unless simultaneously with such termination, cancellation or lapse, replacement policies providing coverage equal to or greater than the coverage under such canceled, terminated or lapsed insurance policies are in full force and effect;
(xv) license, transfer, assign, abandon or otherwise dispose of the ownership of or any valid rights to use any Intellectual Property, other than non-exclusive licenses granted in the ordinary course of business consistent with past practice or any such ownership interest or right not material to the Business;
(xvi) waive any right of substantial value or voluntarily and knowingly suffer any extraordinary loss under any Material Contract;
(xvii) settle any material Action with respect to the Companies, their Subsidiaries, the Sellers or the Business (other than any litigation in connection with the collection of accounts receivable in the ordinary course of business consistent with past practice or to enforce the terms of this Agreement) that, with respect any such settlement, requires payment in excess of $50,000 or results in any limitation of the conduct of the Business as a condition to such settlement;
(xviii) (A) make, change or revoke any election relating to Taxes, (B) settle and/or compromise any Tax liability; (C) prepare any Tax Returns in a manner which is inconsistent with past practices with respect to the treatment of items on such Tax Returns; (D) file an amended Tax Return or a claim for refund of Taxes with respect to the income, operations or property of the Companies or the Companies’ Subsidiaries; (E) change any annual accounting period for applicable Tax purposes, adopt or change any Tax accounting method in any material respect or (F) enter into any closing agreement relating to Taxes, settle, concede, compromise or abandon any Tax claim or assessment, surrender any right to claim a refund of Taxes;
(xix) change in any material respect any timing, policy, or practices for the treatment of inventory or the collection of accounts receivable or payables of accounts payable;
(xx) implement any layoffs or mass terminations that would give rise to any obligations or Liabilities under the Worker Adjustment and Retraining Notification Act (“WARN”) or any similar state, local, or foreign Law;
(mxxi) other than at any time prior to the Adjustment Determination Effective Time distribute or transfer Cash and Cash Equivalents to Sellers as members with respect to any actions permitted under Section 7.2, neither it nor any a value in excess of its Subsidiaries shall $100,000 in the aggregate;
(xxii) take any action that would reasonably be expected to, individually or omit together with any other action, materially and adversely affect the validity or full force and effectiveness of any Material Permit (or other material Permit necessary for the Companies and their Subsidiaries to own, lease and operate their respective properties and assets and to carry on the Business as then being conducted) or result in the expiration, non-renewal, suspension, cancellation, or revocation of any Material Permit; or
(xxiii) agree or commit to take any action that is reasonably likely to result in any of the conditions to the Merger do anything prohibited by this Section 5.1. Except as set forth in Article VIII not being satisfied; and
(n) neither it nor any of its Subsidiaries will authorize any ofthis Section 5.1, or commit, resolve or agree, in writing or otherwise, to take, any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to the Closing, the Company shall each Seller will exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of over its and its Subsidiaries’ operationsrespective operations with respect to the Business.
Appears in 1 contract
Samples: Equity Purchase Agreement (Primus Telecommunications Group Inc)
Interim Operations. The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless Parent shall otherwise consent approve in writing, which consent approval shall not be unreasonably be withheld, and except as otherwise expressly contemplated by this Agreement or as set forth in this Agreement):
(a) the business of it and its Subsidiaries shall be conducted in the ordinary and usual course consistent with past practices and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, strategic partners, creditors, lessors, employees and business associates;
(b) it shall not not, (i) issue, sell, pledge, sell otherwise dispose of or encumber any capital stock owned by it in subject to Lien (other than Permitted Liens) any of its Subsidiaries' Capital Stock owned by it; (ii) amend its certificate of incorporation or charter, by-lawslaws or, except for any amendment which will not hinder, delay or make more costly to Parent the Offer or the Merger; the Rights Agreement; (iii) other than in the case of wholly-owned subsidiaries, split, combine or reclassify its outstanding shares of capital stockCapital Stock; (iv) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, Capital Stock other than dividends from its direct or indirect wholly-owned Subsidiariesthe issuance of Rights in connection with the issuance of Capital Stock upon the exercise of Company Options; or (v) purchaserepurchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, acquire or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock Capital Stock; or any securities convertible into or exchangeable or exercisable for any shares of its capital stockCapital Stock; or (vi) adopt a plan of complete or partial liquidation or dissolution, merger or otherwise restructure or recapitalize or consolidate with any Person other than Merger Sub or another wholly-owned Subsidiary of Parent;
(c) neither it nor any of its Subsidiaries shall (i) authorize for issuance or issue, sell, pledge, sell or otherwise dispose of or encumber subject to any Lien (Aother than Permitted Liens) any shares of its capital stock of any class, Rights or any Voting Debtof, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock Capital Stock of any class, Rights, any Voting Debt class or any other property or assets (other than shares of Company Common Stock and associated Rights issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans); or (ii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire or encumber any material property or material assets (including capital stock of any of its Subsidiaries) or business;
(d) neither it nor any of its Subsidiaries shall restructure, recapitalize, reorganize or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the operation of its assets or businesses or adopt resolutions providing for or authorizing any of the foregoing;
(e) neither it nor any of its Subsidiaries shall acquire (i) by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, except purchases of inventory and raw materials in the ordinary course of business (or as permitted by Section 7.1(g), whether or not material);
(f) neither it nor any of its Subsidiaries shall (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business), (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(g) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters);
(h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measures;
(l) neither it nor any of its Subsidiaries shall make or rescind any material Tax election, amend any material Tax Return or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, in each case except in a manner consistent with past practice or as required by applicable Law;
(m) other than with respect to any actions permitted under Section 7.2, neither it nor any of its Subsidiaries shall take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VIII not being satisfied; and
(n) neither it nor any of its Subsidiaries will authorize any of, or commit, resolve or agree, in writing or otherwise, to take, any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operations.any
Appears in 1 contract
Interim Operations. The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless Parent shall otherwise consent approve in writing, which consent approval shall not be unreasonably be withheld, and except as otherwise expressly contemplated by this Agreement or as set forth in this Agreement):
): (a) the business of it and its Subsidiaries shall be conducted in the ordinary and usual course consistent with past practices and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, strategic partners, creditors, lessors, employees and business associates;
; (b) it shall not not, (i) issue, sell, pledge, sell otherwise dispose of or encumber any capital stock owned by it in subject to Lien (other than Permitted Liens) any of its Subsidiaries' Capital Stock owned by it; (ii) amend its certificate of incorporation or charter, by-lawslaws or, except for any amendment which will not hinder, delay or make more costly to Parent the Offer or the Merger; the Rights Agreement; (iii) other than in the case of wholly-owned subsidiaries, split, combine or reclassify its outstanding shares of capital stockCapital Stock; (iv) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, Capital Stock other than dividends from its direct or indirect wholly-owned Subsidiariesthe issuance of Rights in connection with the issuance of Capital Stock upon the exercise of Company Options; or (v) purchaserepurchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, acquire or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock Capital Stock; or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
Capital Stock; or (vi) adopt a plan of complete or partial liquidation or dissolution, merger or otherwise restructure or recapitalize or consolidate with any Person other than Merger Sub or another wholly-owned Subsidiary of Parent; 17 23 (c) neither it nor any of its Subsidiaries shall (i) authorize for issuance or issue, sell, pledge, sell or otherwise dispose of or encumber subject to any Lien (Aother than Permitted Liens) any shares of its capital stock of any class, Rights or any Voting Debtof, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock Capital Stock of any class, Rights, class or any Voting Debt or any other property or assets (other than shares of Company Common Stock and associated Rights Shares issuable pursuant to options and other stock-based awards Company Options outstanding on the date hereof under hereof, the grant of Company Options to newly hired employees in accordance with a benefit matrix previously provided to Parent and after notification of Parent and automatic grants of director stock options as mandated by the Company's First Amended 1988 Nonqualified Stock PlansOption Plan for Outside Directors); or (ii) other than in the ordinary and usual course of business consistent with past practices, transfer, lease, license, guarantee, sellsell or otherwise dispose of or subject to any Lien (other than Permitted Liens) any other property or assets or incur or modify any material indebtedness or other liability (except for additional borrowings in the ordinary course under lines of credit in existence on the date hereof); (iii) assume, mortgageguarantee, pledgeendorse or otherwise become liable or responsible (whether directly, dispose contingently or otherwise) for the obligations of any other Person except in the ordinary course of business consistent with past practices and except for obligations of Subsidiaries of the Company incurred in the ordinary course of business; (iv) make any loans to any other Person (other than to Subsidiaries of the Company or, customary loans or advances to employees in connection with business-related travel in the ordinary course of business consistent with past practices); or (v) make any commitments for, make or authorize any capital expenditures other than in amounts less than $150,000 individually and $3,000,000 in the aggregate or, by any means, make any acquisition of, abandonor investment in, cancel, surrender assets or allow to lapse or expire or encumber any material property or material assets (including capital stock of any of its Subsidiaries) or business;
other Person; (d) except as may be required to comply with applicable law or by existing contractual commitments, neither it nor any of its Subsidiaries shall restructure, recapitalize, reorganize or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise (i) enter into any new agreements or commitments for any severance or termination pay to, or enter into any employment or severance agreement or arrangement imposing material changes or restrictions on the operation with, any of its assets directors, officers or businesses employees or adopt resolutions providing consultants except for or authorizing any (a) specific arrangements with ten of the foregoing;
Company's employees and one of its directors which have been previously disclosed to Parent and (b) reasonable severance payments made to employees in the ordinary course of business and consistent with past practices, or (ii) terminate, establish, adopt, enter into, make any new grants or awards under, amend or otherwise modify, any Compensation and Benefit Plan or increase or accelerate the salary, wage, bonus or other compensation of any employees or directors (except for increases occurring in the ordinary and usual course of business, which shall include normal periodic performance reviews and related compensation and benefit increases, but not any general across-the-board increases) or consultants or pay or agree to pay any pension, retirement allowance or other employee benefit not required by any existing Compensation and Benefit Plan; (e) neither it nor any of its Subsidiaries shall acquire (i) by merging shall, except as may be required as a result of a change in law or consolidating within GAAP, or by purchasing all or a substantial portion change any of the assets of accounting principles or any stock of, or practices used by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, except purchases of inventory and raw materials in the ordinary course of business (or as permitted by Section 7.1(g), whether or not material);
it; (f) neither it nor any of its Subsidiaries shall (i) incur revalue in any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business), (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or respect any of its Subsidiariesmaterial assets, guarantee any debt securities including writing down the value of another Personinventory or writing-off notes or accounts receivable, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
business consistent with past practices; (g) neither it nor any of its Subsidiaries shall make settle or compromise any capital expenditures material claims or other expenditures with respect to propertylitigation or terminate or materially amend or modify any of its material Contracts or waive, plant release or equipment in excess of $10 million per quarter in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in assign any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters);
material rights or claims; (h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measures;
(l) neither it nor any of its Subsidiaries shall make or rescind any material Tax election, amend any material Tax Return election or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled canceled or terminated, in each case except in a manner consistent with past practice or as required by applicable Law;
; (mi) other than with respect to any actions permitted under Section 7.2, neither it nor any of its Subsidiaries shall take any action or omit to take any action that is reasonably likely would cause any of its representations and warranties herein to result become untrue in any of the conditions to the Merger set forth in Article VIII not being satisfiedmaterial respect; and
and (nj) neither it nor any of its Subsidiaries will authorize or enter into any of, or commit, resolve or agree, in writing or otherwise, agreement to take, do any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closingforegoing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operations.18
Appears in 1 contract
Samples: Merger Agreement (Intel Corp)
Interim Operations. (a) The Company and STI each covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (except for subsection (iii) below which will continue after the Effective Time) (unless Parent STI or the Company, as the case may be, shall otherwise consent approve in writing, which consent approval shall not be unreasonably be withheldwithheld or delayed, and except as otherwise expressly contemplated by this Agreement or in its respective Disclosure Letter or as set forth in this Agreementrequired by applicable Law):
(ai) the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially all reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, regulators, distributors, strategic partners, creditors, lessors, employees and business associates;
(bii) it shall not (i) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (iiA) amend its certificate of incorporation or by-laws; (iiiB) other than in the case of wholly-owned subsidiaries, split, combine combine, subdivide or reclassify its outstanding shares of capital stock; (ivC) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, other than dividends from its direct or indirect wholly-owned Subsidiaries; or (vD) purchaserepurchase, redeem or otherwise acquire, except for in the acquisition case of shares STI, in connection with the redemption of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, outstanding STI Redeemable Warrants or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(ciii) neither it nor any of its Subsidiaries shall (i) issue, sell, pledge, dispose knowingly take or fail to take any action if the result of such taking or encumber failure would be to (A) any shares prevent the Merger from qualifying for "pooling of its capital stock interests" accounting treatment or as a "reorganization" within the meaning of any class, Rights or any Voting Debt, Section 368(a) of the Code or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class, Rights, any Voting Debt or any other property or assets (other than shares of Company Common Stock and associated Rights issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans); or (ii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire or encumber any material property or material assets (including capital stock of cause any of its Subsidiaries) or businessrepresentations and warranties herein to become untrue in any material respect;
(d) neither it nor any of its Subsidiaries shall restructure, recapitalize, reorganize or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the operation of its assets or businesses or adopt resolutions providing for or authorizing any of the foregoing;
(e) neither it nor any of its Subsidiaries shall acquire (i) by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, except purchases of inventory and raw materials in the ordinary course of business (or as permitted by Section 7.1(g), whether or not material);
(f) neither it nor any of its Subsidiaries shall (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business), (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(g) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters);
(h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measures;
(l) neither it nor any of its Subsidiaries shall make or rescind any material Tax election, amend any material Tax Return or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, in each case except in a manner consistent with past practice or as required by applicable Law;
(m) other than with respect to any actions permitted under Section 7.2, neither it nor any of its Subsidiaries shall take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VIII not being satisfied; and
(n) neither it nor any of its Subsidiaries will authorize any ofauthorize, or commit, resolve or agree, in writing or otherwise, enter into an agreement to take, do any of the foregoing actionsforegoing; providedand
(v) each shall cause its respective Affiliates not to knowingly take or fail to take any action which it has agreed to do, howeveror not do, herein.
(b) STI and the Company agree that nothing contained in any written approval obtained under this Agreement shall give to Parent, directly Section 6.1 may be relied upon by the other party if signed by the President or indirectly, rights to control or direct the operations another executive officer of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operationsother party.
Appears in 1 contract
Interim Operations. The Company covenants (a) From and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless earlier of the termination of this Agreement or the consummation of the Merger, the businesses of the Company and its Subsidiaries shall be operated and conducted in the ordinary course, except as otherwise contemplated by this Agreement, as set forth in Schedule 7.1 of the Company Disclosure Letter, as required by applicable Laws or as Parent shall otherwise consent in writing, writing (which consent shall not be unreasonably be withheld, conditioned or delayed). Parent shall not take or permit any of its Subsidiaries (including, for the purpose of this sentence, the Company or its Subsidiaries) to take any action or omit to take any action that is reasonably likely to (i) result in any of the conditions of the Merger set forth in Article VIII not being satisfied or (ii) prevent the consummation of the Merger. Without limiting the generality of the foregoing, from and except as otherwise expressly contemplated by after the date hereof and prior to the earlier of the termination of this Agreement or as set forth in this Agreement):
(a) the business consummation of it the Merger, the Company shall not, and shall not permit any of its Subsidiaries shall be conducted in the ordinary and usual course andto, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, strategic partners, creditors, lessors, employees and business associates;
(b) it shall not (i) issue, sell, pledge, grant, transfer, encumber or otherwise dispose of or encumber any shares of capital stock owned by it in or other equity interests of the Company or any of its Subsidiaries; (ii) amend its certificate of incorporation or by-laws; (iii) other than in the case of wholly-owned subsidiaries, split, combine or reclassify its outstanding shares of capital stock; (iv) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, other than dividends from its direct or indirect wholly-owned Subsidiaries; or (v) purchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(c) neither it nor any of its Subsidiaries shall (i) issue, sell, pledge, dispose of or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debt, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class, Rights, any Voting Debt or any other property or assets (other than shares of Company Common Stock and associated Rights issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans); or (ii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire or encumber any material property or material assets (including capital stock of any of its Subsidiaries) or business;
(d) neither it nor any of its Subsidiaries shall restructure, recapitalize, reorganize or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the operation of its assets or businesses or adopt resolutions providing for or authorizing any of the foregoing;
(e) neither it nor any of its Subsidiaries shall acquire (i) by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, except purchases of inventory and raw materials in the ordinary course of business (or as permitted by Section 7.1(g), whether or not material);
(f) neither it nor any of its Subsidiaries shall (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business), (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(g) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters);
(h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs equity interests of the Company or any of its Subsidiaries or places declare, set aside or pay any material restrictions on the ability dividend or other distribution payable in cash, stock or property (or any combination thereof) with respect to its capital stock or other equity interests (except dividends or other distributions in cash, stock or property paid by any direct or indirect wholly-owned Subsidiary of the Company to the Company or to any other direct or indirect wholly-owned Subsidiary of its Subsidiaries to impose any labor saving or other cost reduction measures;the Company).
(lb) neither it nor any of its Subsidiaries shall make or rescind any material Tax election, amend any material Tax Return or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, in each case except in a manner consistent with past practice or as required by applicable Law;
(m) other than with respect to any actions permitted under Section 7.2, neither it nor any of its Subsidiaries shall take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VIII not being satisfied; and
(n) neither it nor any of its Subsidiaries will authorize any of, or commit, resolve or agree, in writing or otherwise, to take, any of the foregoing actions; provided, however, that nothing Nothing contained in this Agreement shall is intended to give to ParentParent or Merger Sub, directly or indirectly, rights the right to control or direct the Company’s or its Subsidiaries’ operations of the Company prior to Closingthe Effective Time, and notwithstanding anything to the contrary contained in this Agreement, no consent of Parent or Merger Sub will be required with respect to any matter set forth in this Agreement to the extent the requirement of such consent would violate any applicable Law. Prior to Closingthe Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its operations and the operations of its and its Subsidiaries’ operations.
Appears in 1 contract
Samples: Merger Agreement (Voltari Corp)
Interim Operations. The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless Parent shall otherwise consent approve in writing, which consent shall not unreasonably be withheld, writing and except as otherwise expressly contemplated by this Agreement or as set forth in this Agreement):
(a) the its business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially its reasonable best efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, strategic partners, creditors, lessors, employees and business associates;
(b) it shall not (i) issueform or acquire (by means of transfer, sell, pledge, dispose of purchase or encumber otherwise) any capital stock owned by it in any of its Subsidiaries; (ii) amend its certificate articles of incorporation or by-lawslaws or amend, modify or terminate the Stock Plans, other than as expressly required hereunder (including, without limitation, as set forth in Section 6.10); (iii) other than in the case of wholly-owned subsidiaries, split, combine or reclassify its outstanding shares of capital stock; (iv) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, other than dividends from its direct or indirect wholly-owned Subsidiaries; or (v) purchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(c) neither it nor any of its Subsidiaries shall not (i) issue, sell, pledge, dispose of or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debtof, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class, Rights, class or any Voting Debt or any other property or assets (other than shares of Company Common Stock and associated Rights Shares issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans); or (ii) other than in the ordinary and usual course of business, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire of or encumber any material other property or assets or incur or modify any other material assets liability or modify any current material indebtedness; (iii) make or authorize or commit for any expenditures (including capital expenditures and expenditures relating to the use of Third-Party Intellectual Property Rights or the development, marketing or in-licensing of any products) or, by any means, make any acquisition of, or investment in, assets or stock of any other Person or entity in excess of its Subsidiaries(or reasonably likely to result in expenditures in excess of) $100,000 or business(iv) authorize or enter into any agreement or other commitment relating to the licensing of any of the Company's products or the marketing by the Company of a third-party's products;
(d) neither it nor shall not terminate, establish, adopt, enter into, make any of its Subsidiaries shall restructurenew grants or awards under, recapitalize, reorganize or completely or partially liquidate or adopt a plan of complete or partial liquidation amend or otherwise enter into modify, any agreement Compensation and Benefit Plans or arrangement imposing material changes increase the salary, wage, bonus or restrictions on other compensation or benefits of any employees except, in the operation case of its assets employees that are not executive officers or businesses or adopt resolutions providing for or authorizing any directors of the foregoingCompany, increases occurring in the ordinary and usual course of business (which shall include normal periodic performance reviews and related compensation and benefit increases);
(e) neither it nor will not (x) declare, set aside or pay any dividends on, or make any other distributions in respect of, any of its Subsidiaries shall acquire capital stock, (iy) by merging split, combine or consolidating with, or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and reclassify any of its Subsidiariescapital stock or issue or authorize the issuance of any other securities in respect of, taken as a wholein lieu of or in substitution for shares of its capital stock or (z) purchase, except purchases redeem or otherwise acquire any shares of inventory capital stock of the Company or any other securities thereof (other than the acquisition of shares surrendered in whole or partial satisfaction of the exercise price for any stock options outstanding on the date hereof and raw materials properly exercised in the ordinary course of business (accordance with their terms) or as permitted by Section 7.1(g)any rights, whether warrants or not material)options to acquire any such shares or other securities;
(f) neither it nor any of its Subsidiaries shall (i) incur any indebtedness for borrowed money not settle or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business), (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(g) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters);
(h) neither it nor any of its Subsidiaries shall make compromise any material changes in accounting methods, principles claims or practices, except insofar as may have been required by a change in GAAP or applicable Law litigation or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary and usual course of business consistent with past practice, enter into, renew, modify, amend, terminate, amend or terminate any of its material Contracts or waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subjectclaims;
(jg) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or make any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measures;
(l) neither it nor any of its Subsidiaries shall make or rescind any material Tax election, amend any material Tax Return election or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled canceled or terminated, in each case terminated except in a manner consistent with past practice or as required by applicable Lawthe ordinary and usual course of business;
(mh) other than it shall continue to take all actions reasonably necessary in connection with respect the continued leasing or subleasing of Building One, but shall not enter into any further agreements relating to the lease or sublease of such property;
(i) it shall continue to take all actions reasonably necessary in connection with the valuation of and sale of equipment in Building One, but shall not enter into any actions permitted under Section 7.2, neither agreements relating to the sale of any such equipment;
(j) it nor any of its Subsidiaries shall not incur additional indebtedness;
(k) it shall not take any action or omit to take any action that is reasonably likely would cause any of its representations and warranties herein to result become untrue in any of the conditions to the Merger set forth in Article VIII not being satisfiedmaterial respect; and
(nl) neither it nor any of its Subsidiaries will not authorize any of, or commit, resolve or agree, in writing or otherwise, enter into an agreement to take, do any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operationsforegoing.
Appears in 1 contract
Samples: Merger Agreement (Skyepharma PLC)
Interim Operations. The Except with Purchaser’s prior written consent (not to be unreasonably withheld, conditioned or delayed), Seller shall cause each of the Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior (i) to the Effective Time (unless Parent shall otherwise consent in writing, which consent shall not unreasonably be withheld, and except as otherwise expressly contemplated by this Agreement or as set forth in this Agreement):
(a) the conduct its business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and use its Subsidiaries shall use their respective commercially reasonable efforts to (A) preserve its business organization intact and organizations intact, (B) maintain its existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, strategic partners, creditors, lessors, employees and business associates, and (C) keep available the services of its present employees and agents; and (ii) not to (other than as set forth in the corresponding section of the Seller Disclosure Letter):
(a) amend its Organizational Documents;
(b) it shall not merge or consolidate with any other Person;
(ic) acquire assets outside of the ordinary course of business consistent with past practice from any other Person with a value or purchase price in the aggregate in excess of $50,000,000.00 or that would have any possibility of preventing or delaying the Closing beyond the Termination Date;
(d) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (ii) amend its certificate of incorporation or by-laws; (iii) other than in the case of wholly-owned subsidiariesof, splitgrant, combine or reclassify its outstanding shares of capital stock; (iv) declaretransfer, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, other than dividends from its direct or indirect wholly-owned Subsidiaries; or (v) purchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock OptionsEncumber, or permit any of its Subsidiaries to purchase or otherwise acquireauthorize the issuance, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(c) neither it nor any of its Subsidiaries shall (i) issue, sellsale, pledge, dispose of or encumber (A) any shares of its capital stock of any classdisposition, Rights or any Voting Debtgrant, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class, Rights, any Voting Debt or any other property or assets (other than shares of Company Common Stock and associated Rights issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans); or (ii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose guarantee or other Encumbrance of, abandon, cancel, surrender any Equity Interests of the Company or allow to lapse or expire or encumber any material property or material assets (including capital stock of any of its Subsidiaries) or business;
(d) neither it nor any of its Subsidiaries shall restructure, recapitalize, reorganize or completely or partially liquidate or adopt (other than the issuance of Equity Interests (i) by a plan of complete or partial liquidation or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the operation of its assets or businesses or adopt resolutions providing for or authorizing any wholly-owned Subsidiary of the foregoingCompany to the Company or another wholly-owned Subsidiary or (ii) by the Company to Seller), securities convertible or exchangeable into, or exercisable for, any Equity Interests or any options, warrants or other rights of any kind to acquire any such Equity Interests or such convertible or exchangeable securities;
(e) neither it nor create or incur any Encumbrance (other than a Permitted Encumbrance) on the assets of the Company or any of its Subsidiaries shall acquire (i) by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are materialthat, individually or in the aggregate, is material to the Company and or any of its Subsidiaries;
(f) make any loans, taken as a wholeadvances, except purchases guarantees or capital contributions to or investments in any Person, other than (x) any of inventory and raw materials the foregoing to or on behalf of the Company or any direct or indirect wholly-owned Subsidiary of the Company, or (y) in the ordinary course of business (consistent with past practice and which do not have any possibility of preventing or as permitted by Section 7.1(g), whether or not material)delaying the Closing beyond the Termination Date;
(fg) neither it nor declare, set aside, make or pay any (i) cash distributions or dividends in any month that in the aggregate are in excess of the lesser of (A) $150,000,000.00 and (B) the amount of Free Cash Flow generated by the Company and its Subsidiaries for the preceding month, prorated for the month in which this Agreement is entered into, and for the month in which the Closing occurs; provided, that if distributions or dividends in respect of any month shall have been less than $150,000,000.00 as a result of the foregoing limitation or otherwise, Seller shall be entitled to make additional cash distributions at any time or from time to time up to an amount equal to the lesser of (x) Free Cash Flow for the period since the date of this Agreement and (y) the product of (A) $150,000,000.00 and (B) the number of whole and, without duplication, partial months in such period, or (ii) non-cash distributions or dividends, payable in stock, property or otherwise, with respect to any of its Subsidiaries shall Equity Interests (except for non-cash distributions paid by any direct or indirect wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiary) or enter into any agreement with respect to the voting of its Equity Interests;
(h) (i) incur any indebtedness Indebtedness for borrowed money money, or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business), (ii) issue, issue or sell or amend any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for Indebtedness incurred in the ordinary course of business consistent with past practice that is satisfied in full at or prior to the Closing, or (ii) amend, modify, supplement or waive the terms of any existing Indebtedness, debt securities or warrants or other rights to acquire debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(g) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters);
(h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice;
(i) except as contemplated by the capital budget set forth in the business plan set forth on Schedule 4.16 of the Seller Disclosure Letter, enter intomake or authorize any payment of, renewor accrual or commitment for, modifycapital expenditures in excess of $25,000,000.00 in the aggregate in any consecutive six-month period (or $50,000,000.00 in the event of an increase in data demand in the Business significantly in excess of the demand anticipated on the date hereof);
(j) amend, amendsupplement, waive, terminate, waiveassign, delay the exercise ofconvey, release encumber or assign any material otherwise transfer, in whole or in part, its rights or claims underinterests under or in any Material Contract, or enter into any Company Material Intercompany Contract or Company Lease Contract that would be a Material Contract if in a effect as of the date hereof;
(k) enter into any Intercompany Contract or amend, modify or waive any Intercompany Contract in any manner materially adverse to Parent; provided, that, nothing herein shall permit that would result in the Company or any of its Subsidiaries paying to the other parties thereto aggregate consideration greater than that provided for in the copies of Intercompany Contracts provided to Purchaser pursuant to Section 4.2(a)(v);
(l) make any changes with respect to material financial accounting policies or procedures, except as required by changes in GAAP;
(m) (i) enter into any Contract line of business in any geographic area other than the current lines of business of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of and its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ixand products and services reasonably ancillary thereto (including ancillary Internet services), or (ii) except to the extent permitted by Section 7.2(a) including any current line of this Agreementbusiness and products and services reasonably ancillary thereto, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign in any material rights or claims under, any confidentiality, standstill or similar agreement to geographic area for which the Company or any of its Subsidiaries is bound by currently holds a FCC License authorizing the conduct of such business, product or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change service in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreementsuch geographic area, (ii) take any action with respect toexcept as currently conducted, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for engage in the benefit or welfare conduct of any current business in any state that would require the receipt or former directortransfer of a Communications License or any other License issued by any Governmental Entity authorizing operation or provision of any communication services or foreign country that would require the receipt or transfer of, officeror application for, employee a License to the extent such License would reasonably be expected to prevent, materially delay or consultantmaterially impair the consummation of the Transaction, or (iii) enter into any business or operations outside of the United States;
(n) file for any Company License the receipt of which would reasonably be likely to prevent, materially impair or materially delay consummation of the Transaction;
(o) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $15,000,000.00;
(p) except actions in to the ordinary course extent otherwise required by Law, make or change any Tax election, change any method of business Tax accounting or settle or finally resolve any controversy with respect to individual employment or severance agreements Taxes for employees below an amount that materially exceeds the level of Vice President, (iii) increase in any amount reserved with respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases thereto in the ordinary course of business given to employees below the level of Vice President most recent Financial Statements, in each case, if such action would have an adverse affect on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above)Purchaser that is more than immaterial;
(kq) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of (i) any Communications Licenses or wireless spectrum and (ii) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice), any other Licenses, assets, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries that are material to the Business, other than pursuant to Company Contracts in effect prior to the date hereof;
(r) other than as may be required by applicable Law or pursuant to the existing terms and conditions of any Benefit Plan as in effect on the date hereof, (i) terminate, establish, adopt or amend any Benefit Plan other than the adoption of annual Benefit Plans in the ordinary course of business consistent with past practice and amendments to health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (ii) grant any salary or wage increase, other than to increase salary and wages for employees by no more than 4% in the aggregate in the ordinary course of business consistent with past practice, (iii) pay aggregate bonus or incentive compensation other than in the ordinary course consistent with past practice, (iv) (x) grant any new compensation award, other than bonus awards and cash-based long term incentive compensation awards, in each case in amounts and on terms that are in the ordinary course of business consistent with past practice; provided, however, that notwithstanding any other provision of this Agreement, neither no new awards shall be granted under the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measures;
(l) neither it nor any of its Subsidiaries shall make or rescind any material Tax election, amend any material Tax Return or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, in each case except in a manner consistent with past practice or as required by applicable Law;
(m) other than with respect to any actions permitted under Section 7.2, neither it nor any of its Subsidiaries shall take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VIII not being satisfied; and
(n) neither it nor any of its Subsidiaries will authorize any of, or commit, resolve or agree, in writing or otherwise, to take, any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operations.Phantom Share Plan,
Appears in 1 contract
Samples: Stock Purchase Agreement
Interim Operations. The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior Prior to the Effective Time Time, except as set ------------------ forth in the Company Disclosure Letter or as contemplated by any other provision of this Agreement, unless Sub has consented in writing thereto, the Company:
(unless Parent shall otherwise consent in writing, which consent shall not unreasonably be withheldi) shall, and except as otherwise expressly contemplated by this Agreement or as set forth in this Agreement):
(a) the business shall cause each of it and its Subsidiaries shall be conducted in the ordinary and usual course andto, to the extent consistent therewith, it and conduct its Subsidiaries shall use their respective commercially reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, strategic partners, creditors, lessors, employees operations and business associatesaccording to their usual, regular and ordinary course consistent with past practice;
(bii) it shall not (i) issueuse its best efforts, sell, pledge, dispose of or encumber any capital stock owned by it in any and shall cause each of its Subsidiaries; Subsidiaries to use its best efforts, to preserve intact their business organizations and goodwill, keep available the services of their respective officers and employees and maintain satisfactory relationships with those persons having business relationships with them;
(iiiii) shall not, and shall cause its Subsidiaries not to, amend its certificate their respective Articles of incorporation Incorporation or by-laws; (iii) other than in the case of wholly-owned subsidiaries, split, combine laws or reclassify its outstanding shares of capital stock; comparable governing instruments;
(iv) declareshall promptly notify Sub of (x) any material change in its condition (financial or otherwise), set aside business, prospects, properties, assets, liabilities or pay the normal course of its business or of its properties, (y) any dividend payable in cashmaterial litigation or material governmental complaints, stock investigations or property in respect hearings (or communications indicating that the same may be contemplated), or (z) the breach of any capital stock, other than dividends from its direct representation or indirect wholly-owned Subsidiaries; or warranty contained herein;
(v) purchaseshall promptly deliver to Sub correct and complete copies of any report, redeem statement or otherwise acquire, except for schedule filed with the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options SEC subsequent to the extent required or permitted under the terms date of such Company Stock Optionsthis Agreement;
(vi) shall not, or and shall not permit any of its Subsidiaries to, authorize, propose or announce an intention to purchase authorize or otherwise acquirepropose, or enter into an agreement with respect to, any shares of its capital stock merger, consolidation or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(c) neither it nor any of its Subsidiaries shall (i) issue, sell, pledge, dispose of or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debt, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class, Rights, any Voting Debt or any other property or assets business combination (other than shares the Merger), release or relinquishment of Company Common Stock and associated Rights issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans); or (ii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire or encumber any material property contract rights, or material assets (including capital stock any acquisition or disposition of any of its Subsidiaries) or business;
(d) neither it nor any of its Subsidiaries shall restructure, recapitalize, reorganize or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the operation of its assets or businesses or adopt resolutions providing for or authorizing any of the foregoing;
(e) neither it nor any of its Subsidiaries shall acquire (i) by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, except purchases of inventory and raw materials in the ordinary course of business (or as permitted by Section 7.1(g), whether or not material);
(f) neither it nor any of its Subsidiaries shall (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business), (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(g) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter 100,000 in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters);
(h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); provided;
(vii) shall not, however, that notwithstanding any other provision of this Agreement, neither the Company nor and shall not permit any of its Subsidiaries shall enter into to, (x) grant, confer or award any settlement options, warrants, conversion rights or other rights, not existing on the date hereof, to acquire any shares of its capital stock or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs other securities of the Company or its Subsidiaries or (y) accelerate, amend or change the period of exercisability of options or restricted stock granted under any employee stock plan or, except as contemplated by Section 4.3(a)(i), authorize cash payments in exchange for any options granted under any of such plans;
(viii) shall not, and shall not permit any of its Subsidiaries or places to, amend in any material restrictions respect the terms of the Benefit Plans, including, without limitation, any employment, severance or similar agreements or arrangements in existence on the ability of the Company date hereof, or adopt any new employee benefit plans, programs or arrangements or any employment, severance or similar agreements or arrangements;
(ix) shall not, and shall not permit any of its Subsidiaries to impose (x) increase or agree to increase the compensation payable or to become payable to its officers or, other than increases in accordance with past practice which are not material, to its employees or (y) enter into any labor saving or other cost reduction measurescollective bargaining agreement;
(lx) neither it nor shall not, and shall not permit any of its Subsidiaries to, (x) incur, create, assume or otherwise become liable for borrowed money or assume, guarantee, endorse or otherwise become responsible or liable for the obligations of any other individual, corporation or other entity or (y) make any loans or advances to any other person, except in the case of clause (x) for borrowings under existing credit facilities in the ordinary course of business and, except in the case of clause (y) for advances consistent with past practice which are not material;
(xi) shall make not, and shall not permit any of its Subsidiaries to, (x) materially change any practice with respect to Taxes, (y) make, change or rescind revoke any material Tax election, amend or (z) settle or compromise any material dispute involving a Tax Return or liability;
(xii) shall not, and shall not permit any insurance policy naming it as a beneficiary of its Subsidiaries to, (x) declare, set aside or loss-payable payee pay any dividend or make any other distribution or payment with respect to be cancelled any shares of its capital stock or terminatedother ownership interests or (y) directly or indirectly redeem, purchase or otherwise acquire any shares of its capital stock or capital stock of any of its Subsidiaries, or make any commitment for any such action or (z) split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in each case except lieu of or in substitution for shares of its capital stock;
(xiii) shall not, and shall not permit any of its Subsidiaries to, issue, deliver, sell, pledge or otherwise encumber any shares of its capital stock, any other securities or any securities convertible into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities (other than the issuance of shares of Company Common Stock upon the exercise of Company Stock Options outstanding on the date hereof in accordance with their present terms);
(xiv) shall not, and shall not permit any of its Subsidiaries to, make or agree to make any capital expenditure or expenditures with respect to property, plant or equipment which, individually or in a manner series of related transactions, is in excess of $100,000 or, in the aggregate, are in excess of $500,000 except as otherwise in the ordinary course of business consistent with past practice in order to satisfy actual or expected contractual commitments to customers;
(xv) shall not, and shall not permit any of its Subsidiaries to, change any accounting principles or practices;
(xvi) shall not, and shall not permit any of its Subsidiaries to, pay, discharge, settle or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction, in the ordinary course of business consistent with past practice or as required by applicable Law;in accordance with their terms, of liabilities reflected or reserved against in the most recent consolidated financial statements (or the notes thereto) of the Company included in the Company Reports or incurred thereafter in the ordinary course of business consistent with past practice, or waive any material benefits of, or agree to modify in any material respect, any confidentiality, standstill, non-solicitation or similar agreement to which the Company or any Subsidiary is a party; and
(mxvii) other than with respect to any actions permitted under Section 7.2shall not, neither it nor and shall not permit any of its Subsidiaries shall take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VIII not being satisfied; and
(n) neither it nor any of its Subsidiaries will authorize any oftake, or commit, resolve or agree, agree (in writing or otherwise, ) or resolve to take, any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operations.
Appears in 1 contract
Samples: Merger Agreement (MTL Inc)
Interim Operations. The Company ICE and NYBOT each covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms (unless Parent ICE (in the case of NYBOT) or NYBOT (in the case of ICE) shall otherwise consent approve in writing, which consent shall not unreasonably be withheld, and except as otherwise expressly contemplated by this Agreement or or, in the case of NYBOT, except as otherwise set forth in this AgreementSection 6.1 of the NYBOT Disclosure Letter or, in the case of ICE, except as otherwise set forth in Section 6.1 of the ICE Disclosure Letter):
(a) the business of it and its Subsidiaries shall be conducted in the ordinary and usual course consistent with past practice and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable best efforts to preserve its business organization intact and maintain its existing relations and goodwill with all Governmental Entities, Self-Regulatory Organizations, providers of order flow, customers, suppliers, distributors, strategic partners, creditors, lessors, employees and Employees, business associates, Members and stockholders, as appropriate;
(b) it shall not (i) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (ii) amend its certificate of incorporation or by-laws; (iii) other than in the case of wholly-owned subsidiaries, split, combine or reclassify its outstanding shares of capital stock; (iv) declare, set aside or pay any dividend type of dividend, whether payable in cash, stock or property property, in respect of any Membership Interests or capital stock, as appropriate, other than than, in the case of ICE, dividends from its payable by direct or indirect wholly-wholly owned Subsidiaries; Subsidiaries of ICE to ICE or (v) purchaseother direct or indirect wholly owned Subsidiaries of ICE and, redeem or otherwise acquirein the case of NYBOT, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price dividends payable by such holder upon exercise direct or indirect wholly owned Subsidiaries of Company Stock Options NYBOT to NYBOT or other direct or indirect wholly owned Subsidiaries of NYBOT;
(c) in the extent required or permitted under the terms case of such Company Stock OptionsNYBOT, or permit any of neither it nor its Subsidiaries to purchase or otherwise acquireshall:
(i) issue any new Membership Interests, any shares of its other membership interests, capital stock or any securities convertible into or exchangeable or exercisable for any membership interests or shares of its capital stock, Trading Rights, other trading permits or trading rights, or any lease rights;
(cii) neither it nor any of its Subsidiaries shall (i) issue, sell, pledge, dispose of or encumber (A) encumber, split, combine or reclassify, or repurchase, redeem or acquire any shares of its outstanding Membership Interests, other membership interests, capital stock of any class, Rights or any Voting Debt, or (B) securities convertible into or exchangeable or exercisable forfor any membership interests or shares of capital stock, Permits, Trading Rights, other trading permits or trading rights, or optionsany lease rights;
(iii) make any structural changes to NYBOT Clearing Corporation, warrantsagree to (other than in the ordinary course of business) list or clear any additional products or markets, callschange its risk policies or reduce its guaranty fund, commitments liquidity or rights credit resources;
(iv) except as required by applicable Law or as set forth on Section 6.1(c)(iv) of the NYBOT Disclosure Letter, (A) terminate, establish, adopt, enter into, make any kind to acquirenew grants or awards under, amend or otherwise modify, any shares of its capital stock of any classNYBOT Benefit Plan, Rightsas the case may be, any Voting Debt or any other property or assets (other than shares of Company Common Stock and associated Rights issuable pursuant to options and other stock-based awards outstanding arrangement that would be a NYBOT Benefit Plan if in effect on the date hereof under the Company Stock Plans); hereof, or (iiB) increase the salary, wage, bonus, pension, welfare, severance or other compensation of any employees or fringe benefits of any director, officer or employee or enter into any contract, agreement, commitment or arrangement to do any of the foregoing, except increases occurring in the ordinary and usual course of business consistent with past practice, or (C) provide for the grant of any stock option, restricted stock, restricted stock unit or other equity-related award, or (D) pay any change of control or severance benefits to any NYBOT director or Employee in connection with the Merger, or grant or provide for any severance, change in control or termination payments or benefits to any director, officer or employee of NYBOT or any of its Subsidiaries, or (E) take any action to accelerate the vesting or payment, or fund or in any way secure the payment, of compensation or benefits under any NYBOT Benefit Plan, to the extent not already provided in the any such NYBOT Benefit Plan, or (F) change any actuarial or other assumptions used to calculate funding obligations with respect to the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP, or (G) establish, adopt, enter into or amend any collective bargaining agreement or (H) terminate any officer, other than for cause, in which case NYBOT shall promptly notify ICE of such termination;
(v) except in the ordinary and usual course of business consistent with past practice, settle or compromise any material claims or litigation or modify, amend or terminate any of its material Contracts or waive, release or assign any material rights or claims;
(vi) other than in the ordinary and usual course of business, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire of or encumber any other material property or material assets (including membership interests or capital stock of any of its Subsidiaries) or business;
(d) neither it nor any of its Subsidiaries shall restructure, recapitalize, reorganize or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the operation of its assets or businesses or adopt resolutions providing for or authorizing any of the foregoing;
(e) neither it nor any of its Subsidiaries shall acquire (i) by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, except purchases of inventory and raw materials in the ordinary course of business (or as permitted by Section 7.1(g), whether or not material);
(f) neither it nor any of its Subsidiaries shall (ivii) incur any additional material indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business), (ii) issue, sell or amend any debt securities or warrants or other rights to acquire liability or modify any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” material indebtedness or other agreement to maintain liability or modify any financial statement condition of another Person material indebtedness or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) liability other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(gviii) neither it nor any of its Subsidiaries shall make or authorize or commit to any capital expenditures (other than under its current business plan as disclosed to ICE prior to the date of this Agreement), acquisitions or other expenditures with respect to property, plant or equipment in excess types of $10 million per quarter in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters)non-ordinary-course transactions;
(h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (iiix) except for a platform license and service agreement with ICE, which shall provide that ICE shall license ICE’s electronic trading platform to the extent permitted by Section 7.2(a) NYBOT for a minimum period of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein 18 months from and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of after the date of this Agreement under any Company Benefit Planand that the costs of operation shall not exceed $3 million per year, (vi) and which shall contain such other than with respect to existing commitments commercially reasonable terms as of mutually agreed by ICE and NYBOT as soon as reasonably practicable after the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions (and in any benefit plans event within 45 days after the date of this Agreement) (the “Platform License Agreement”), enter into any agreement to trade any products on an electronic trading platform or agreements that would restrict NYBOT’s or awards made thereunder, or (vii) take its Subsidiaries’ ability to trade any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Planproduct on an electronic trading platform; provided, however, this Section 7.1(jif ICE and NYBOT are not able to reach agreement on the terms of the Platform License Agreement in accordance with the foregoing, NYBOT may, at its own expense, license an electronic trading platform from an alternate system vendor, provided that (A) such license agreement is terminable by NYBOT as of the Closing and (B) all costs associated with such license agreement from and after the Closing shall not prevent be deducted from the Company or any calculation of its Subsidiaries from the Closing Cash Amount;
(x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measures;
(l) neither it nor any of its Subsidiaries shall make or rescind change any material Tax election, amend change any material method of Tax Return accounting, file any materially amended Tax Return, or settle or compromise any material audit or proceeding relating to Taxes or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, in each case terminated except in a manner the ordinary and usual course of business;
(xi) permit any change in its credit practices or accounting principles, policies or practice (including any of its practices with respect to accounts receivable or accounts payable), except to the extent that any such changes in accounting principles, policies or practices shall be required by changes in GAAP;
(xii) enter into any “non-compete” or similar Contract that would restrict the business of the Surviving Corporation or any of its Affiliates following the Effective Time;
(xiii) except as permitted pursuant to Section 6.1(c)(iv) of the NYBOT Disclosure Letter, enter into any Contract between itself, on the one hand, or any of its Affiliates, employees, officers or directors, on the other hand;
(xiv) (A) amend or modify any of the NYBOT Organizational Documents or the NYBOT Subsidiary Organizational Documents, except for rule amendments or modifications that are consistent with past practice practice, that are not material and that would not become Core Rights (as defined in the Bylaws) or as required by applicable Law;
(mB) other than file with respect the CFTC any notice of such amendment or modification unless it shall simultaneously provide a written copy of such application to any actions permitted under Section 7.2, neither it nor any of its Subsidiaries shall take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VIII not being satisfiedICE; and
(nxv) neither it NYBOT nor any of its Subsidiaries will authorize any of, or commit, resolve or agree, in writing or otherwise, enter into an agreement to take, do any of the foregoing actions; provided, however, that nothing contained set forth in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with Sections 6.1(c)(i) – (xiv) if NYBOT would be prohibited by the terms and conditions of Sections 6.1(c)(i) – (xiv) from doing the foregoing. Notwithstanding anything to the contrary in this Agreement, complete control ICE shall have the right to agree to and supervision to consummate any acquisitions of another Person, including by agreeing to issue equity interests in ICE to such Person.
(d) In the case of NYBOT, it shall, and shall cause its Subsidiaries to, preserve their respective existing regulatory status in all jurisdictions, and shall not make any material change to their respective regulatory status in any jurisdiction.
(e) Prior to making any written or oral communications to the directors, officers or employees of NYBOT or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, NYBOT shall provide ICE with a copy of the intended communication, ICE shall have a reasonable period of time to review and its Subsidiaries’ operations.comment on the communication, and ICE and NYBOT shall cooperate in providing any such mutually agreeable communication
Appears in 1 contract
Interim Operations. The Company NYSE Group and Euronext each covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms, unless NYSE Group (unless Parent in the case of Euronext) or Euronext (in the case of NYSE Group) shall otherwise consent approve in writing, which consent shall not unreasonably be withheld, and except as otherwise expressly contemplated by this Agreement or or, in the case of Euronext, except as otherwise set forth in this Agreement):Schedule 7.1 of the Euronext Disclosure Letter or, in the case of NYSE Group, except as otherwise set forth in Schedule 7.1 of the NYSE Group Disclosure Letter:
(a) the business of it and its Subsidiaries shall be conducted in the ordinary and usual course consistent with past practice and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable best efforts to preserve its business organization intact and maintain its existing relations and goodwill with all Governmental Entities (including the SEC and the European Regulators and other Euronext stock market regulators), providers of order flow, customers, suppliers, distributors, strategic partners, creditors, lessors, employees Employees and business associatesstockholders, as appropriate;
(b) (i) it shall not (i) issue, sell, pledge, dispose of or encumber any capital stock stock, as appropriate, owned by it in any of its Subsidiaries; (ii) except as set forth in Article IV of this Agreement and except as required to pay the Special Euronext Distribution, it shall not amend its certificate of incorporation incorporation, articles of association or by-lawsbylaws, as applicable; (iii) other than in the case of wholly-owned subsidiaries, it shall not split, combine or reclassify its outstanding shares of capital stock; (iv) except for the payment of the Special Euronext Distribution, it shall not declare, set aside or pay any dividend type of dividend, whether payable in cash, stock or property property, in respect of any capital stock, as appropriate, other than dividends from payable by its direct or indirect wholly-wholly owned Subsidiaries to it or another of its direct or indirectly wholly owned Subsidiaries; or (v) purchaseit shall not repurchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, or permit any of its Subsidiaries to purchase or otherwise acquire, any interests or shares of its capital stock stock, as applicable, or any securities convertible into or exchangeable or exercisable for any shares of its capital stock, as applicable;
(c) neither it nor any of its Subsidiaries shall (i) except for the issuance of Euronext Stock Options and Euronext Stock-Based Awards authorized at the annual general meeting of Euronext on May 23, 2006, issue, sell, pledge, dispose of or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debtof, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class, Rightsas appropriate, or any Voting Debt bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with its stockholders on any matter or any other property or assets (other than shares of Company NYSE Group Common Stock and associated Rights or Euronext Shares (or Euronext Paris ordinary shares, as the case may be) issuable pursuant to options and other stock-based awards outstanding on or awarded prior to the date hereof under the Company NYSE Group Stock Plans or Euronext Stock Plans); or (ii) other than in the ordinary and usual course of business, transfer, lease, license, guarantee, acquire, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire of or encumber any other material property or material assets (including capital stock of any of its Subsidiaries); (iii) incur any indebtedness for borrowed money (including any guarantee of such indebtedness); or business(iv) make or authorize or commit for any capital expenditures, except as provided in the business plan for each of NYSE Group and Euronext, respectively, that has been provided to the other prior to the date of this Agreement (provided that each of NYSE Group and Euronext shall be permitted to make or authorize or commit for any capital expenditures in an amount that is between 90% and 110% of the amounts set forth in such party’s respective business plan);
(d) neither it nor any of its Subsidiaries shall restructure(i) terminate, recapitalizeestablish, reorganize adopt, enter into, make any new grants or completely or partially liquidate or adopt a plan of complete or partial liquidation awards under, amend or otherwise modify, any Benefit Plan, as the case may be, or any other arrangement that would be a NYSE Group Benefit Plan or a Euronext Benefit Plan if in effect on the date hereof other than offer letters provided to newly-hired employees (but excluding offer letters to executive officers of it and its Subsidiaries or to employees whose target compensation is in excess of $700,000); provided that such offer letters do not include any compensation or benefits that vest, accelerate or otherwise are affected by or result in any payment or funding in connection with any of the transactions contemplated by this Agreement (including without limitation upon signing, closing, shareholder approval of or any other event closely associated with the Offer, the Merger or the Post-Closing Reorganization) either alone or in conjunction with any other event, or (ii) except for the issuance of Euronext Stock Options and Euronext Stock-Based Awards authorized at the annual general meeting of Euronext on May 23, 2006 and increases occurring in the ordinary and usual course of business consistent with past practice (which shall include normal periodic performance reviews and related increases of annual base salaries not to exceed 7% in the aggregate), increase the salary, wage, bonus or other compensation of any employees or fringe benefits of any director, officer or employee or enter into any agreement contract, agreement, commitment or arrangement imposing material changes or restrictions on the operation of its assets or businesses or adopt resolutions providing for or authorizing to do any of the foregoingforegoing or (iii) enter into or renew any contract, agreement, commitment or arrangement (other than a renewal occurring in accordance with the terms thereof) providing for the payment to any director, officer or employee of such party of compensation or benefits contingent, or the terms of which are materially altered, in connection with any of the transactions contemplated by this Agreement (including without limitation upon signing, closing, shareholder approval of or any other event closely associated with the Offer, the Merger or the Post-Closing Reorganization) either alone or in conjunction with any other event or (iv) provide, with respect to the grant of any stock option, restricted stock, restricted stock unit or other equity-related award (or with respect to any outstanding equity-related award) that the vesting of any such stock option, restricted stock, restricted stock unit or other equity-related award or any Benefit Plan shall accelerate or otherwise be affected by or result in any payment or funding in connection with any of the transactions contemplated by this Agreement (including without limitation upon signing, closing, shareholder approval of or any other event closely associated with the Offer, the Merger or the Post-Closing Reorganization) either alone or in conjunction with any other event;
(e) except in the ordinary and usual course of business consistent with past practice, neither it nor any of its Subsidiaries shall acquire (i) by merging settle or consolidating withcompromise any material claims or litigation, or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and neither it nor any of its SubsidiariesSubsidiaries shall modify, taken as a wholeamend or terminate any of its material Contracts or waive, except purchases of inventory and raw materials in the ordinary course of business (release or as permitted by Section 7.1(g), whether assign any material rights or not material)claims;
(f) neither it nor any of its Subsidiaries shall (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business), (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(g) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters);
(h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measures;
(l) neither it nor any of its Subsidiaries shall make or rescind change any material Tax election, amend change any material method of Tax Return accounting, file any materially amended Tax Return, or settle or compromise any material audit or proceeding relating to Taxes; or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, in each case terminated except in a manner consistent with past practice or as required by applicable Lawthe ordinary and usual course of business;
(mg) other than neither it nor any of its Subsidiaries shall permit any change in its credit practices or financial accounting principles, policies or practice (including any of its practices with respect to accounts receivable or accounts payable), except to the extent that any actions such changes in financial accounting principles, policies or practices shall be required by changes in GAAP (in the case of NYSE Group) or IFRS (in the case of Euronext);
(h) neither it nor any of its Subsidiaries shall enter into any “non-compete” or similar Contract that would materially restrict the business of Holdco or any of its Subsidiaries following the Effective Time;
(i) except as permitted under pursuant to Section 7.27.1(d), neither it nor any of its Subsidiaries shall take enter into any action or omit to take any action that is reasonably likely to result in Contract between itself, on the one hand, and any of its affiliates, employees, officers or directors, on the conditions to the Merger set forth in Article VIII not being satisfiedother hand; and
(nj) neither it nor any of its Subsidiaries will authorize any of, or commit, resolve or agree, in writing or otherwise, enter into an agreement to take, do any of the foregoing actions; providedset forth in Sections 7.1(a) - (i) if NYSE Group or Euronext, howeveras applicable, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with would be prohibited by the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operationsSections 7.1(a) - (i) from doing the foregoing.
Appears in 1 contract
Interim Operations. The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior until the earlier to occur of the termination of this Agreement pursuant to Article VIII and the Effective Time (unless Parent shall otherwise consent approve in writing, which consent approval in the case of clauses (c)(ii), (c)(iv), (c)(vi), (e), (f) and (k) below shall not be unreasonably be withheld, delayed or conditioned and except as otherwise expressly contemplated permitted or required by this Agreement or as set forth described in this AgreementSection 6.1 of the Company Disclosure Letter):
(a) the business of it and its Subsidiaries shall be conducted in the ordinary course and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, strategic partners, creditors, lessors, employees and business associatespast practice;
(b) it shall not (i) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (ii) amend its certificate of incorporation or by-lawspropose to amend the Company Charter or the Company Bylaws; (iii) other than in the case of wholly-owned subsidiaries, split, combine or reclassify its outstanding shares of capital stockstock or any class thereof; (iv) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, stock other than (A) dividends from its direct or indirect wholly-owned SubsidiariesSubsidiaries to the Company, or (B) dividends payable on the Series C Preferred Shares pursuant to and in accordance with the existing terms thereof; or (v) purchaserepurchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(c) neither it nor any of its Subsidiaries shall (i) issue, sell, pledge, dispose of or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debtof, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class, Rights, any Voting Debt or any other property or assets class (other than shares of Company Common Stock and associated Rights Shares issuable pursuant to options and other stock-based awards Company Options outstanding on the date hereof under the Stock Plans as set forth in Section 5.1(b) of the Company Stock PlansDisclosure Letter); or (ii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire or encumber or suffer to exist any material property Encumbrance (except for Permitted Encumbrances) in respect of, any assets in excess of $250,000 in the aggregate other than (A) sales of inventories (and/or licenses in connection therewith) in the ordinary course of business consistent with past practice and (B) dispositions of obsolete or material assets worthless assets; (iii) incur any indebtedness for borrowed money other than borrowings (including capital stock issuance of letters of credit) and reborrowings under its or any of its Subsidiaries' credit facilities, as such credit facilities are in existence as of the date hereof without regard to any subsequent amendment or modification, that would at any given time cause the net funded amount of indebtedness outstanding under such credit facilities to be in excess of $4,000,000 in the aggregate (the "Maximum Amount"); provided, however, that the Company may incur indebtedness under such credit facilities in excess of the Maximum Amount to the extent that the senior management of the Company reasonably determines that it is in the best interests of the Company to borrow such additional amounts in order to fund operations of the business of the Company and its Subsidiaries in the ordinary course; and provided, further that prior to taking any actions permitted by the foregoing proviso the Company shall give Parent three Business Days' prior written notice that it intends to take such actions; (iv) make or businesscommit for any capital expenditures in the aggregate in excess of the Company's budget for capital expenditures, in each case, for the applicable fiscal year; (v) loan, advance funds or make any investment in or capital contribution to any other Person other than to any Subsidiary; or (vi) acquire (by merger, consolidation, or acquisition of stock or assets) any Person;
(d) except as required by Law, neither it nor any of its Subsidiaries shall restructureterminate, recapitalizeestablish, reorganize or completely or partially liquidate or adopt a plan of complete or partial liquidation adopt, enter into, amend or otherwise enter into modify any agreement Company Compensation and Benefit Plans in a manner that would materially increase benefits thereunder or arrangement imposing material changes increase the salary, wage, bonus or restrictions on other compensation of any employees except salary increases as a result of employee promotions occurring in the operation ordinary course of its assets or businesses or adopt resolutions providing for or authorizing any of the foregoingbusiness consistent with past practices;
(e) neither it nor any of its Subsidiaries shall acquire (i) by merging settle or consolidating with, compromise any material claims or by purchasing all or a substantial portion litigation in excess of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or $250,000 in the aggregate, to the Company aggregate other than (A) settlements and any of its Subsidiaries, taken as a whole, except purchases of inventory and raw materials compromises in the ordinary course of business and (B) settlements and compromises of liabilities not in excess of $500,000 reflected or reserved against on the financial statements included in the Company Reports; or (ii) waive, release or assign any material rights or claims in excess of $250,000 in the aggregate other than in the ordinary course of business; provided, however, that the Company shall not settle any Governmental claims or proceedings if such settlement would result in suspension, debarment or injunctive relief that is material to the businesses of the Company and its Subsidiaries taken as permitted by Section 7.1(g), whether a whole or not material)that would otherwise materially affect Parent and its Affiliates;
(f) neither it nor any of its Subsidiaries shall (i) incur make any indebtedness for borrowed money material Tax election, change any annual Tax accounting period, adopt or guarantee change any such indebtedness material method of another Person (other than pursuant Tax accounting, extend or waive any applicable statute of limitations with respect to the Credit Agreement in the ordinary course of business), (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another PersonTaxes, enter into any “keep well” closing agreement in respect of any material Tax claim, audit or assessment, surrender any right to claim a material Tax refund, offset or other agreement to maintain reduction in a material Tax liability or settle or compromise any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange ratesmaterial Tax liability;
(g) neither it nor any use commercially reasonable efforts to (i) preserve intact its business organization and goodwill, (ii) keep available the services of its Subsidiaries shall make any capital expenditures or other expenditures present officers and key employees and (iii) preserve the goodwill and business relationships with respect to propertycustomers, plant or equipment in excess of $10 million per quarter in the aggregate for the Company suppliers and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters)others having business relationships with Company;
(h) neither it nor any of use commercially reasonable efforts to maintain with financially responsible insurance companies insurance on its Subsidiaries shall make any material changes tangible assets and its business in accounting methods, principles or practices, except insofar such amounts and against such risks and losses as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserveare consistent with past practice;
(i) neither it nor not enter into any plan of its Subsidiaries shallcomplete or partial liquidation, except in the ordinary course dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of other than the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted transactions contemplated by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject);
(j) neither it nor not alter, through merger, liquidation, reorganization, restructuring or any other fashion, the corporate structure or ownership of any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above)Company's Subsidiaries;
(k) except for matters identified as required by GAAP or as recommended in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail writing by the Company’s plans with 's independent auditors, (i) not revalue in any material respect thereto, neither the Company nor any of its Subsidiaries shall initiateassets, settle including writing down the value of inventory or compromise any litigation, claim, grievance, charge writing-off notes or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and accounts receivables other than in the ordinary course of business consistent with past practice); provided, howeveror (ii) change any method of accounting or accounting principles or practice;
(l) not (i) grant any material severance, that notwithstanding retention or termination pay to, or amend in any other provision material respect any existing severance, retention or termination arrangement with, any current or former director, officer or employee of this Agreement, neither the Company nor or any of its Subsidiaries shall Subsidiaries, (ii) except to the extent required under Contracts existing as of the date hereof, increase in any material respect or accelerate in any material respect the payment or vesting of, any benefits payable under any existing severance, retention or termination pay policies or employment agreements, (iii) enter into or amend in any settlement material respect any employment, consulting, deferred compensation or other similar agreement with any director, officer, consultant or employee of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places (iv) establish, adopt or amend (except as required by applicable law) any material restrictions on the ability collective bargaining agreement, bonus, profit-sharing, thrift, pension, retirement, post-retirement medical or life insurance, retention, deferred compensation, compensation, stock option, restricted stock or other benefit plan or arrangement covering any present or former director, officer or employee, or any beneficiaries thereof, of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measures;
(l) neither it nor any of its Subsidiaries shall make or rescind any material Tax election, amend any material Tax Return or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, in each case except in a manner consistent with past practice or as required by applicable Law;Subsidiaries; or
(m) other than with respect to any actions permitted under Section 7.2, neither it nor any of its Subsidiaries shall take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VIII not being satisfied; and
(n) neither it nor any of its Subsidiaries will authorize or enter into an agreement to do any ofof the foregoing, or commit, resolve or agree, in writing or otherwise, commit to take, any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operations.
Appears in 1 contract
Samples: Merger Agreement (Meggitt USA Inc)
Interim Operations. The Company covenants and agrees as to itself and its Subsidiaries that, from and after the date hereof execution of this Agreement and prior to the Effective Time (unless Parent shall otherwise consent approve in writing, which consent shall not unreasonably be withheld, writing and except as otherwise (i) required by applicable Law, (ii) expressly contemplated required by this Agreement or (iii) otherwise expressly disclosed in Section 6.1 of the Company Disclosure Letter), the Company shall use its commercially reasonable efforts to (A) conduct its business and the business of its Subsidiaries in the ordinary course of business consistent with past practice and (B) maintain the status of the Company as set forth a “real estate investment trust” within the meaning of Sections 856 through and including 860 of the Code (a “REIT”) for all taxable periods ending on or prior to the Closing Date. Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the Effective Time, except as (w) required by applicable Law, (x) Parent may approve in writing (such approval not to be unreasonably withheld, conditioned or delayed with respect to clauses (d), (f), (h), (i), (m), (n), (p), (r) or (s)), (y) expressly disclosed in Section 6.1 of the Company Disclosure Letter or (z) expressly provided for in this Agreement):, the Company shall not and will not permit any of its Subsidiaries to:
(a) the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, strategic partners, creditors, lessors, employees and business associates;
(b) it shall not (i) issueamend, sellsupplement or otherwise modify its articles of incorporation or bylaws (or comparable governing documents), pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (ii) amend its certificate of incorporation or by-laws; (iii) other than in the case of wholly-owned subsidiaries, split, combine combine, subdivide or reclassify its outstanding shares of capital stock; stock (ivexcept for any such transaction by a wholly owned Subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (iii) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock, stock (other than (A) any dividends from its or distributions paid by a direct or indirect whollywholly owned Subsidiary of the Company (other than a Taxable REIT Subsidiary) to another direct or indirect wholly owned Subsidiary of the Company or to the Company, (B) regular quarterly cash dividends not to exceed $0.15 per Share, with customary record and payment dates on the Shares in accordance with past practice (including, for the avoidance of doubt, any dividends or distributions declared and publicly announced on or prior to the date hereof), (C) any distributions of the Company and its Subsidiaries, including under Sections 857, 858 or 860 of the Code, as may be reasonably necessary to (I) maintain the status of the Company as a REIT or (II) avoid or reduce the imposition of any corporate level Tax or excise Tax under the Code and (D) dividend equivalents payable upon the vesting or settlement of Company Director-owned Subsidiaries; Granted RSUs, Company Service-Based RSUs and Company Market-Based RSUs), (iv) enter into any agreement with respect to the voting of its capital stock or (v) purchase, repurchase, redeem or otherwise acquire, except for the acquisition of acquire any shares of Company Common Stock from holders its capital stock or any securities convertible or exchangeable into or exercisable for any shares of Company Stock Options in full or partial payment of its capital stock, other than (A) pursuant to the exercise price payable by such holder upon cashless exercise of Company Stock Options or the forfeiture of, or withholding of Taxes with respect to, Company Options, Company Director-Granted RSUs, Company Service-Based RSUs or Company Market-Based RSUs in connection with any Taxable event related to the extent required or permitted under such awards, in each case, in accordance with past practice and with the terms of such the applicable Company Stock OptionsPlan as in effect on the date of this Agreement or (B) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company;
(b) merge or consolidate with any other Person, or permit restructure, reorganize or completely or partially liquidate;
(i) except as required by the terms of a Company Plan, (A) increase the compensation or benefits payable to any current or former employee, director or individual service provider of the Company or any of its Subsidiaries with an annual base salary greater than $100,000, (B) materially increase the compensation or benefits payable to purchase any current or former employee, director or individual service provider of the Company or any of its Subsidiaries with an annual base salary less than $100,000 or (C) become a party to, establish, adopt, amend, or make any change to any Company Plan or any arrangement that would have been a Company Plan had it been entered into prior to the date of this Agreement, other than related to annual plan renewals in the ordinary course of business or (ii) grant or make any bonus or other payment to any employee, director, executive officer or individual service provider of the Company or its Subsidiaries;
(d) hire any employees with an annual base salary greater than $100,000, other than any non-officer employees that are hired to replace any employees that were terminated or that resigned and that are provided total compensation and benefits substantially similar, in the aggregate, to the terminating employees being replaced;
(e) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (i) in the ordinary course of business consistent with past practice, borrowings under the Existing Credit Facilities as in effect as of the date hereof, (ii) inter-company Indebtedness among the Company and its wholly owned Subsidiaries, (iii)(A) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (B) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business or (iv) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice and not for speculative purposes; provided, that the Company and its Subsidiaries shall use commercially reasonable efforts to mitigate any material increase in their respective aggregate exposure to currency risk;
(f) make or commit to any capital expenditures other than in the ordinary course of business consistent with past practice and which do not exceed the amounts per line item reflected in the Company’s monthly capital expenditure projections for 2020 (pro-rated for any partial months during such period), which have previously been made available to Parent;
(g) other than with respect to (i) Contracts related to any REO Properties and (ii) other Company Properties that are set forth in Section 6.1(g) of the Company Disclosure Letter, in each case so long as such transactions are on bona fide, commercial, arms’ length terms to an unaffiliated party, transfer, lease (other than renewals and single-family home leases with tenants in the ordinary course of business consistent with past practice), license, sell, assign, mortgage, pledge, place a Lien (other than Permitted Liens) upon or otherwise acquiredispose of any properties or assets (including capital stock of any of its Subsidiaries but not including any Intellectual Property), (x) with a fair market value in excess of $200,000 individually or $2,000,000 in the aggregate (other than transactions among the Company and its wholly owned Subsidiaries) but for the avoidance of doubt subject in all respects to the additional restrictions of Section 6.15(a) with respect to Subject Company Properties, (y) that secure any of the Existing Credit Facilities other than to the extent the disposition thereof is permitted by the relevant Existing Credit Facility but for the avoidance of doubt subject in all respects to the additional restrictions of Section 6.15(a) with respect to Subject Company Properties, or (z) that would reasonably be expected to interfere with Merger Sub’s ability to obtain the Debt Financing; provided, that other than with respect to properties or assets referred to in clauses (i) and (ii) above, the Company shall promptly (and in any event within twenty-four (24) hours) deliver to Parent written notice of any license, sale, assignment, mortgage, pledge, or other disposition of any Company Properties;
(h) issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(c) neither it nor any of its Subsidiaries shall (i) issue, sell, pledge, dispose of or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debt, or (B) securities convertible into or exchangeable or exercisable for, or any options, warrants, calls, commitments warrants or other rights of any kind to acquire, any shares of its capital stock of such shares, except (i) for any class, Rights, any Voting Debt or any other property or assets (other than shares of Company Common Stock and associated Rights issuable Shares issued pursuant to options Company Options, Company Director-Granted RSUs, Company Service-Based RSUs and other stockCompany Market-based awards Based RSUs outstanding on the date hereof under of this Agreement in accordance with the terms of such awards and the Company Stock Plans); or , and (ii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender by wholly owned Subsidiaries to the Company or allow to lapse or expire or encumber any material property or material assets (including capital stock other wholly owned Subsidiary of any of its Subsidiaries) or businessthe Company;
(d) neither it nor any of its Subsidiaries shall restructure, recapitalize, reorganize or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the operation of its assets or businesses or adopt resolutions providing for or authorizing any of the foregoing;
(e) neither it nor any of its Subsidiaries shall acquire (i) by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, except purchases of inventory and raw materials in the ordinary course of business (or as permitted by Section 7.1(g), whether or not material);
(f) neither it nor any of its Subsidiaries shall (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement agreements forth in Section 6.1(i) of the ordinary course Company Disclosure Letter, acquire any business or assets or other property, whether by merger, consolidation, purchase of businessproperty or assets or otherwise;
(j) make any material change with respect to its financial accounting policies or procedures, except as required by changes in GAAP (or any interpretation thereof) or by applicable Law;
(k) enter into any new line of business or start to conduct a line of business of the Company or any of its Subsidiaries that is not conducted as of the date of this Agreement;
(l) make any loans, advances or capital contributions to, or investments in, any Person (other than loans, advances or capital contributions to the Company or any direct or indirect wholly owned Subsidiary of the Company);
(i) amend or modify in any material respect or terminate (excluding terminations upon expiration of the term thereof or upon default by any other party thereto, in each case, in accordance with the terms thereof) any Material Contract or waive, release or assign any material rights, claims or benefits under any Material Contract or take (or fail to take) any action that would reasonably be expected to cause or result in a material breach of, or material default under, any Material Contract or (ii) issueenter into any Contract that would have been a Material Contract had it been entered into prior to the date of this Agreement unless it is on terms substantially consistent with, sell or amend on terms more favorable to the Company or its Subsidiaries (and to Parent and its Subsidiaries following the Closing) than, either a Contract it is replacing or a form of such Material Contract made available to Parent prior to the date hereof; provided, this Section 6.1(m) shall not prohibit or restrict any debt securities action in respect of (A) Company Plans or warrants (B) the Existing Lender Consents (as defined in Section 6.1(m) of the Company Disclosure Letter);
(n) (A) settle any Proceeding before or threatened in writing to be brought before a Governmental Entity, other than settlements if the amount of any such settlement is not in excess of $250,000 individually or $1,000,000 in the aggregate; provided, that such settlements do not involve any non-de minimis injunctive or equitable relief or impose non-de minimis restrictions on the business activities of the Company and its Subsidiaries or Parent and its Subsidiaries or (B) waive any material right with respect to any material claim held by the Company or any of its Subsidiaries;
(o) enter into any collective bargaining agreement or recognize or certify any labor union, labor organization or other rights to acquire employee representative body as the bargaining representative for any debt securities employees of the Company or any of its Subsidiaries;
(p) make, guarantee change or revoke any debt securities material Tax election or change a material method of another PersonTax accounting, amend any material Tax Return, settle or compromise any material Tax liability, audit, proceeding, claim or assessment, enter into any “keep well” Tax allocation, sharing or indemnity agreement (other agreement to maintain any financial statement condition than customary provisions in agreements or arrangements the primary subject of another Person or which is not Taxes), enter into any arrangement having closing agreement in respect of material Taxes, seek or request any material Tax ruling from a Governmental Entity, file any material Tax Return inconsistent with past practice other than as required by applicable Law or contribute any assets to a Taxable REIT Subsidiary (other than any assets that are expected to be sold prior to the economic effect Closing Date and are otherwise permitted to be sold prior to the Closing Date pursuant to the terms of this Agreement);
(q) take any action, or fail to take any action, which action or failure to act would reasonably be expected to cause (i) the Company to fail to qualify as a REIT or (ii) any other Subsidiary of the Company to fail to preserve its status as set forth in Section 5.1(b)(iv) of the Company Disclosure Letter;
(r) terminate, cancel or make any material changes to the structure, limits or terms and conditions of any of its insurance policies, including allowing the foregoing, (iii) make any loans, advances (other than routine advances policies to employees of the Company and its Subsidiaries in the ordinary course of business) expire without renewing such policies or capital contributions toobtaining comparable replacement coverage, or investment inprejudicing rights to insurance payments or coverage;
(s) sell, assign, transfer or exclusively license any other Person, other than material Intellectual Property owned by the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) permit the lapse of any right, title or interest to any such material Intellectual Property, including any material Registered IP, in each case, other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(g) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters);
(h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (iit) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for of the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j6.1(t) of the Company Disclosure ScheduleLetter; or
(u) agree, amend resolve or accelerate the payment, right commit to payment or vesting of do any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Planforegoing. Notwithstanding the foregoing, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions nothing in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) 6.1 shall not prevent prohibit the Company or any of its Subsidiaries from (x) taking any action or refraining from taking any action, at any time or from time to time, that in the reasonable judgment of the board of directors of the Company, upon written advice of nationally recognized REIT Tax counsel, is reasonably necessary for the Company to avoid incurring entity-level U.S. federal income or U.S. federal excise Taxes under the Code or to maintain its qualification as a REIT for any period or portion thereof ending on or prior to the Closing DateEffective Time, paying awards under the 2006 Executive Incentive Plan and commissions including making dividend or other distribution payments to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) stockholders of the Company Disclosure Schedule, which shall in accordance with this Agreement (subject to the restrictions set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practiceSection 6.1(a)(iii)); provided, howeverthat prior to taking any such action, that notwithstanding any other provision of this Agreement, neither the Company nor any of and its Subsidiaries shall enter into any settlement inform Parent in writing of or compromise any litigation, claim, grievance, charge or proceeding that, whether at such action and shall consult with and cooperate with Parent in good faith to minimize the time adverse effect of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of such action to the Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measures;
(l) neither it nor any of its Subsidiaries shall make or rescind any material Tax election, amend any material Tax Return or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, in each case except in a manner consistent with past practice or as required by applicable Law;
(m) other than with respect to any actions permitted under Section 7.2, neither it nor any of its Subsidiaries shall take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VIII not being satisfied; and
(n) neither it nor any of its Subsidiaries will authorize any of, or commit, resolve or agree, in writing or otherwise, to take, any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to and Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operations.
Appears in 1 contract
Interim Operations. The During the Interim Period, the Company covenants shall conduct its business in the ordinary course consistent with past practice and agrees as shall use its reasonable best efforts to itself preserve intact its and the Company Subsidiaries' business organizations and relationships with third parties and its Subsidiaries thatpresent officers and employees. Without limiting the generality of the foregoing, after from the date hereof and prior to until the Effective Time (unless Parent shall otherwise consent in writingClosing Date, which consent shall not unreasonably be withheld, and except as otherwise expressly contemplated by this Agreement or as set forth in this Agreement):on Schedule 6.01, neither the Company nor any Company Subsidiary will:
(a) the business of it and adopt or propose any change in its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, strategic partners, creditors, lessors, employees and business associatesorganizational documents;
(b) it shall not (i) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (ii) amend its certificate of incorporation or by-laws; (iii) other than in the case of wholly-owned subsidiaries, split, combine or reclassify its outstanding shares of capital stock; (iv) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, other than dividends from its direct or indirect wholly-owned Subsidiaries; or (v) purchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(c) neither it nor any of its Subsidiaries shall (i) issue, sell, pledge, dispose of or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debt, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, directly or indirectly, any shares of its capital stock of any class, Rights, any Voting Debt or any other property or assets assets;
(c) merge or consolidate with any other than shares of Company Common Stock and associated Rights issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans); or Person;
(iid) transfersell, lease, license, guarantee, sell, mortgage, pledge, pledge or otherwise dispose of, abandon, cancel, surrender or allow to lapse or expire of or encumber any material property or material assets (including capital stock of any of its Subsidiaries) or business;
(d) neither it nor any of its Subsidiaries shall restructure, recapitalize, reorganize or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the operation of its assets or businesses property in an amount exceeding $25,000 in the aggregate, except pursuant to existing contracts or adopt resolutions providing for commitments which have been disclosed to Parent or authorizing any of in the foregoingordinary course consistent with past practice;
(e) neither it nor make any of its Subsidiaries shall acquire (i) by merging or consolidating withcommitments for, or by purchasing all make or a substantial portion of the assets of or authorize any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, except purchases of inventory and raw materials in capital expenditures outside the ordinary course of business (consistent with past practice, or as permitted make any commitments for, or make or authorize any capital expenditures for capital equipment for use by Section 7.1(g)the Company at its premises in excess of $10,000 individually or $25,000 in the aggregate, whether except pursuant to existing contracts or not material)commitments which have been disclosed to the Buyer or in the ordinary course consistent with past practice;
(f) neither it nor by any of its Subsidiaries shall (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business)means, (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions toacquisition of, or investment in, assets or stock of any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(g) neither it nor settle or compromise any material claims or litigation or, modify, amend or terminate any of its Subsidiaries shall make the Material Contracts or waive, release or assign any capital expenditures material rights or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters)claims;
(h) neither it nor permit any of its Subsidiaries shall make any material changes in accounting methods, principles insurance policy naming the Company as a beneficiary or practices, except insofar as may have been required by a change in GAAP loss-payable payee to be canceled or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserveterminated;
(i) neither it nor increase the compensation of any of its Subsidiaries shall, employee or amend any Benefit Plan in a manner which would increase benefits thereunder except in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measures;
(l) neither it nor any of its Subsidiaries shall make or rescind any material Tax election, amend any material Tax Return or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, in each case except in a manner consistent with past practice or as required by applicable Law;
(m) other than with respect to any actions permitted under Section 7.2, neither it nor any of its Subsidiaries shall take any action or omit to take any action that is would be reasonably likely likely, taking into account the Company's current credit evaluation practices, to result cause any of its representations and warranties herein to become untrue in any of the conditions to the Merger set forth in Article VIII not being satisfiedmaterial and adverse respect; and
(nk) neither it nor any of its Subsidiaries will authorize any of, agree or commit, resolve or agree, in writing or otherwise, commit to take, do any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operationsforegoing.
Appears in 1 contract
Interim Operations. The Company covenants and agrees as to itself and its Subsidiaries that, after During the period from the date hereof and prior of this Agreement ------------------ to the Effective Time (unless Parent shall otherwise consent in writingTime, which consent shall not unreasonably be withheld, and except as otherwise expressly specifically contemplated by this Agreement (including Section 3.02) or otherwise as set forth consented to or approved in this Agreement):writing by the Purchaser, the Seller shall cause the Company and the Subsidiaries to adhere to each of the following:
(a) the business of it and its Subsidiaries Business shall be conducted in only in, and the Company and each of the Subsidiaries shall not take any action except in, the ordinary and usual course and, to of the extent Business consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, strategic partners, creditors, lessors, employees and business associatespast practice;
(b) it neither the Company nor any of the Subsidiaries shall not make or propose any change or amendment to its respective certificate of incorporation, other charter document, by-laws or operating agreement, as applicable;
(ic) issue, neither the Company nor any of the Subsidiaries shall issue or sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (ii) amend its certificate of incorporation authorize the issuance or by-laws; (iii) other than in the case of wholly-owned subsidiaries, split, combine or reclassify its outstanding shares of capital stock; (iv) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, other than dividends from its direct or indirect wholly-owned Subsidiaries; or (v) purchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, or permit any of its Subsidiaries to purchase or otherwise acquiresale of, any shares of its capital stock or any of its other securities or issue any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(c) neither it nor any of its Subsidiaries shall (i) issue, sell, pledge, dispose of or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debt, or (B) securities convertible into or exchangeable or exercisable for, or options, warrantswarrants to purchase, callsscrip, rights to subscribe for, calls or commitments or rights of any kind character whatsoever relating to, or enter into any contract, understanding or arrangement with respect to acquirethe issuance of, any shares of its capital stock of any class, Rights, any Voting Debt or any other property or assets (other than shares of Company Common Stock and associated Rights issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans); or (ii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire or encumber any material property or material assets (including capital stock of any of its Subsidiaries) other securities, or businessenter into any arrangement or contract with respect to the purchase or voting of shares of its capital stock or adjust, split, combine or reclassify any of its securities, or make any other changes in its capital structure;
(d) except as permitted in Section 3.02, the Company and the Subsidiaries shall not undertake any of the actions specified in Section 2.02(i);
(e) the Company shall, and shall cause the Subsidiaries to, use all reasonable efforts to preserve intact the business organization of the Company and each of the Subsidiaries, to keep available the services of its and their present officers and key Employees, and to preserve the goodwill of those having business relationships with it and the Subsidiaries;
(f) neither it the Company nor any of its the Subsidiaries shall restructuretake any action with respect to the grant of any severance or termination pay (otherwise than pursuant to written Plans of the Company or any of the Subsidiaries in effect on the date hereof) or with respect to any increase of benefits payable under its written Plans providing for severance or termination pay in effect on the date hereof;
(g) neither the Company nor any of the Subsidiaries shall (except as required by law and except for salary increases or other employee benefit arrangements in the ordinary course of the Business consistent with past practice that do not result in a material increase in benefits or compensation expense to the Company or any Subsidiary or pursuant to collective bargaining agreements as presently in effect) adopt or amend any Plan or other arrangement for the benefit or welfare of any Employee or increase in any manner the compensation or fringe benefits of any Employee or pay or grant any benefit not required by any existing Plan or arrangement; provided, recapitalizehowever, reorganize that the Company and the Subsidiaries shall have ----------------- the right to change the terms of any such Plan or completely arrangement pertaining to transaction incentive bonuses, to the extent that such change does not result in any cost increase to the Purchaser, the Company or partially liquidate the Subsidiaries;
(h) except with respect to transactions between and among the Company and any of the Subsidiaries or the endorsement of negotiable instruments in the ordinary course of the Business, neither the Company nor any of the Subsidiaries shall guarantee any Indebtedness (other than any guaranty of Subsidiary Indebtedness in the ordinary course of the Business) or the obligations of any Person;
(i) except in the ordinary course of the Business consistent with past practice or in the case of obsolete or redundant assets, or those requiring replacement, and except as disclosed on Schedule 2.02(i), the Company shall not, ---------------- and shall not permit any Subsidiary to, sell, lease or otherwise dispose of any of its assets or any of the Company's or any Subsidiary's interest in any of its assets, or enter into any agreements to do any of the foregoing (including any agreement to sell, lease, occupy or use by easement or otherwise any part of the Real Property);
(j) the Company shall not, and shall not permit any Subsidiary to, acquire (for cash, shares of stock or other consideration) (including by merger, consolidation or acquisition of stock or assets) any Person or any division or assets thereof;
(k) the Company shall not, and shall not permit any Subsidiary to, authorize, recommend, propose or announce an intention to adopt a plan of complete or partial liquidation or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the operation of its assets or businesses or adopt resolutions providing for or authorizing any of the foregoing;
(e) neither it nor any of its Subsidiaries shall acquire (i) by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, except purchases of inventory and raw materials in the ordinary course of business (or as permitted by Section 7.1(g), whether or not material);
(f) neither it nor any of its Subsidiaries shall (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business), (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities dissolution of the Company or any of its the Subsidiaries;
(l) the Company shall not, guarantee and shall not permit any debt securities of another PersonSubsidiary to, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances material Tax elections or settle or compromise any material Liability for Taxes;
(other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (ivm) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(g) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters);
(h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary course of business Business consistent with past practicepractice and other than the discharge of any Liabilities of the Company by the Seller as contemplated by Exhibit D, enter intothe Company shall not, renewand shall not --------- permit any Subsidiary to, modify, amend, terminate, waive, delay the exercise of, release or assign waive any material rights or claims undermake any payment, any Company Material Contract direct or Company Lease in a manner materially adverse to Parent; providedindirect, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs Liability of the Company or any of the Subsidiaries before the same comes due in accordance with its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measuresterms;
(ln) neither it nor any of its Subsidiaries the Company shall make or rescind any material Tax electionnot, amend any material Tax Return or and shall not permit any Subsidiary to, fail to maintain its existing insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminatedcoverage in effect or, in each case except the event any such coverage shall be terminated or lapse, to the extent available at reasonable cost, procure substantially similar substitute insurance policies which in a manner consistent with past practice or all material respects are in at least such amounts and against such risks as required are currently covered by applicable Lawsuch policies;
(mo) the Company shall not, and shall not permit any Subsidiary to, enter into any collective bargaining agreement or any successor collective bargaining agreement;
(p) the Company shall not, and shall not permit any Subsidiary to, enter into any long term purchase or sales agreement or other similar arrangement (other than with respect the renewal of any sales agreements in effect as of the date hereof);
(q) the Company shall not, and shall not permit any Subsidiary to, enter into any Derivative Contracts having a term which extends beyond the Closing Date;
(r) the Company shall not make or commit to any actions permitted under Section 7.2, neither it nor any of its Subsidiaries shall take any action or omit to take any action that is reasonably likely to result capital expenditures in any excess of the conditions to Company's capital budget for calendar year 2000 nor in excess of the Merger set forth in Article VIII not being satisfiedCompany's capital budget for calendar year 2001 when approved by its Board of Directors; and
(ns) neither it nor the Company shall not, and shall not permit any of its Subsidiaries will authorize Subsidiary to, enter into any ofcontract, agreement, commitment or commit, resolve or agree, in writing or otherwise, arrangement to take, do any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operationsforegoing.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the date hereof execution of this Agreement and prior to the Effective Time (unless Parent shall otherwise consent approve in writing, which consent approval shall not be unreasonably be withheld, conditioned or delayed, and except as otherwise expressly disclosed in Section 6.1(a) of the Company Disclosure Letter), the business of the Company and its Subsidiaries shall be conducted in the ordinary course of business consistent with past practice and each of the Company and its Subsidiaries shall, subject to compliance with the specific matters set forth below, use reasonable best efforts to preserve its business organization intact and maintain the existing relations and goodwill with Governmental Entities, customers, suppliers, content providers, distributors, licensors, creditors, lessors, employees and business associates and keep available the services of the Company and its Subsidiaries’ present employees and agents. Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the Effective Time, except (A) as Parent may approve in writing (such approval not to be unreasonably withheld, conditioned or delayed), (B) as expressly disclosed in Section 6.1(a) or (d) of the Company Disclosure Letter or (C) as expressly provided for in the Employee Matters Agreement, the Company shall not and will not permit its Subsidiaries to:
(i) (A) amend its certificate of incorporation or bylaws (or comparable governing documents), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock, (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for any dividends or distributions paid by Sky Brasil Servicios Ltda. or a direct or indirect wholly owned Subsidiary of the Company to its stockholders or unitholders on a pro rata basis in the ordinary course of business consistent with past practice), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock;
(ii) merge or consolidate with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or business;
(iii) knowingly take or omit to take any action if such action or failure to act would be reasonably likely to prevent or impede the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code;
(iv) (A) establish, adopt, amend or terminate any Company Plan or amend the terms of any outstanding equity-based awards, (B) grant or provide any severance or termination payments or benefits to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, except to comply with applicable Law or as expressly required by the provisions of the Company Plans as in effect on the date hereof or the provisions of this Agreement, (C) increase the compensation, bonus or pension, welfare, severance or other benefits of or pay any bonus to any director, officer or employee of the Company or any of its Subsidiaries, (D) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Plan (including any equity-based awards), except to the extent expressly required by any such Company Plan or provided in this Agreement, (E) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or to comply with applicable Law, or (F) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(v) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) indebtedness for borrowed money incurred in the ordinary course of business consistent with past practice not to exceed $25,000,000 in the aggregate on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing indebtedness for borrowed money, (B) indebtedness for borrowed money in replacement of existing indebtedness for borrowed money which has matured or is scheduled to mature within the twelve month period following such incurrence of indebtedness at the then prevailing market rates and on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the indebtedness being replaced or (C) guarantees incurred in compliance with this Section 6.1 by the Company and its Subsidiaries of indebtedness of its wholly owned Subsidiaries;
(vi) make or commit to any capital expenditures other than in the ordinary course of business consistent with past practice and in the aggregate in any event not in excess of (A) in 2014, 110% of the aggregate amounts reflected in the Company’s capital expenditure budget set forth in Section 6.1(a)(vi)(A) of the Company Disclosure Letter (the “2014 CapEx Budget”) and (B) in 2015, the sum of (1) the remainder (if a positive number) of (x) 100% of the 2014 CapEx Budget minus (y) the actual amount the Company made or committed to pursuant to the preceding clause (A) plus (2) 110% of the Company’s 2015 capital expenditure budget set forth in Section 6.1(a)(vi)(B) of the Company Disclosure Letter; provided that the Company’s timing of such capital expenditures in 2015 shall be consistent with past practice.
(vii) other than transfers among and between wholly owned Subsidiaries of the Company, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien (other than Permitted Liens) upon or otherwise dispose of any of their respective properties or assets (including capital stock of any of its Subsidiaries) with a fair market value in excess of $50,000,000 individually or $100,000,000 in the aggregate (except with respect to Intellectual Property that is material to the respective businesses of the Company or its Subsidiaries, which shall not be included in this exception) or that are otherwise material other than ordinary course sales of customer premises equipment, or, with respect to Intellectual Property, non-exclusive license grants, in each case, made in the ordinary course of business consistent with past practice;
(viii) issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer on encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares except any Shares issued pursuant to Company Options, Company SARs, Company Restricted Stock Units, Company Performance Stock Units and Company Awards outstanding on the date of this Agreement expressly required by the existing terms or such awards and the Company Stock Plans;
(ix) other than acquisitions of inventory or assets in the ordinary course of business consistent with past practice and making or committing to any capital expenditures in compliance with Section 6.1(a)(vi), spend in excess of $50,000,000 individually or $200,000,000 in the aggregate to acquire any business or to acquire assets or other property, whether by merger, consolidation, purchase of property or assets or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Subsidiaries shall make any acquisition that would, or would reasonably be likely to prevent, delay or impair the Company’s ability to consummate the transactions contemplated by this Agreement;
(x) make any material change with respect to its accounting policies or procedures, except as required by changes in GAAP or by applicable Law;
(xi) except as required by applicable Law, (A) make any Tax election that is material to the Company and its Subsidiaries, taken as a whole, or take any position that is material to the Company and its Subsidiaries, taken as a whole, on any material Tax Return filed on or after the date of this Agreement; that is inconsistent with elections made or positions taken in preparing or filing similar Tax Returns in prior periods, (B) change any method of Tax accounting, which change is material to the Company and its Subsidiaries, taken as a whole, (C) amend any Tax Return with respect to an amount of Taxes that is material to the Company and its Subsidiaries, taken as a whole, or (D) settle or resolve any Tax controversy that is material to the Company and its Subsidiaries, taken as a whole;
(xii) (A) (1) enter into any new line of business other than any line of business that is reasonably ancillary to and a reasonably foreseeable extension of any line of business as of the date of this Agreement, or (2) start to conduct a line of business of the Company or any of its Subsidiaries in any geographic area where it is not conducted as of the date of this Agreement, other than starting to conduct a line of business of the Company or any of its Subsidiaries in geographic areas that are reasonable extensions to geographic areas where such business line is conducted as of the date of this Agreement (provided that in the case of each of clauses (1) and (2), such entry or expansion would not require the receipt or transfer of any License that would constitute a Communications License if issued or granted prior to the date hereof and would not reasonably be expected to prevent, delay (other than in a de minimis respect) or impair the ability of the Company, Parent and Merger Sub to complete the Merger on a timely basis) or (B) except as currently conducted, engage in the conduct of any business in any state which would require the receipt or transfer of a Communications License or License that would constitute a Communications License if issued or granted prior to the date hereof or in any foreign country that would require the receipt of a material License;
(xiii) file or apply for any License outside of the ordinary course of business consistent with past practice;
(xiv) other than in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $100,000,000, make any loans, advances or capital contributions to, or investments in, any Person (other than loans, advances or capital contributions to the Company or any direct or indirect wholly owned Subsidiary of the Company or to Sky Brasil Servicios Ltda.);
(xv) enter into any Contract pursuant to which the Company or any of its Subsidiaries agrees to provide any wireless, wireline or Internet services to any Person (other than Parent or its Subsidiaries) as an agent or reseller if such Contract is not terminable by the Company or one of its Subsidiaries on 60 days’ or less notice without penalty;
(xvi) other than in the ordinary course of business, (a) amend or modify in any material respect or terminate (excluding terminations upon expiration of the term thereof in accordance with the terms thereof) any Material Contract or waive, release or assign any material rights, claims or benefits under any Material Contract and (b) enter into any Contract that would have been a Material Contract had it been entered into prior to the date of this Agreement unless it is on terms substantially consistent with, or on terms more favorable to the Company and/or its Subsidiaries (and to Parent and its Subsidiaries following the Closing) than, either a Contract it is replacing or a form of such Material Contract made available to Parent prior to the date hereof;
(xvii) settle any action, suit, case, litigation, claim, hearing, arbitration, investigation or other proceedings before or threatened to be brought before a Governmental Entity;
(xviii) assign, transfer, forfeit, cancel, fail to renew, or fail to extend or defend any Communications License that is material to the Company and its Subsidiaries;
(xix) enter into any collective bargaining agreement, unless required by applicable Law;
(xx) enter into any Contract that obligates or purports to obligate any existing or future non-controlled Affiliate of the Company (including any parent entity) to grant licenses to any Intellectual Property; or
(xxi) agree, resolve or commit to do any of the foregoing.
(b) Parent covenants and agrees, from and after the execution of this Agreement and prior to the Effective Time (unless the Company shall otherwise approve in writing, which approval will not be unreasonably withheld, conditioned or delayed and except as otherwise expressly contemplated by this Agreement or as set forth expressly disclosed in this AgreementSection 6.1(b) of the Parent Disclosure Letter):
(ai) the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, strategic partners, creditors, lessors, employees and business associates;
(b) it Parent shall not (iA) issue, sell, pledge, dispose amend Parent’s certificate of incorporation or encumber any capital stock owned by it bylaws in any manner that would prohibit or hinder, impede or delay in any material respect the Merger or the consummation of its Subsidiariesthe other transactions contemplated hereby or have a material and adverse impact on the value of the Parent Common Stock; (ii) amend provided that any amendment to its certificate of incorporation or by-laws; (iii) other than in to increase the case authorized number of wholly-owned subsidiaries, split, combine or reclassify its outstanding shares of any class or series of the capital stock; stock of Parent shall in no way be restricted by the foregoing, or (ivB) declare, set aside or pay any dividend or distribution payable in cash, stock or property in respect of any capital stock, other than regular quarterly cash dividends from its direct or indirect wholly-owned Subsidiaries; or (v) purchase, redeem or otherwise acquire, except for on the acquisition of shares of Company Parent Common Stock from holders of Company Stock Options in full or partial payment as described on Section 6.1(b)(i) of the exercise price payable by such holder upon exercise of Company Stock Options to Parent Disclosure Letter and other than dividends or distributions with a record date after the extent required or permitted under the terms of such Company Stock OptionsEffective Time;
(ii) Parent shall not, or and shall not permit any of its Subsidiaries to, acquire another business that, at the time such action is taken, to purchase or otherwise acquirethe Knowledge of Parent, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stockwould be likely to prevent the Closing;
(c) neither it nor any of its Subsidiaries shall (i) issue, sell, pledge, dispose of or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debt, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class, Rights, any Voting Debt or any other property or assets (other than shares of Company Common Stock and associated Rights issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans); or (ii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire or encumber any material property or material assets (including capital stock of any of its Subsidiaries) or business;
(d) neither it nor any of its Subsidiaries shall restructure, recapitalize, reorganize or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the operation of its assets or businesses or adopt resolutions providing for or authorizing any of the foregoing;
(e) neither it nor any of its Subsidiaries shall acquire (i) by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, except purchases of inventory and raw materials in the ordinary course of business (or as permitted by Section 7.1(g), whether or not material);
(f) neither it nor any of its Subsidiaries shall (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business), (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(g) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters);
(h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measures;
(l) neither it nor any of its Subsidiaries shall make or rescind any material Tax election, amend any material Tax Return or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, in each case except in a manner consistent with past practice or as required by applicable Law;
(m) other than with respect to any actions permitted under Section 7.2, neither it nor any of its Subsidiaries shall knowingly take any action or omit to take any action that is if such action or failure to act would be reasonably likely to result in prevent or impede the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code; or
(iv) Parent shall not agree, resolve, or commit to do any of the conditions to the Merger set forth in Article VIII not being satisfied; andforegoing.
(nc) neither it nor any of its Subsidiaries will authorize any of, or commit, resolve or agree, in writing or otherwise, to take, any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations (i) Officers of the Company shall, prior to Closing. Prior the Effective Time, execute and deliver to Closingeach of Sxxxxxxx & Cxxxxxxx LLP and Weil, Gotshal & Mxxxxx LLP a certificate substantially in the form of Section 6.1(c)(i) of the Company shall exerciseDisclosure Letter (with such changes as are necessary, consistent with in the terms opinion of such counsel, to reflect any change in applicable Law, regulation or official interpretation thereof occurring between the date hereof and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operationsthe Closing Date).
Appears in 1 contract
Samples: Merger Agreement (Directv)
Interim Operations. During the period from March 31, 1998 and continuing until the Closing:
(a) The Company covenants Shareholders agree (except as expressly contemplated by or disclosed within this Agreement, including any Exhibits and agrees as to itself and its Subsidiaries thatSchedules hereto, after the date hereof and prior or to the Effective Time (unless Parent extent that Buyer shall otherwise consent in writing, which consent shall not unreasonably be withheld, and except ) that as otherwise expressly contemplated by this Agreement or as set forth in this Agreement):to the Company:
(a1) the The Company shall carry on its business of it and its Subsidiaries shall be conducted in the usual, regular and ordinary and usual course in substantially the same manner as heretofore conducted and, to the extent consistent therewithwith such business, it and its Subsidiaries shall use their respective commercially all reasonable efforts to preserve intact its present business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, strategic partners, creditors, lessors, employees and business associates;organization,
(b2) it The Company shall not and shall not propose to: (i) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (ii) amend its certificate of incorporation or by-laws; (iii) other than in the case of wholly-owned subsidiaries, split, combine or reclassify its outstanding shares of capital stock; (iva) declare, set aside or pay any dividend payable in cashdividend, stock on, or property make other distributions in respect of, any of any its capital stock, other than dividends from its direct or indirect wholly-owned Subsidiaries; or (v) purchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, or permit any of its Subsidiaries to purchase or otherwise acquire, redeem any shares of its capital stock other than a cash dividend to be distributed to the Shareholders in an amount equal to the Shareholders' liability for federal and state taxes on the earnings from operations of the Company during 1998 through the Closing Date (exclusive of any income or gain on sale associated with the transactions covered by this Agreement) as more fully described at Section 5.4 hereafter; (b) split, combine or reclassify any of its capital stock or issue, authorize or propose the issuance of any other securities convertible into in respect of, in lieu of or exchangeable in substitution for shares of its capital stock; (c) redeem, repurchase or exercisable for otherwise acquire any shares of its capital stock;; or (d) otherwise change its capitalization.
(c3) neither it nor any of its Subsidiaries Except as contemplated by this Agreement, the Company shall (i) not sell, issue, sell, pledge, dispose of authorize or encumber (A) any shares of its capital stock of any classpropose the sale or issuance of, Rights pledge or any Voting Debt, purchase or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquirepropose the purchase of, any shares of its capital stock of any classclass or securities convertible into, Rightsor rights, warrants or options to acquire, any Voting Debt such shares or any other property convertible securities.
(4) The Company shall not amend its articles of incorporation or assets its Bylaws.
(other than shares of 5) The Company Common Stock and associated Rights issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans); or (ii) transfershall not sell, lease, licensepledge, guarantee, encumber or otherwise dispose of or agree to sell, mortgagelease, pledge, encumber or otherwise dispose of, abandon, cancel, surrender or allow to lapse or expire or encumber any material property or material assets (including capital stock of any of its Subsidiaries) or business;
(d) neither it nor any of its Subsidiaries shall restructure, recapitalize, reorganize or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the operation of its assets or businesses or adopt resolutions providing for or authorizing any of the foregoing;
(e) neither it nor any of its Subsidiaries shall acquire (i) by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, material except purchases of inventory and raw materials in the ordinary course of business (or as permitted by Section 7.1(g), whether or not material);consistent with prior practice and in no event amounting in the aggregate to more than $75,000.
(f6) neither it nor any of its Subsidiaries The Company shall (i) not incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business), (ii) issue, or issue or sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (others other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(g) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters);
(h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay prior practice and in no event (disregarding for these purposes ordinary trade accounts payable and operating accruals) amounting in the exercise of, release aggregate to more than $75,000.
(7) The Company shall not adopt or assign amend in any material rights respect any collective bargaining agreement or claims underEmployee Benefit Plan.
(8) The Company shall not grant to any Shareholder-employee any increase in compensation or in severance or termination pay, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract employment agreement with any executive officer.
(9) The Company shall not acquire (by merger, consolidation or acquisition of the type specified in Section 5.5(a)(viiistock or assets or otherwise) any corporation, partnership or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Timeother business organization or subdivision thereof, or modify make any investment by either purchase of stock or amend in a manner adverse securities, contributions to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix)capital, or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shallproperty transfer or, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to business, purchase of any property or assets, of any other individual employment or severance agreements for employees below the level entity.
(10) The Company shall not make any material tax election or settle or compromise any material federal, state, local or foreign tax liability.
(11) The Company shall not waive, release, grant or transfer any rights of Vice President, (iii) increase material value or modify or change in any material respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and Material Contract other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);practice.
(k12) except for matters identified in Section 7.1(k) of the The Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall not enter into any settlement of agreement or compromise arrangement to do any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the foregoing. The Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measures;
(l) neither it nor any of its Subsidiaries shall make or rescind any material Tax election, amend any material Tax Return or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, in each case except in a manner consistent with past practice or as required by applicable Law;
(m) other than with respect to any actions permitted under Section 7.2, neither it nor any of its Subsidiaries shall not take any action action, or omit fail to take any action action, that is reasonably likely to result in any of the conditions to representations and warranties of the Merger Company set forth in Article VIII not being satisfied; and
(n) neither it nor any of its Subsidiaries will authorize any of, or commit, resolve or agree, in writing or otherwise, to take, any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operationsbecoming untrue in any material respect.
Appears in 1 contract
Interim Operations. The Company Each of Linde and Praxair covenants and agrees as to itself and its Subsidiaries that, from and after the date hereof and prior to until the earliest of the Effective Time Time, the termination of the Specified Covenants and the termination of this Agreement in accordance with Article VIII, unless Praxair (unless Parent in the case of any action proposed to be taken by Linde or any Subsidiary of Linde) or Linde (in the case of any action proposed to be taken by Praxair or any Subsidiary of Praxair) shall otherwise consent approve in writing, which consent approval shall not be unreasonably be withheld, conditioned or delayed, and except as otherwise expressly contemplated by this Agreement or required by applicable Law or, in the case of Praxair, except as otherwise set forth in this Agreement):Section 6.1 of the Praxair Disclosure Letter or, in the case of Linde, except as otherwise set forth in Section 6.1 of the Linde Disclosure Letter:
(a) the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, strategic partners, creditors, lessors, employees and business associatespast practice;
(b) (i) it shall not (i) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries, except as otherwise permitted by Section 6.1(e)(i); (ii) it shall not amend its certificate Organizational Documents, other than amendments to the Organizational Documents of incorporation or by-lawsSubsidiaries that are not material in the context of the transactions contemplated by this Agreement; (iii) other than in the case of wholly-owned subsidiaries, it shall not split, combine or reclassify its the outstanding shares of capital stockstock of Linde or Praxair, as applicable; (iv) it shall not declare, set aside or pay any dividend type of dividend, whether payable in cash, stock or property property, in respect of any capital stock, stock other than (x) dividends from made in accordance with Section 6.1(b) of the Linde Disclosure Letter or Section 6.1(b) of the Praxair Disclosure Letter, (y) dividends payable by its direct or indirect wholly-owned SubsidiariesSubsidiaries to it or another of its direct or indirectly wholly-owned Subsidiaries and (z) cash dividends paid by Subsidiaries in the ordinary and usual course of business consistent with past practice; or and (v) purchaseit shall not repurchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, or permit any of its Subsidiaries to purchase or otherwise acquire, any interests or shares of its capital stock of Linde or Praxair, as applicable, or any securities convertible into or exchangeable or exercisable for any shares of its such capital stock;
(c) neither it nor any of its Subsidiaries shall (i) issue, sell, pledge, dispose of or encumber (A) any (1) shares of its capital stock of any class, Rights or any Voting Debtof, or (B2) securities convertible into or exchangeable or exercisable for, or (3) options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class, Rightsas appropriate, any Voting Debt other than, in the case of this clause (A), (x) Praxair Shares or any other property or assets (other than shares of Company Common Stock and associated Rights Linde Shares issuable pursuant to options and other stock-based awards outstanding on or awarded prior to the date hereof under the Company Praxair Stock Plans)Plans or Linde LTIP that are issued in accordance with their terms and the applicable Praxair Stock Plan or Linde LTIP, as in effect on the date hereof; or (iiy) transferthe issuance, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender sale or allow to lapse or expire or encumber any material property or material assets (including disposal of capital stock of a Subsidiary to such party or any of its other Subsidiaries or as otherwise permitted by Section 6.1(e)(i), or (B) any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with its shareholders on any matter; (ii) increase, in comparison to March 31, 2017, the long-term indebtedness for borrowed money (including any guarantee of such indebtedness) of such party and its Subsidiaries, other than (A) transactions between it and any of its Subsidiaries or businesstransactions between its Subsidiaries, (B) as a refinancing of existing indebtedness or (C) in the ordinary and usual course of business and consistent with past practice and in an amount not to exceed €1,500 million in the aggregate; or (iii) (A) make any capital expenditures in financial year 2017 or financial year 2018, or commit (in financial year 2017 or financial year 2018) to make in financial year 2018 capital expenditures, that, in the aggregate for financial year 2017 or financial year 2018, exceed by €400 million or more the capital expenditure target for such party for such financial year that has been provided to the other party prior to the date of this Agreement or such other capital expenditure targets as may be mutually agreed by Linde and Praxair or (B) commit to any capital expenditures to be made in any financial year after financial year 2018 that exceed €400 million for an individual project;
(d) except as required by any Benefit Plan as in effect on the date hereof, neither it nor any of its Subsidiaries shall restructure(i) except in the ordinary and usual course of business, recapitalizeterminate, reorganize establish, adopt, enter into, make any new grants or completely or partially liquidate or adopt a plan of complete or partial liquidation awards under, amend or otherwise enter into modify any agreement Benefit Plan, as the case may be, or any other arrangement imposing material changes or restrictions that would be a Benefit Plan if in effect on the operation date hereof, in each case other than as would not reasonably be expected to materially increase the cost of its assets benefits under any Benefit Plan or businesses any other arrangement that would be a Benefit Plan if in effect on the date hereof, (ii) except in the ordinary and usual course of business consistent with past practice, increase the salary, wage, bonus or adopt resolutions providing for other compensation of any employees or authorizing fringe benefits of any director, officer or employee or (iii) except in the ordinary and usual course of business consistent with past practice, take any action to accelerate the foregoingvesting or lapsing of restrictions or payment, or fund or in any other way secure the payment, of compensation or benefits under any Benefit Plan;
(e) neither it nor any of its Subsidiaries shall acquire (i) sell, pledge, encumber or otherwise dispose of (whether by merging way of merger, consolidation, sale of stock or consolidating withassets, or by purchasing all otherwise) any assets, business units or a substantial portion capital stock of the assets Subsidiaries, except for sales or dispositions of assets, business units or any capital stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, of Subsidiaries in transactions that individually (but aggregating related transactions) involve consideration of less than €200 million or (ii) acquire or agree to acquire (whether by merger, consolidation, purchase or otherwise) any Person or assets (x) in which the expected gross expenditures and commitments (including the amount of any indebtedness assumed) for such acquisition individually (but aggregating related transactions) exceeds €500 million (provided that are materialsuch threshold shall be €75 million in respect of any acquisition individually (but aggregating related transactions) of any asset not related to a line of business of such party or its Subsidiaries in existence as of the date hereof, or any Person whose primary business is not focused on any such line of business), or (y) that is reasonably likely, individually or in the aggregate, to materially delay the Company satisfaction of the conditions set forth in Article VII or prevent the satisfaction of such conditions, other than, in the case of each of clauses (i) and (ii), transactions between it and any of its Subsidiaries or transactions between its Subsidiaries, taken as a whole, except purchases of inventory and raw materials in the ordinary course of business (or as permitted by Section 7.1(g), whether or not material);
(f) except in the ordinary and usual course of business consistent with past practice, neither it nor any of its Subsidiaries shall settle or compromise any material claims or litigation if such settlement or compromise would involve the cash payment by such party or its Subsidiaries of (i) incur any indebtedness for borrowed money €50 million or guarantee any such indebtedness more in respect of another Person (other than pursuant to the Credit Agreement in the ordinary course of business), an individual settlement or compromise or (ii) issue, sell €150 million or amend any debt securities more calculated on an aggregate basis in respect of all such settlements or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange ratescompromises;
(g) neither it nor any of its Subsidiaries shall make enter into any capital expenditures “non-compete” or other expenditures with respect to property, plant or equipment in excess similar Contract that would materially restrict the business of $10 million per quarter in the aggregate for New Holdco Group following the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters);Effective Time; and
(h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles will authorize or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar an agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measures;
(l) neither it nor any of its Subsidiaries shall make or rescind any material Tax election, amend any material Tax Return or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, in each case except in a manner consistent with past practice or as required by applicable Law;
(m) other than with respect to any actions permitted under Section 7.2, neither it nor any of its Subsidiaries shall take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VIII not being satisfied; and
(n) neither it nor any of its Subsidiaries will authorize any of, or commit, resolve or agree, in writing or otherwise, to take, do any of the foregoing actions; provided, however, that nothing contained set forth in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with Sections 6.1(a) through (g) if it would be prohibited by the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operationsSections 6.1(a) through (g) from doing the foregoing.
Appears in 1 contract
Interim Operations. The Company (a) PageNet covenants and agrees as to itself and its Subsidiaries that, from and after the date hereof of this Agreement and prior to the Effective Time (unless Parent Arch shall otherwise consent approve in writing, which consent shall not unreasonably be withheld, and except as otherwise expressly contemplated by this Agreement Agreement, disclosed in the PageNet Disclosure Letter, or as set forth in this Agreementrequired by applicable Law):
(ai) Its business and the business of it and its Subsidiaries shall be conducted only in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable best efforts to preserve its their respective business organization organizations intact and maintain its their respective existing relations and goodwill with customers, suppliers, regulators, distributors, strategic partners, creditors, lessors, employees and business associates;
(bii) it It shall not not: (i) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (iiA) amend its certificate of incorporation or by-lawsbylaws; (iiiB) other than in the case of wholly-owned subsidiaries, split, combine combine, subdivide or reclassify its outstanding shares of capital stock; (ivC) declare, set aside or pay any dividend payable in cash, stock or property in with respect of to any capital stock, other than dividends from its direct or indirect wholly-owned Subsidiaries; or (vD) purchaserepurchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common in connection with existing commitments under PageNet Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options Plans but subject to the extent required or permitted PageNet's obligations 32 under the terms of such Company Stock Optionssubparagraph (iii) below, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into into, or exchangeable or exercisable for for, any shares of its capital stock;
(ciii) neither Neither it nor any of its Subsidiaries shall take any action that would prevent the Merger from qualifying as a "reorganization" within the meaning of Section 368(a) of the Code or that would cause any of its representations and warranties in this Agreement to become untrue in any material respect;
(iiv) issue, sell, pledge, dispose Neither it nor any of or encumber its ERISA Affiliates shall: (A) accelerate, amend or change the period of exercisability of or terminate, establish, adopt, enter into, make any shares new grants or awards of its capital stock of stock-based compensation or other benefits under any class, Rights or any Voting Debt, or Compensation and Benefit Plans; (B) securities convertible into amend or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of otherwise modify any kind to acquire, any shares of its capital stock of any class, Rights, any Voting Debt or any other property or assets (other than shares of Company Common Stock Compensation and associated Rights issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans)Benefit Plan; or (iiC) transferincrease the salary, leasewage, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender bonus or allow to lapse or expire or encumber any material property or material assets (including capital stock other compensation of any directors, officers or key employees, except: (x) for grants or awards to directors, officers and employees of it or its Subsidiaries under existing Compensation and Benefit Plans in such amounts and on such terms as are consistent with past practice; (y) in the ordinary and usual course of its Subsidiariesbusiness (which may include normal periodic performance reviews and related compensation and benefit increases and the provision of individual PageNet Compensation and Benefit Plans consistent with past practice for promoted or newly hired officers and employees on terms consistent with past practice);or (z) or businessfor actions necessary to satisfy existing contractual obligations under Compensation and Benefit Plans existing as of the date of this Agreement;
(dv) neither Neither it nor any of its Subsidiaries shall restructureincur, recapitalize, reorganize repay or completely retire prior to maturity or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the operation of its assets or businesses or adopt resolutions providing for or authorizing any of the foregoing;
(e) neither it nor any of its Subsidiaries shall acquire (i) by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, except purchases of inventory and raw materials in the ordinary course of business (or as permitted by Section 7.1(g), whether or not material);
(f) neither it nor any of its Subsidiaries shall (i) incur refinance any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business), (ii) or issue, sell sell, repurchase or amend redeem prior to maturity any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Personothers, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, except (iiiA) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary and usual course of its business, (B) for any refinancing of such indebtedness or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than debt securities on terms no less favorable in the ordinary course of businessaggregate to PageNet and which would not prevent, enter into materially delay or materially impair PageNet's ability to consummate the transactions contemplated by this Agreement, and (C) for any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations retirement in commodities prices or exchange ratesfor PageNet Shares consistent with past practice;
(gvi) neither Neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in an aggregate amount in excess of $10 million per quarter in the aggregate amount reflected in PageNet's capital expenditure budget for the Company fiscal years ending December 31, 1999 and its Subsidiaries2000, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available copy of which has been provided to the Company to spend in future quarters)Arch;
(hvii) neither Neither it nor any of its Subsidiaries shall make issue, deliver, sell, pledge or encumber shares of any material changes in accounting methodsclass of its capital stock or any securities convertible or 33 exchangeable into, principles or practicesany rights, warrants or options to acquire, or any bonds, debentures, notes, or other debt obligations having the right to vote or that are convertible or exercisable for, any such shares, except insofar as PageNet may have been required by a change issue PageNet Shares in GAAP exchange for indebtedness or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reservedebt securities pursuant to clause (v) above;
(iviii) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measures;
(l) neither Neither it nor any of its Subsidiaries shall authorize, propose or announce an intention to authorize or propose, or enter into an agreement with respect to, any merger, consolidation or business combination (other than the Merger), or any purchase, sale, lease, license or other acquisition or disposition of any business or of a material amount of assets or securities, except for transactions entered into in the ordinary and usual course of its business, except for any acquisition of assets or any investment having a cash purchase price of $25,000,000 or less in any single instance and $50,000,000 or less in the aggregate where such acquisition or investment would not prevent, materially delay or materially impair PageNet's ability to consummate the transactions contemplated by this Agreement;
(ix) PageNet shall not make or rescind any material Tax electionchange in its accounting policies or procedures, amend other than any such change that is required by GAAP;
(x) PageNet shall not release, assign, settle or compromise any material Tax Return claims or permit litigation in excess of $300,000 or make any insurance policy naming material tax election or settle or compromise any material federal, state, local or foreign tax liability; and
(xi) Neither it nor any of its Subsidiaries shall authorize or enter into any agreement to do any of the foregoing.
(b) Arch covenants and agrees as a beneficiary to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the Effective Time (unless PageNet shall otherwise approve in writing and except as otherwise expressly contemplated by this Agreement, disclosed in the Arch Disclosure Letter, or loss-payable payee to be cancelled or terminated, in each case except in a manner consistent with past practice or as required by applicable Law):
(i) Its business and the business of its Subsidiaries shall be conducted only in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their reasonable best efforts to preserve their respective business organizations intact and maintain their respective existing relations and goodwill with customers, suppliers, regulators, distributors, creditors, lessors, employees and business associates;
(mii) other than It shall not: (A) amend its certificate of incorporation or bylaws; (B) split, combine, subdivide or reclassify its outstanding shares of capital stock; (C) declare, set aside or pay any dividend payable in cash, stock or property with respect to 34 any actions permitted capital stock, except for a dividend that would be received by holders of PageNet Shares on an equivalent post-Merger basis per share of Arch Common Stock after the Effective Time; or (D) repurchase, redeem or otherwise acquire, except in connection with existing commitments under Section 7.2Arch Stock Plans but subject to Arch' obligations under subparagraph (iii) below, neither or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into, or exchangeable or exercisable for, any shares of its capital stock;
(iii) Neither it nor any of its Subsidiaries shall take any action that would prevent the Merger from qualifying as a "reorganization" within the meaning of Section 368(a) of the Code or omit that would cause any of its representations and warranties in this Agreement to take any action that is reasonably likely to result become untrue in any material respect;
(iv) Neither it nor any of its ERISA Affiliates shall: (A) accelerate, amend or change the period of exercisability of or terminate, establish, adopt, enter into, make any new grants or awards of stock-based compensation or other benefits under any Compensation and Benefit Plans; (B) amend or otherwise modify any Compensation and Benefit Plan; or (C) increase the salary, wage, bonus or other compensation of any directors, officers or key employees, except: (x) for grants or awards to directors, officers and employees of it or its Subsidiaries under existing Compensation and Benefit Plans in such amounts and on such terms as are consistent with past practice; (y) in the ordinary and usual course of its business (which may include normal periodic performance reviews and related compensation and benefit increases and the provision of individual Arch Compensation and Benefit Plans consistent with past practice for promoted or newly hired officers and employees on terms consistent with past practice); or (z) for actions necessary to satisfy existing contractual obligations under its Compensation and Benefit Plans existing as of the conditions to the Merger set forth in Article VIII not being satisfied; anddate of this Agreement;
(nv) neither Neither it nor any of its Subsidiaries will authorize shall incur, repay or retire prior to maturity or refinance any ofindebtedness for borrowed money or guarantee any such indebtedness or issue, sell, repurchase or redeem prior to maturity any debt securities or warrants or rights to acquire any debt securities or guarantee any debt securities of others, except in (A) the ordinary and usual course of its business, (B) for any refinancing of such indebtedness or debt securities on terms no less favorable in the aggregate to Arch and which would not prevent, materially delay or materially impair Arch' or Merger Sub's ability to consummate the transactions contemplated by this Agreement, and (C) for any retirement in exchange for shares of Arch Common Stock consistent with past practice;
(vi) Neither it nor any of its Subsidiaries shall make any capital expenditures in an aggregate amount in excess of the aggregate amount reflected in Arch' 35 capital expenditure budget for the fiscal years ending December 31, 1999 and 2000, a copy of which has been provided to PageNet;
(vii) Neither it nor any of its Subsidiaries shall issue, deliver, sell, pledge or encumber shares of any class of its capital stock or any securities convertible or exchangeable into, or commitany rights, resolve warrants or agreeoptions to acquire, or any bonds, debentures, notes, or other debt obligations having the right to vote or that are convertible or exercisable for, any such shares, except Arch may issue shares of Arch Common Stock issued in writing exchange for indebtedness or otherwisedebt securities pursuant to clause (v) above;
(viii) Neither it nor any of its Subsidiaries shall authorize, propose or announce an intention to takeauthorize or propose, or enter into an agreement with respect to, any merger, consolidation or business combination (other than the Merger), or any purchase, sale, lease, license or other acquisition or disposition of any business or of a material amount of assets or securities, except for transactions entered into in the ordinary and usual course of its business, except for any acquisition of assets or any investment having a cash purchase price of $25,000,000 or less in any single instance and $50,000,000 or less in the aggregate where such acquisition or investment would not prevent, materially delay or materially impair Arch' or Merger Sub's ability to consummate the transactions contemplated by this Agreement;
(ix) Arch shall not make any material change in its accounting policies or procedures, other than any such change that is required by GAAP;
(x) Arch shall not release, assign, settle or compromise any material claims or litigation in excess of $300,000 or make any material tax election or settle or compromise any material federal, state, local or foreign tax liability; and
(xi) Neither it nor any of its Subsidiaries shall authorize or enter into any agreement to do any of the foregoing actions; providedforegoing.
(c) Arch and PageNet agree that any written approval obtained under this Section 6.1 must be signed, howeverif on behalf of Arch, that nothing contained in this Agreement shall give to Parentby the Chief Executive Officer or the Chief Financial Officer of Arch, directly or indirectlyif on behalf of PageNet, rights to control or direct by the operations Chairman of the Company prior Board and Chief Executive Officer or President and Chief Operating Officer of PageNet.
(d) Notwithstanding any other provision hereof to Closing. Prior the contrary, PageNet may, after the date hereof (i) issue, deliver, sell, pledge or encumber in arms-length transactions with unaffiliated third parties shares of any class of capital stock of the Distributed Subsidiary or any securities convertible or exchangeable into, or any rights, warrants or options to Closingacquire, the Company shall exerciseor any bonds, consistent with the terms and conditions of this Agreementdebentures, complete control and supervision of its and its Subsidiaries’ operations.notes, or other debt obligations having the
Appears in 1 contract
Samples: Merger Agreement (Arch Communications Group Inc /De/)
Interim Operations. (a) The Company covenants and agrees the Shareholder agree (except as to itself expressly contemplated by this Agreement, including any Exhibits and its Subsidiaries thatSchedules hereto, after the date hereof and prior or to the Effective Time (unless Parent extent that Purchaser shall otherwise consent in writing, which consent shall not unreasonably be withheld, and except ) that as otherwise expressly contemplated by this Agreement or as set forth in this Agreement):to the Company:
(a1) The Company shall carry on the business of it and its Subsidiaries shall be conducted Business in the ordinary Ordinary Course of Business and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective all commercially reasonable efforts to preserve intact its present business organization intact organization, keep available the services of its present officers and maintain employees and preserve its existing relations and goodwill relationships with customers, suppliers, distributors, strategic partners, creditors, lessors, employees suppliers and others having business associatesdealings with it;
(b2) it The Company shall not and shall not propose to: (i) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (ii) amend its certificate of incorporation or by-laws; (iii) other than in the case of wholly-owned subsidiaries, split, combine or reclassify its outstanding shares of capital stock; (iva) declare, set aside or pay any dividend payable in cashdividend, stock on, or property make other distributions in respect of, any of any its capital stock, other than dividends from its direct or indirect wholly-owned Subsidiaries; or (v) purchase, redeem or otherwise acquire, except for those S corporation distributions necessary to cover applicable pass-through taxes on the acquisition of shares of Company Common Stock from holders of Company Stock Options Company's net income in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options 2002 prior to the extent required or permitted under the terms of such Company Stock OptionsClosing, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for redeem any shares of its capital stock;
; (b) split, combine or reclassify any of its capital stock or issue, authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock; (c) neither it nor any of its Subsidiaries shall (i) issueredeem, sell, pledge, dispose of repurchase or encumber (A) otherwise acquire any shares of its capital stock of any class, Rights or any Voting Debt, stock; or (Bd) securities convertible into otherwise change its capitalization;
(3) Except as contemplated by this Agreement, the Company shall not sell, issue, pledge, authorize or exchangeable propose the sale or exercisable forissuance of, pledge or options, warrants, calls, commitments purchase or rights of any kind to acquirepropose the purchase of, any shares of its capital stock of any classclass or securities convertible into, Rightsor rights, warrants or options to acquire, any Voting Debt such shares or other convertible securities;
(4) The Company shall not amend its certificate of incorporation or its bylaws;
(5) The Company shall not sell, lease, pledge, encumber or otherwise dispose of or agree to sell, lease, pledge, encumber or otherwise dispose of, any of its assets that are material or any other property or assets (other except in the Ordinary Course of Business and in no event amounting in the aggregate to more than shares of Company Common Stock and associated Rights issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans); or (ii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire or encumber any material property or material assets (including capital stock of any of its Subsidiaries) or business$25,000;
(d6) neither it nor any of its Subsidiaries The Company shall restructure, recapitalize, reorganize or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the operation of its assets or businesses or adopt resolutions providing for or authorizing any of the foregoing;
(e) neither it nor any of its Subsidiaries shall acquire (i) by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, except purchases of inventory and raw materials in the ordinary course of business (or as permitted by Section 7.1(g), whether or not material);
(f) neither it nor any of its Subsidiaries shall (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business), (ii) issue, or issue or sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(g) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters);
(h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and others other than in the ordinary course of business consistent with past practice); provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time prior practice and in no event amounting in the futureaggregate to more than $25,000;
(7) The Company shall not make any capital expenditures in excess of $25,000 individually or $100,000 in the aggregate without the Purchaser's prior written consent;
(8) The Company shall maintain the levels of inventory, materially increases materials and supplies used in the labor or operating costs business of the Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measuresconsistent with past practice;
(l9) neither it nor any The Company shall not accelerate the collection of its Subsidiaries shall make accounts receivable or rescind any material Tax election, amend any material Tax Return delay the payment of its accounts payable or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminatedother liabilities, in each case except arising out of the operation of the business of the Company in a manner consistent which would be inconsistent with past practice or as required by applicable Lawpractice;
(m10) The Company shall not adopt or amend in any material respect any collective bargaining agreement or Employee Benefit Plan;
(11) The Company shall not grant to any employees any increase in compensation or in severance or termination pay, or enter into any employment agreement with any employee;
(12) The Company shall not acquire (by merger, consolidation or acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or subdivision thereof, or make any investment by either purchase of stock or securities, contributions to capital, property transfer or, except in the Ordinary Course of Business, purchase of any property or assets, of any other individual or entity;
(13) The Company shall not make any material Tax election or settle or compromise any material Tax liability;
(14) The Company shall not waive, release, grant or transfer any rights of material value or modify or change in any material respect any Material Contract other than with respect to any actions permitted under Section 7.2, neither it nor any in the Ordinary Course of its Subsidiaries Business;
(15) The Company shall not take any action action, or omit fail to take any action action, that is not in the Ordinary Course of Business or that is reasonably likely to result in any of the conditions to representations and warranties of the Merger Company and the Shareholders set forth in Article VIII not being satisfiedthis Agreement becoming untrue in any material respect;
(16) The Company shall maintain in full force and effect all insurance coverages for its properties and assets substantially comparable to coverages existing on the date hereof;
(17) Within (i) forty five (45) days of the close of each month after the execution of this Agreement, the Company shall make available to the Purchaser a preliminary balance sheet and income statement for the Company disclosing the financial position and results of operations of the Company for the preceding month and year-to-date; and
(n18) neither it nor any of its Subsidiaries will authorize any ofThe Company shall not enter into, or commit, resolve or agree, in writing or otherwise, to takemodify, any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent contract with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operationsa Related Party.
Appears in 1 contract
Interim Operations. The Company covenants and agrees as to itself and its Subsidiaries Subsidiary that, after the date hereof and prior to the Effective Time (Time, unless Parent shall otherwise consent approve in writing, which consent approval shall not be unreasonably be withheldwithheld or delayed, it shall comply with all of the covenants provided in this Section 5.1 (provided, however, with respect to the covenants in subsections (c)(v), (f), (g), (k), (l), and (m) only, Company shall comply with such covenant unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld or delayed, it being agreed that Parent's approval shall be deemed to have been given if Parent does not provide to the Company written notice of its objection within three(3) Business Days of written notice from the Company), except as otherwise expressly contemplated by this Agreement or as set forth in this Agreement)::
(a) the business of it and its Subsidiaries Subsidiary shall be conducted in the ordinary and usual course consistent with past practices and, to the extent consistent therewith, it and its Subsidiaries Subsidiary shall use their respective commercially reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, strategic partners, creditors, lessors, employees and business associates;
(b) it shall not not, (i) issue, sell, pledge, sell or otherwise dispose of or encumber any capital stock subject to Lien (other than Permitted Liens) its Subsidiary's Capital Stock owned by it in any of its Subsidiariesit; (ii) amend its certificate of incorporation charter or by-lawsbylaws; (iii) other than in the case of wholly-owned subsidiaries, split, combine or reclassify its outstanding shares of capital stockCapital Stock; (iv) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, other than dividends from its direct or indirect wholly-owned SubsidiariesCapital Stock; or (v) purchaserepurchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, acquire or permit any of its Subsidiaries Subsidiary to purchase or otherwise acquire, any shares of its capital stock Capital Stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stockCapital Stock; (vi) form, organize or capitalize any Subsidiary; or (vii) adopt a plan of complete or partial liquidation or dissolution, merger or otherwise restructure or recapitalize or consolidate with any Person other than Merger Sub;
(c) neither it nor any of its Subsidiaries Subsidiary shall (i) authorize for issuance or issue, sell, pledge, sell or otherwise dispose of or encumber subject to any Lien (Aother than Permitted Liens) any shares of its capital stock of any class, Rights or any Voting DebtCapital Stock, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock Capital Stock of any class, Rights, class or any Voting Debt or any other property or assets (other than shares of Company Common Stock and associated Rights Shares issuable pursuant to options and other stock-based awards Company Options outstanding on the date hereof under the Company Stock Planshereof); or (ii) transfer, lease, license, guarantee, sellsell or otherwise dispose of or subject to any Lien (other than Permitted Liens) any other property or assets or incur or modify any indebtedness or other liability; (iii) assume, mortgageguarantee, pledgeendorse or otherwise become liable or responsible (whether directly, dispose contingently or otherwise) for the obligations of any other Person; (iv) make any loans to any other Person (other than to the Subsidiary or customary loans or advances to employees in connection with business-related travel in the ordinary course of business consistent with past practices); or (v) make any commitments for, make or authorize any capital expenditures other than in amounts less than $10,000 individually and $50,000 in the aggregate (unless and to the extent fully paid for in advance by a customer of the Company) or, by any means, make any acquisition of, abandonor investment in, cancel, surrender assets or allow to lapse or expire or encumber any material property or material assets (including capital stock of any of its Subsidiaries) or businessother Person;
(d) except as may be required to comply with applicable law or by existing contractual commitments, neither it nor its Subsidiary shall (i) enter into any new agreements or commitments for any severance or termination pay to, or enter into any employment or severance agreement with, any of its Subsidiaries shall restructuredirectors, recapitalizeofficers or employees or consultants except for specific arrangements required as a condition to closing of the Merger or (ii) terminate, reorganize establish, adopt, enter into, make any new grants or completely or partially liquidate or adopt a plan of complete or partial liquidation awards under, amend or otherwise enter into modify, any agreement Compensation and Benefit Plan or arrangement imposing material changes increase or restrictions on accelerate the operation salary, wage, bonus or other compensation of its assets any employees or businesses directors or adopt resolutions providing for consultants or authorizing pay or agree to pay any of the foregoingpension, retirement allowance or other employee benefit not required by any existing Compensation and Benefit Plan;
(e) neither it nor its Subsidiary shall, except as may be required as a result of a change in law or in GAAP, change any of its Subsidiaries shall acquire (i) the accounting principles or practices used by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, except purchases of inventory and raw materials in the ordinary course of business (or as permitted by Section 7.1(g), whether or not material)it;
(f) neither it nor any its Subsidiary shall, except as may be required under GAAP in connection with the audit of its Subsidiaries shall the 2002 Financial Statements (ias defined in Section 6.2(l)) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business), (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities preparation of the Company or any of its SubsidiariesReports after the date hereof, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(g) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters);
(h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except each case in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign revalue in any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or respect any of its Subsidiaries to (i) enter into any Contract assets, including writing-down the value of the type specified in Section 5.5(a)(viii) inventory or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Timewriting-off notes or accounts receivable, or modify or amend in a manner adverse to the Company or make any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase adjustment in any respect the compensation accrual or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and reserve other than in the ordinary course of business consistent with past practice)practices; provided, however, that notwithstanding no adjustments greater than $100,000 in the aggregate shall be made in the Company's PECFA reserve;
(g) neither it nor its Subsidiary shall settle or compromise any other provision of this Agreement, neither the Company nor claims or litigation or terminate or amend or modify any of its Subsidiaries shall enter into material Contracts or waive, release or assign any rights or claims, except (i) PECFA claims where the difference between the claim value and the settlement of amount is less than $25,000 and (ii) other claims or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the litigation less than $10,000 if such settlement or compromise would be in excess of any reserve or at accrual on the Balance Sheet with respect to such claim;
(h) neither it nor its Subsidiary shall make any time in Tax election or, to the future, materially increases extent within the labor or operating costs control of the Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measures;
(l) neither it nor any of its Subsidiaries shall make or rescind any material Tax electionSubsidiary, amend any material Tax Return or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled canceled or terminated, in each case except in a manner consistent with past practice or as required by applicable Law;
(mi) other than with respect to any actions permitted under Section 7.2, neither it nor any of its Subsidiaries Subsidiary shall take any action or omit to take any action that is reasonably likely would cause any of its representations and warranties herein to result become untrue in any material respect;
(j) neither it nor its Subsidiary will authorize or enter into any agreement to do any of the conditions foregoing;
(k) neither it nor its Subsidiary shall enter into any agreement to perform work reimbursable under the Merger set forth PECFA program unless, as a part of all agreements for such work, it expressly disclaims in Article VIII writing any obligation to guarantee or reimburse any amounts not being satisfiedpaid by the State of Wisconsin under such program;
(l) neither it nor its Subsidiary shall enter into any agreement to provide services having a value of, or with projected revenues over the life of the project, greater than $100,000 and not on the Company's standard terms and conditions; and
(nm) neither it nor its Subsidiary shall enter into any of its Subsidiaries will authorize agreement or arrangement pursuant to which it grants any ofcustomer or any other person a license or other rights in any Intellectual Property, invention, development or commit, resolve or agree, in writing or otherwise, improvement to take, any of the foregoing actions; provided, however, that nothing contained pre-existing Intellectual Property. Nothing in this Agreement subsection shall give to Parent, directly or indirectly, prevent the Company from vesting in a customer the rights to control or direct project data and reports generated in the operations course of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operationsperforming services for that customer.
Appears in 1 contract
Samples: Merger Agreement (Envirogen Inc)
Interim Operations. The (a) Subject to Section 6.1.A., the Company covenants and agrees as to itself and its Subsidiaries that, that after the date hereof Second Amendment Date and prior to the Effective Time (unless Parent shall otherwise consent approve in writing, which consent approval shall not be unreasonably be withheldwithheld or delayed, and except as otherwise expressly contemplated by this Agreement or as set forth in this Agreement):
(ai) the business of it the Company and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially best reasonable efforts to (A) preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, strategic partners, creditors, lessors, employees and business associatesassociates and (B) maintain and keep material properties and assets in as good repair and condition as such are in as of the date hereof, subject to ordinary wear and tear;
(bii) it the Company shall not (iA) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (iiB) amend its certificate articles of incorporation or by-lawslaws or amend, modify or terminate the Rights Agreement; (iiiC) other than in the case of wholly-owned subsidiaries, split, combine combine, subdivide or reclassify its outstanding shares of capital stock; (ivD) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, stock (other than dividends from its direct or indirect wholly-wholly owned Subsidiaries and other than regular quarterly cash dividends not in excess of $0.255 per Share and regular quarterly cash dividends on the preferred and preference stock of its Subsidiaries); or (vE) purchaserepurchase, redeem or otherwise acquire, acquire (except for (I) mandatory sinking funds obligations existing on the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options date hereof and (II) open market repurchases pursuant to the extent required or permitted under the terms of such Company the Company's Direct Stock OptionsPurchase Plan and Dividend Reinvestment Plan), or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(ciii) neither it the Company nor any of its Subsidiaries shall (iA) issue, sell, pledge, dispose of or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debtof, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class, Rights, any Voting Debt class or any other property or assets (other than shares of Company Common Stock and associated Rights (I) Shares issuable pursuant to options and other stock-based awards rights outstanding on the date hereof under the Company Stock Plans, issuances of additional options or rights to acquire Shares granted pursuant to the terms of the Stock Plans as in effect on the date hereof in the ordinary and usual course of the operation of such Stock Plans and issuances of Shares pursuant to options granted after the date hereof pursuant to the Stock Plans and (II) Shares issuable pursuant to the terms of the outstanding Feline Prides); or (iiB) (I) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire of or encumber any material of its coal fines property or material assets assets, or, (including capital stock of any of its SubsidiariesII) or business;
(dexcept as identified on Section 6.1(a)(iii) neither it nor any of its Subsidiaries shall restructure, recapitalize, reorganize or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the operation of its assets or businesses or adopt resolutions providing for or authorizing any of the foregoing;
(e) neither it nor any of its Subsidiaries shall acquire (i) by merging or consolidating withCompany Disclosure Letter, or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, except purchases of inventory and raw materials than in the ordinary and usual course of business (or as permitted by Section 7.1(g), whether or not material);
(f) neither it nor any of its Subsidiaries shall (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (and other than sales not in excess of $10,000,000 in the aggregate or $1,000,000 in respect of any transaction or series of related transactions, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber any other property or assets; (C) make or authorize or commit for any capital expenditures or operation and maintenance expenditures in excess of 100% of those contemplated to be spent pursuant to the Credit Agreement year 1999, 2000 or 2001 capital appropriations/spending budgets set forth in the ordinary course of business), (iiSection 6.1(a) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company Disclosure Letter; or (D) by any of its Subsidiariesmeans, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions toacquisition of, or investment in, assets or stock of, or other interest in, any other Person, other than the Company Person or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(g) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment entity in excess of $10 million per quarter 10,000,000 in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures or $3,000,000 in respect of any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters)transaction or series of related transactions;
(h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on in Section 7.1(j6.1(a)(iv) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect theretoLetter, neither the Company nor any of its Subsidiaries shall initiate, settle (A) accelerate or compromise any litigation, claim, grievance, charge delay collection of notes or proceeding involving any Intellectual Property accounts receivable in advance of or any other material litigation, claim, grievance, charge beyond their regular due dates or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business dates consistent with past practice); providedpractice or (B) change any significant accounting principle, howeverpractice or method, except to the extent required by U.S. GAAP as advised by the Company's regular independent accountants and after consultation with Parent;
(v) neither the Company nor any of its Subsidiaries shall take or fail to take any action that notwithstanding is reasonably likely to make any representation or warranty of the Company contained herein inaccurate in any material respect at, or as of any time prior to, the Effective Time, or that is, individually or in the aggregate, reasonably likely to have a Material Adverse Effect;
(vi) except as required by applicable Law, an existing collective bargaining agreement or other provision Contract identified in Section 6.1(a)(vi) of this Agreementthe Company Disclosure Letter, neither the Company nor any of its Subsidiaries shall terminate, establish, adopt, enter into into, make any settlement new grants or awards under, amend or otherwise modify, any Compensation and Benefit Plans (other than issuances of additional options, performance shares or compromise any litigation, claim, grievance, charge or proceeding that, whether at rights to acquire Shares granted pursuant to the time terms of the settlement or compromise or at any time Stock Plans as in effect on the date hereof in the futureordinary and usual course of the operation of such Stock Plans, materially provided, that any such additional options, performance shares or rights to acquire Shares shall not vest in connection with the Merger and the other transactions contemplated by this Agreement), or except as required by any existing contract with a non-officer employer increase the salary, wage, bonus or other compensation of any employees, except increases occurring in the labor ordinary and usual course of business (which shall include normal periodic performance reviews and related compensation and benefit increases);
(vii) except as required by applicable law, an existing collective bargaining agreement or operating costs other Contract identified in Section 6.1(a)(vii) of the Company or Disclosure Letter, neither the Company nor any of its Subsidiaries shall grant any severance or places termination pay to, or enter into any material restrictions on employment or severance agreement with any director or officer of it or such Subsidiaries, provided, that the ability foregoing shall not require the Company to violate any of its obligations existing prior to the date hereof as set forth in Section 5.1(h) of the Company or Disclosure Letter;
(viii) neither the Company nor any of its Subsidiaries to impose shall settle or compromise any labor saving material claims or other cost reduction measureslitigation or amend or terminate any of its material Contracts or waive, release or assign any material rights or claims;
(lix) neither it the Company nor any of its Subsidiaries shall make any Tax election (other than in the ordinary and usual course or rescind any material Tax election, amend any material Tax Return as is required by Law) or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled canceled or terminated, in each case terminated except in a manner consistent with past practice or as required by applicable Lawthe ordinary and usual course of business;
(mx) neither the Company nor any of its Subsidiaries shall make any filing (other than in the ordinary and usual course) with the MPSC, SEC or MPSC; and
(xi) neither the Company nor any of its Subsidiaries will authorize or enter into an agreement to do any of the foregoing.
(b) Parent covenants and agrees as to itself and its Subsidiaries that after the date hereof and prior to the Effective Time (unless the Company shall otherwise approve, which approval shall not be unreasonably withheld or delayed, and except as otherwise expressly contemplated by this Agreement):
(i) the business of Parent and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective best reasonable efforts to (A) preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, creditors, lessors, employees and business associates and (B) maintain and keep material properties and assets in as good repair and condition as such are in as of the date hereof, subject to ordinary wear and tear;
(ii) it shall not (A) amend its articles of incorporation or by-laws; (B) split, combine, subdivide or reclassify its outstanding shares of capital stock; (C) declare, set aside or pay any dividend payable, in cash, stock or property in respect of any capital stock, other than dividends from its direct or indirect wholly owned Subsidiaries and other than regularly quarterly cash dividends not in excess of $0.515 per share of Parent Common Stock and regularly quarterly cash dividends on the preferred and preference stock of its Subsidiaries; or (D) repurchase, redeem or otherwise acquire, or permit any of its Subsidiaries to purchase or otherwise acquire, any actions permitted shares of Parent Common Stock or any securities convertible into or exchangeable or exercisable for any shares of Parent Common Stock (other than repurchases, redemptions or other acquisitions which are made at the then-prevailing market price of Parent Common Stock on the NYSE and which in the aggregate do not exceed ten percent of the shares of Parent Common Stock outstanding as of the date hereof);
(iii) neither Parent nor any of its Subsidiaries shall, (A) issue, sell, pledge, dispose of or encumber any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of Parent Common Stock (other than (I) shares of Parent Common Stock issuable pursuant to options outstanding on the date hereof under Section 7.2the Parent Stock Plan, issuances of additional options or rights to acquire shares of Parent Common Stock granted pursuant to the terms of the Parent Stock Plan as in effect on the date hereof in the ordinary and usual course of the operation of such Parent Stock Plan and issuances of shares of Parent Common Stock pursuant to options granted after the date hereof pursuant to the Parent Stock Plan and (II) issuances of Parent Common Stock, or securities convertible with or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, shares of Parent Common Stock, to a third-party on arms-length terms not in excess of 20% of the number of shares of Parent Common Stock outstanding as of the date hereof) or (B) acquire "Beneficial Ownership" (as such term is defined in the Rights Agreement) of any Shares;
(iv) neither it Parent nor any of its Subsidiaries shall take any action or omit fail to take any action that is reasonably likely to result make any representation or warranty of such party contained herein inaccurate in any material respect at, or as of any time prior to, the conditions Effective Time, or that is, individually or in the aggregate, reasonably likely to the Merger set forth in Article VIII not being satisfiedhave a Material Adverse Effect; and
(nv) neither it Parent nor any of its Subsidiaries will authorize any of, or commit, resolve or agree, in writing or otherwise, enter into an agreement to take, do any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operationsforegoing.
Appears in 1 contract
Samples: Agreement and Plan of Merger (MCN Energy Group Inc)
Interim Operations. The Company covenants and agrees as to itself and its Subsidiaries that, after (a) During the period from the date hereof and prior of this Agreement to the earlier of the Effective Time and the date, if any, on which this Agreement is terminated pursuant to Section 6.1, except
(unless Parent shall otherwise i) as required by Law, (ii) with the prior written consent in writingof Newco, which consent shall not be unreasonably be withheld, and except delayed or conditioned or (iii) as otherwise expressly contemplated or permitted by this Agreement or as set forth in this Agreement):
(a) , the business of it Company shall, and shall cause its Subsidiaries shall be conducted to, carry on its business in the ordinary course and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable efforts to preserve intact its business organization intact and listing exchange status, keep available the services of its current officers and employees, maintain in effect all material licenses and permits required to carry on their respective businesses, maintain in effect any exemptive orders or exemptive relief which they have received from the SEC and which are currently in effect, and preserve their material business relationships and maintain generally its existing relations business relationships with its lenders and goodwill others having business relationships with customersit; provided, suppliershowever, distributors, strategic partners, creditors, lessors, employees and business associates;that no action by the Company or any of its Subsidiaries with respect to matters addressed specifically by any provision of this Section 4.1 shall be deemed a breach of this sentence unless such action would constitute a breach of such specific provision.
(b) it shall not Without limiting the generality of the foregoing, during the period from the date of this Agreement to the earlier of the Effective Time and the date, if any, on which this Agreement is terminated pursuant to Section 6.1, except (i) issueas may be required by Law, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (ii) amend its certificate with the prior written consent of incorporation Newco, which consent shall not be unreasonably withheld, delayed or by-laws; conditioned, or (iii) other than in the case of wholly-owned subsidiariesas required, split, combine or reclassify its outstanding shares of capital stock; (iv) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, other than dividends from its direct or indirect wholly-owned Subsidiaries; or (v) purchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required contemplated or permitted under by this Agreement, the terms of such Company Stock Optionsshall not, or and shall not permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;to:
(c) neither it nor any of its Subsidiaries shall (iA) issue, deliver, sell, pledgedispose of, dispose pledge or otherwise encumber, amend the terms of, or authorize or propose the issuance, sale, disposition or pledge or other encumbrance of or encumber (A1) any shares of its capital stock of any class, Rights or any Voting Debt, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class, Rights, any Voting Debt class or any other property or assets (other than shares of Company Common Stock and associated Rights issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans); or (ii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire or encumber any material property or material assets (including capital stock of any of its Subsidiaries) or business;
(d) neither it nor any of its Subsidiaries shall restructure, recapitalize, reorganize or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the operation of its assets or businesses or adopt resolutions providing for or authorizing any of the foregoing;
(e) neither it nor any of its Subsidiaries shall acquire (i) by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, except purchases of inventory and raw materials in the ordinary course of business (or as permitted by Section 7.1(g), whether or not material);
(f) neither it nor any of its Subsidiaries shall (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business), (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities ownership interest of the Company or any of its Subsidiaries, guarantee or any debt securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of capital stock or any other ownership interest of the Company or any of its Subsidiaries, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of capital stock or any other ownership interest of the Company or any of its Subsidiaries or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of capital stock or any other ownership interest of the Company or any of its Subsidiaries, or (2) any other securities of another Personthe Company or any of its Subsidiaries in respect of, in lieu of, or in substitution for, Company Common Stock outstanding on the date hereof;
(B) redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any outstanding Company Common Stock;
(C) split, combine, subdivide or reclassify any Company Common Stock or, except as provided in Section 4.14, declare, set aside for payment or pay any dividend (whether in cash, stock or property, or any combination thereof) in respect of any Company Common Stock or otherwise make any payments to stockholders in their capacity as such;
(D) 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 Transactions;
(E) enter into any new line of business;
(F) other than in the ordinary course of business and consistent with past practices, redeem, repurchase, prepay, defease, incur or otherwise acquire or amend or modify the terms of any indebtedness for borrowed money, enter into any “"keep well” " or other agreement to maintain any financial statement condition of another Person or pledge any of the Company's assets or enter into any arrangement having which would have the economic effect of any of the foregoing, in each case, in addition to that incurred as of the date of this Agreement or guarantee any such indebtedness;
(iiiG) make any loansinvestment, advances investment contract or loan (other than routine advances to employees any unfunded commitments existing as of the Company and its Subsidiaries in the ordinary course date hereof) either by sale or purchase of business) stock or capital securities or otherwise, contributions toto capital, property transfers, or investment in, purchase of any property or assets of any other Personindividual, Person or other entity (other than the Company or any of its direct or indirect wholly owned Subsidiariesa Subsidiary), or (iv) other than in the ordinary course of businesssell, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(g) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures dispose of, transfer, lease, amend, modify, grant waivers with respect to propertyor discontinue any investment, plant investment contract or equipment in excess loan; or acquire, sell, lease or dispose of $10 million per quarter any non-investment assets that, in the aggregate for aggregate, are material to the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in whole, to any quarter are less Person other than $10 million, the shortfall shall be available to the Company to spend in future quarters)a wholly-owned Subsidiary;
(hH) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except provided for in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign grant any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c)increase in, take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to vesting or payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of, the compensation and benefits of compensation any of the Company's directors, officers, consultants or benefits under employees, enter into any employment or severance agreement with any such director, officer, consultant or employee, or adopt, terminate or materially amend any Company Benefit Plan;
(I) make any material change in any of the financial accounting principles, practices or methods used by the Company unless required by GAAP or applicable Law;
(J) change its fiscal year;
(K) amend any material Tax Return of the Company, make, revoke or amend any material Tax election of the Company, adopt or change any Tax accounting principles, methods or policies other than as required by applicable Law, change any Tax accounting period, enter into any closing agreement as described in Section 7121 of the Code (or any corresponding or similar agreement under applicable state, local or foreign tax Law) affecting any material Tax liability or refund, or settle or compromise any material Tax liability or refund of the Company;
(L) directly or indirectly take any action, or knowingly fail to take any action, which action or failure to act is reasonably likely to cause the Company to fail to qualify or not be subject to tax as a RIC; provided, however, this that on or before the Effective Time, the Company shall (if not adequately provided for by the Special Dividend contemplated by Section 7.1(j4.14) shall take such actions as are necessary to ensure that (i) the Company would not prevent be subject to the tax imposed under Section 4982(a) of the Code if the Effective Time were the end of the calendar year, (ii) the Company satisfies the requirements Section 852(a) of the Code for its last federal income tax year, and (iii) the Company is not subject to tax under Section 852(b)(1) or 852(b)(3)(A) of the Code in its last federal income tax year.
(M) make or incur any obligation to make any capital expenditures;
(N) enter into or draw down from any contract, agreement, commitment or arrangement whereby the obligation or liability imposed on the Company or any of its Subsidiaries from (x) prior under such contract, agreement, commitment or arrangement would exceed $50,000, or whereby such contract, agreement, commitment or arrangement would otherwise constitute a Company Material Contract, or amend any contract, agreement, commitment or arrangements in existence on the date hereof that, after giving effect to the Closing Datesuch amendment, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses would impose an obligation or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of liability on the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor or any of its Subsidiaries shall initiateunder such contract, agreement, commitment or arrangement in excess of $50,000 or constitute a Company Material Contract;
(O) except as otherwise provided in this Agreement, enter into, terminate, cancel, renew or agree to any material amendment of, change in or waiver under any Company Material Contract;
(P) commence or settle or compromise any litigation, material claim, grievancesuit, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge action or proceeding (other than in connection with or with respect to this Agreement or any of the enforcement Transactions);
(Q) amend the certificate of incorporation or bylaws of the Company or similar governing documents of any of its Subsidiaries; or
(R) enter into any contract, agreement, commitment or arrangement to do any of the foregoing.
(c) During the period from the date of this Agreement to the earlier of the Effective Time and the date, if any, on which this Agreement is terminated pursuant to Section 6.1, Newco shall not (i) incur any liabilities or obligations (other than in connection with its formation, its initial capitalization and the Transactions contemplated in this Agreement and the transactions contemplated by the Subscription Agreement), (ii) declare or pay any dividend or distribution or (iii) take any action that could impair its ability to pay and perform its obligations under Section 6.2 upon a termination of this Agreement. Newco will procure that, during the period from the date of this Agreement to the earlier of the Effective Time and the date on which this Agreement is terminated pursuant to Section 6.1, except (i) as required by Law or, (ii) with the prior written consent of the Company’s rights under this Agreement , which consent shall not be unreasonably withheld, delayed or conditioned, MAST and other than the Funds will manage the MAST Portfolio Assets in the ordinary course of business consistent with past practice); provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measures;
(l) neither it nor any of its Subsidiaries shall make or rescind any material Tax election, amend any material Tax Return or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, in each case except in a manner consistent with past practice and, without limiting the generality of the foregoing, none of MAST or as required by applicable Law;
the Funds will subject any of the MAST Portfolio Assets to any Encumbrance that would prohibit the transfer of such asset to Newco under the Subscription Agreement. For the avoidance of doubt, the Funds will provide the Company prompt notice in the event that any of them (mA) other than agree to any modification of or waiver or forbearance under any MAST Portfolio Loan Document, or waive or fail to enforce any material right under any MAST Portfolio Loan Document or (B) consent to any release of collateral relating to any MAST Portfolio Asset. Newco will procure that, during the period from the Measurement Date to the earlier of the Effective Time and the date, if any, on which this Agreement is terminated pursuant to Section 6.1, neither MAST nor any of the Funds will execute any trade with respect to any actions permitted under Section 7.2MAST Portfolio Asset except (i) as may be required by Law, neither it nor any of its Subsidiaries shall take any action or omit to take any action that is reasonably likely to result in any (ii) with the prior written consent of the conditions to the Merger set forth in Article VIII Company, which consent shall not being satisfied; and
(n) neither it nor any of its Subsidiaries will authorize any ofbe unreasonably withheld, delayed or conditioned, or commit, resolve or agree, in writing or otherwise, to take, any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of (iii) as required by this Agreement, complete control and supervision of its and its Subsidiaries’ operations.
Appears in 1 contract
Interim Operations. The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless Parent shall otherwise consent in writing, which consent shall not unreasonably be withheld, and except Except as otherwise expressly contemplated by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as agreed to in writing by Parent, the Company covenants and agrees that during the period from the date of this AgreementAgreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(a) the business and operations of it the Company and its Subsidiaries subsidiaries shall be conducted only in the ordinary course of business and usual course and, to the extent consistent therewith, it Company and its Subsidiaries subsidiaries shall use their respective commercially reasonable efforts to preserve its intact their current business organization intact organizations, keep available the services of their current officers and maintain its existing relations employees and preserve their relationships and goodwill with customers, suppliers, their material distributors, strategic partners, creditors, lessors, employees customers and suppliers and any other material third parties having business associates;dealings with them.
(b) it the Company shall not (i) authorize for issuance, issue, selldeliver, pledgesell or agree or commit to issue, dispose sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock owned by it in or the capital stock of any of its Subsidiaries; subsidiaries, any other securities or any securities convertible into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including without limitation stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof, (ii) amend its certificate of incorporation or by-laws; (iii) other than in the case of wholly-owned subsidiaries, split, combine or reclassify its outstanding shares of capital stock; (iv) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, other than dividends from its direct or indirect wholly-owned Subsidiaries; or (v) purchaserepurchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, or permit any of its Subsidiaries subsidiaries to purchase repurchase, redeem or otherwise acquire, any shares of its capital stock or any securities convertible into other equity interests of the Company or exchangeable or exercisable for any shares of its capital stock;
(c) neither it nor any of its Subsidiaries shall subsidiaries (i) issueincluding, sellwithout limitation, pledge, dispose of or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debt, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its subsidiaries), (iii) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its subsidiaries, (iv) amend or otherwise change its articles of incorporation or bylaws or permit any of its subsidiaries to amend its articles of incorporation, bylaws or equivalent organizational documents or (v) split, combine or reclassify any shares of its capital stock, and shall not permit any of its subsidiaries to split, combine or reclassify any shares of its capital stock;
(c) the Company shall not, and shall not permit any of its subsidiaries to (i) declare, set aside or pay any dividends on (whether in cash, stock of or other property), or make any class, Rightsother distributions in respect of, any Voting Debt of its capital stock (except for dividends paid by direct or any other property or assets (other than shares of Company Common Stock and associated Rights issuable pursuant indirect wholly owned subsidiaries to options and other stock-based awards outstanding on the date hereof under the Company Stock PlansCompany); or , (ii) transferacquire or agree to acquire, leaseincluding, licensewithout limitation, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire or encumber any material property or material assets (including capital stock of any of its Subsidiaries) or business;
(d) neither it nor any of its Subsidiaries shall restructure, recapitalize, reorganize or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the operation of its assets or businesses or adopt resolutions providing for or authorizing any of the foregoing;
(e) neither it nor any of its Subsidiaries shall acquire (i) by merging or consolidating with, or by purchasing all or a substantial portion of the assets (except raw materials, inventory or supplies in the ordinary course of business) or any capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, (iii) authorize or make any capital expenditures in excess of $200,000 (the “Capital Expenditures Excess Amount”) in the aggregate in addition to the amount set forth in the Company’s budget for capital expenditures for the period of time between the date hereof and the Effective Time (which capital budget is set forth in Section 5.01(c) of the Company Disclosure Schedule), or (iv) enter into, amend, modify or supplement any agreement, transaction, commitment or arrangement with any current or former officer, director, employee or other affiliate of the Company or any of its subsidiaries (or any affiliate of any of the foregoing) other than as contemplated by this Agreement;
(d) neither the Company nor any of its subsidiaries shall (i) grant or agree to any increase in any manner the compensation or fringe benefits of, or pay any bonus to, any current or former director, officer or employee except for (A) increases and bonuses expressly contemplated by or required under existing employment agreements or (B) bonus plans and other agreements and arrangements listed or described in Section 5.01(d) of the Company Disclosure Schedule and except in connection with terminating the Options and the Stock Plans, (ii) enter into any assets new or materially amend any existing employment, consulting, severance, termination, change-of-control or indemnification agreement with any current or former director, officer or employee of the Company, (iii) except as may be required to comply with applicable Law and except as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that are materialwas not in existence on the date hereof or amend, individually modify or terminate any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the aggregatedate hereof or (iv) except as may be required to comply with applicable Law and except as provided or otherwise contemplated in this Agreement (including, to without limitation, Section 2.02 hereof), pay any benefit not required by any plan or arrangement as in effect as of the date hereof (including, without limitation, the granting of, acceleration of, exercisability of or vesting of stock options, stock appreciation rights or restricted stock, except as otherwise contemplated by this Agreement), except in connection with terminating the Options and the Stock Plans and except for the payment of the employer match under the Company’s 401(k) plan;
(e) the Company shall not, and shall not permit any of its Subsidiariessubsidiaries to, taken as a wholesell, except purchases lease, license, mortgage or otherwise encumber or subject to any Lien or otherwise dispose of, or agree to sell, lease, license, mortgage or otherwise encumber or subject to any Lien or otherwise dispose of, any of its properties or assets other than (i) immaterial properties or assets (or immaterial portions of properties or assets), (ii) inventory and raw materials in the ordinary course of business consistent with past practice, (iii) licenses granted by the Company in the ordinary course of business to customers for such customers’ use of the Company’s products and services, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as permitted to which appropriate reserves have been established by Section 7.1(g)the Company in accordance with U.S. generally accepted accounting principles, whether (v) Liens for assessments and other governmental charges or not material);
(f) neither it nor any Encumbrances of its Subsidiaries shall (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement landlords, carriers, warehousemen, mechanics and repairmen incurred in the ordinary course of business), in each case for sums not yet due and payable or due but not delinquent or being contested in good faith and for which adequate reserves have been established and (iivi) issueLiens incurred in the ordinary course of business in connection with workers’ compensation, sell unemployment insurance and other types of social security or amend to secure the performance of tenders, statutory obligations, surety and appeal bonds, bids, leases, government contracts, performance and return of money bonds and similar obligations;
(f) the Company shall not, and shall not permit any of its subsidiaries to (i) incur, assume or pre-pay any Indebtedness or enter into any agreement to incur, assume or pre-pay any Indebtedness, or guarantee, or agree to guarantee, any such Indebtedness or obligation of another person, or issue or sell, or agree to issue or sell, any debt securities or options, warrants or other calls or rights to acquire any debt securities of the Company or any of its Subsidiariessubsidiaries, guarantee any debt securities of another Personothers, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person person or enter into any arrangement having the economic effect of any of the foregoing, (iiiii) make or forgive any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, guarantees for the benefit of, or investment investments in, any other Personperson or entity, other than loans between or among the Company or and any of its direct or indirect wholly wholly-owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(g) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter in the aggregate for the Company subsidiaries and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available cash advances to the Company to spend in future quarters);
(h) neither it nor Company’s or any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or such subsidiary’s employees for reimbursable travel and other reserve;
(i) neither it nor any of its Subsidiaries shall, except business expenses incurred in the ordinary course of business consistent with past practicepractice or (iii) assume, enter intoguarantee or otherwise become liable or responsible (whether directly, renewcontingently or otherwise) for the obligations of any other Person, modifyexcept for the obligations of the subsidiaries of the Company permitted under this Agreement;
(g) neither the Company nor any of its subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, amenddissolution, terminatemerger, waiveconsolidation, delay the exercise ofrestructuring, release recapitalization or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit other reorganization of the Company or any of its Subsidiaries to subsidiaries (other than any transaction specifically contemplated by this Agreement);
(h) the Company shall not, and shall not permit any of its subsidiaries to, (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Timeinto, or materially amend, modify or amend in a manner adverse to supplement any Material Contract outside the ordinary course of business consistent with past practice (except as may be necessary for the Company or any of to comply with its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viiiobligations hereunder) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise ofrelease, grant, assign or release or assign transfer any of its material rights or claims under(whether such rights or claims arise under a Material Contract or otherwise);
(i) except for customer contracts entered into in the ordinary course of business, any confidentiality, standstill or similar agreement to which the Company shall not, and shall not permit its subsidiaries to, renegotiate or enter into any of its Subsidiaries is bound by new license, agreement or subjectarrangement relating to any Proprietary Rights;
(j) neither the Company and its subsidiaries (i) shall comply with their obligations under the Material Contracts as such obligations become due, (ii) shall continue in force insurance covering risks of such types and in such amounts as are consistent with the Company’s past practices and (iii) shall not permit any insurance policy naming it nor as beneficiary or loss payable payee to be canceled or terminated;
(k) the Company shall not, and shall not permit any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereofsubsidiaries to, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take establish or acquire any action with respect to, adopt, enter into, terminate subsidiary other than wholly-owned subsidiaries or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for subsidiaries organized outside of the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreementUnited States and its territorial possessions, (ii) take pay, discharge or satisfy any action with respect toclaims, adoptliabilities or obligations (absolute, enter intoaccrued, terminate asserted or amend any employment unasserted, contingent or severance agreement or arrangement for the benefit or welfare of any current or former directorotherwise), officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j(x) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment discharge or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above satisfaction in the ordinary course of business and consistent with past practices as to practice of liabilities reflected on or reserved in the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) financial statements of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than incurred in the ordinary course of business and consistent with past practicepractice or (y) the payment of the Company’s Expenses (as defined herein); provided(iii) amend, however, that notwithstanding modify or waive any other provision term of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs outstanding security of the Company or any of its Subsidiaries or places any material restrictions on subsidiaries, except in connection with terminating the ability of Options and the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measuresStock Plans;
(l) neither it nor the Company shall, and shall cause its subsidiaries to, (i) maintain any real property to which the Company and any of its Subsidiaries shall make subsidiaries have ownership or rescind a leasehold interest (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition, subject to reasonable wear and tear and subject to any casualty or condemnation, (ii) timely pay all material Tax electiontaxes, amend any water and sewage rents, assessments and insurance premiums affecting such real property other than those it is validly contesting and (iii) timely comply in all material Tax Return or permit any insurance policy naming it as a beneficiary or loss-payable payee respects with the terms and provisions of all leases, contracts and agreements relating to be cancelled or terminated, in each case except in a manner consistent with past practice or as required by applicable Lawsuch real property and the use and operation thereof;
(m) other than the Company shall not, and shall not permit any of its subsidiaries to, (i) settle or compromise any pending or threatened suit, action, claim or litigation, except with respect to the settlement or compromise of any actions permitted under Section 7.2such matter which does not involve equitable or injunctive relief and does not obligate the Company and its subsidiaries to make aggregate cash payments exceeding $50,000, neither it nor (ii) change any of the material accounting policies, practices or procedures (including material tax accounting policies, practices and procedures) used by the Company and its subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in U.S. generally accepted accounting principles, (iii) revalue in any material respect any of its Subsidiaries assets (including, without limitation, writing down or writing off any notes or accounts receivable in any material manner), except as required by U.S. generally accepted accounting principles or (iv) make or change any material tax election, make or change any material method of accounting with respect to Taxes except as may be required as a result of a change in applicable Law, settle or compromise any material Tax liability or file any material amended Tax Return;
(n) the Company shall take not, and shall not permit any action of its subsidiaries to knowingly take, or omit knowingly agree or commit to take take, any action that is reasonably likely to to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions to the Merger set forth in Article VIII 6 not being satisfied, or knowingly omit, or knowingly agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied; and
(no) neither it nor the Company shall not, and shall not permit any of its Subsidiaries will authorize any ofsubsidiaries to, agree or commit, resolve or agree, in writing or otherwise, commit to take, do any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operationsforegoing.
Appears in 1 contract
Interim Operations. The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless Parent shall otherwise consent approve in writing, which consent shall not unreasonably be withheld, and except as otherwise expressly contemplated by this Agreement or as the Stock Option Agreement or set forth in this AgreementSection 6.1 of the Company Disclosure Schedule):
(a) the business of it its and its Subsidiaries Subsidiaries's businesses shall be conducted in the ordinary and usual course and(it being understood and agreed that nothing contained herein shall permit the Company to enter into or engage in (through acquisition, product extension or otherwise) the business of selling any products or services materially different from existing products or services of the Company and its Subsidiaries or to enter into or engage in new lines of business without Parent's prior written approval);
(b) to the extent consistent therewith, with (a) above it and its Subsidiaries shall use their respective commercially reasonable best efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, reinsurers, distributors, strategic partners, creditors, lessors, employees and business associates;
(bc) it shall not (i) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (ii) amend its certificate of incorporation charter or by-lawslaws or amend, modify or terminate the Rights Agreement except as contemplated by Section 5.1(q)(ii); (iii) other than in the case of wholly-owned subsidiaries, split, combine or reclassify its outstanding shares of capital stock; (iv) authorize, declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, stock other than dividends from its direct or indirect wholly-owned SubsidiariesSubsidiaries and other than regular quarterly dividends paid by the Company on its Common Shares not in excess of $0.11 per share and regular quarterly dividends paid by the Company on its Preferred Shares in accordance with the Company's Articles of Incorporation; or (v) purchaserepurchase, redeem or otherwise acquire, except for in connection with any of the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock OptionsPlans, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(cd) neither it nor any of its Subsidiaries shall (i) issue, sell, pledge, dispose of or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debtof, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class, Rights, any Voting Debt class or any other property or assets (other than shares of Company Common Stock and associated Rights Shares issuable pursuant to options and other stock-based awards outstanding on the date hereof under any of the Company Stock PlansPlans or upon conversion of the Preferred Shares or Convertible Notes); or (ii) other than in the ordinary and usual course of business, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire or encumber any material property or material assets (including capital stock of any of its Subsidiaries) or business;
(d) neither it nor any of its Subsidiaries shall restructure, recapitalize, reorganize or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the operation of its assets or businesses or adopt resolutions providing for or authorizing any of the foregoing;,
(e) neither it nor any of its Subsidiaries shall acquire (i) by merging terminate, establish, adopt, enter into, make any new grants or consolidating withawards under, amend or otherwise modify, any Compensation and Benefit Plans, other than awards made in the normal course under the Management Incentive Plan in respect of 1997 performance and grants of up to 20,000 restricted Common Shares to be made in January 1998 under the year 2000 Tenure Award Program, or by purchasing all or a substantial portion of increase the assets of or any stock ofsalary, or by any other mannerwage, any business or any corporation, partnership, joint venture, limited liability company, association bonus or other business organization or division thereof, or (ii) compensation of any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, employees except purchases of inventory and raw materials increases occurring in the ordinary and usual course of business (or as permitted by Section 7.1(g), whether or not materialwhich shall include normal periodic performance reviews and related compensation and benefit increases);
(f) neither it nor any of its Subsidiaries shall pay, discharge, settle or satisfy any claims, liabilities or obligations (i) incur any indebtedness for borrowed money absolute, accrued, asserted or guarantee any such indebtedness of another Person (unasserted, contingent or otherwise), other than pursuant to the Credit Agreement payment, discharge or satisfaction of claims, liabilities or obligations legally due and payable and arising in the ordinary and usual course of business), (ii) issueclaims arising under the terms of products, sell contracts or amend any debt securities or warrants or other rights to acquire any debt securities of policies issued by the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Insurance Subsidiaries in the ordinary and usual course of business) business and such other claims, liabilities or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than obligations as shall not exceed $5 million in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange ratesaggregate;
(g) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters);
(h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measures;
(l) neither it nor any of its Subsidiaries shall make or rescind any material Tax election, amend settle any material Tax Return audit, file any amended tax returns or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled canceled or terminated, in each case terminated except in a manner consistent with past practice or as required by applicable Lawthe ordinary and usual course of business;
(mh) other than with neither it nor any of its Subsidiaries shall enter into any agreement containing any provision or covenant limiting in any material respect the ability of the Company or any Subsidiary or affiliate to (A) sell any products or services of or to any actions permitted under Section 7.2other person, (B) engage in any line of business or (C) compete with or to obtain products or services from any person or limiting the ability of any person to provide products or services to the Company or any of its Subsidiaries or affiliates;
(i) neither it nor any of its Subsidiaries shall enter into any new quota share or other reinsurance transaction (A) which does not contain standard cancellation and termination provisions, (B) which, except in the ordinary course of business,
(j) neither it nor any of the Company Insurance Subsidiaries will alter or amend in any material respect their existing investment guidelines or policies;
(k) neither it nor any of its Subsidiaries shall take any action or omit to take any action that is reasonably likely would cause any of its representations and warranties herein to result become untrue in any of the conditions to the Merger set forth in Article VIII not being satisfiedmaterial respect; and
(nl) neither it nor any of its Subsidiaries will authorize any of, or commit, resolve or agree, in writing or otherwise, enter into an agreement to take, do any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operationsforegoing.
Appears in 1 contract
Samples: Merger Agreement (American Bankers Insurance Group Inc)
Interim Operations. The (a) Except as otherwise expressly contemplated by this Agreement, the Company covenants and agrees as to itself and its Subsidiaries that, that from and after the date hereof of this Agreement and prior to the Effective Time (unless Parent shall otherwise consent in writingTime, which consent shall not unreasonably be withheld, and except as otherwise expressly contemplated by this Agreement or as set forth in this Agreement):
(a) the business of it the Company and its Subsidiaries shall be conducted in all material respects in the ordinary and usual course and, to the extent consistent therewith, it the Company shall and shall cause its Subsidiaries shall to use their respective commercially reasonable best efforts to preserve its business organization intact in all material respects and to maintain its in all material respects the Company’s existing relations and goodwill with customers, suppliers, distributorsregulators, strategic partnersagents, resellers, creditors, lessors, employees and business associates;. In addition, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the Effective Time (unless Parent shall otherwise approve in writing (which approval shall not be unreasonably withheld, delayed or conditioned), and except as otherwise expressly contemplated by this Agreement or disclosed in Section 6.1(a) of the Company Disclosure Letter):
(bi) it shall not (i) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (iiA) amend its certificate of incorporation or by-lawslaws or comparable governing instruments; (iiiB) other than in the case of wholly-owned subsidiaries, split, combine combine, subdivide or reclassify its outstanding shares of capital stock; (ivC) declare, set aside or pay any dividend or distribution payable in cash, stock or property in respect of any capital stock, other than than
(I) dividends from and distributions by a wholly owned Subsidiary to its direct or indirect wholly-owned Subsidiariesparent Person and (II) cash dividends on the Series F Preferred required under the Company’s certificate of incorporation; or (vD) other than the redemption of Series F Preferred contemplated by Section 6.17, purchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, or permit acquire any of its Subsidiaries to purchase or otherwise acquire, any its Subsidiaries’ shares of its capital stock or any securities convertible into or exchangeable into or exercisable for any such shares of its capital stock;
(cii) neither it nor any of its Subsidiaries shall (i) issue, sell, pledge, dispose of not merge or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debt, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class, Rights, any Voting Debt or consolidate with any other property or assets (other than shares Person, except for any such transactions among wholly owned Subsidiaries of Company Common Stock and associated Rights issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans); or (ii) transferCompany, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire or encumber any material property or material assets (including capital stock of any of its Subsidiaries) or business;
(d) neither it nor any of its Subsidiaries shall restructure, recapitalize, reorganize or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the operation of its assets or businesses or adopt resolutions providing for or authorizing any of the foregoingliquidation;
(eiii) neither it nor shall not (A) establish, adopt, amend in any material respect or terminate any Company Compensation and Benefit Plan or amend the terms of its Subsidiaries shall acquire any outstanding equity-based awards, except (iI) by merging or consolidating withto comply with applicable Law, or by purchasing all or a substantial portion including the requirements of Section 409A of the assets of or any stock ofCode, or and (II) if the transactions contemplated by any other mannerthis Agreement are not consummated prior to December 31, any business or any corporation2007, partnershipsubject to prior consultation with Parent, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or the Company shall be entitled to establish a 2008 cash bonus plan having terms reasonably comparable in the aggregate, all material respects to the terms of the Company’s 2007 bonus plan; (B) grant or provide any severance or termination payments or benefits to any director, officer or employee of the Company and or any of its Subsidiaries, taken except to comply with applicable Law or the provisions of the Company Compensation and Benefit Plans as a wholein effect on the date hereof or the provisions of this Agreement; (C) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of the Company or any of its Subsidiaries, except purchases for (I) the payment of inventory bonuses in accordance with Company Compensation and raw materials Benefit Plans existing as of the date hereof, (II) the payment of cash bonuses established pursuant to clause (iii)(A)(II) of this Section 6.1(a), (III) increases in base salary in the ordinary course of business consistent with past practice for current, promoted or newly hired employees who are not officers and (IV) increases in base salary related to normal periodic performance reviews, including the annual performance reviews in March 2008 if the Closing has not occurred by that time; (D) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Compensation and Benefit Plan, except to the extent already provided in any such Company Compensation and Benefit Plan or provided in this Agreement; (E) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Compensation and Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as permitted may be required by GAAP or to comply with applicable Law, including the requirements of Section 7.1(g)409A of the Code; or (F) forgive any loans to directors, whether officers or not material)employees of the Company or any of its Subsidiaries;
(fiv) neither it nor any of its Subsidiaries shall (i) not incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business)Person, (ii) issue, or issue or sell or amend any debt securities or warrants or other rights to acquire any debt securities security of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, except for (iiiA) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries indebtedness for borrowed money incurred in the ordinary course of businessbusiness (including, subject to Section 6.13, in connection with the upcoming auction of 700 MHz spectrum ) consistent with the terms of the Company’s existing indebtedness for borrowed money not to exceed $195 million in the aggregate; (B) indebtedness for borrowed money to fund the redemption of Series F Preferred contemplated by Section 6.17 consistent with the terms of the Company’s existing indebtedness for borrowed money; (C) indebtedness for borrowed money in replacement of existing indebtedness for borrowed money or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or permitted to be incurred under this clause (iv) consistent with the terms of the Company’s existing indebtedness for borrowed money; (D) guarantees by the Company of indebtedness of its wholly-owned Subsidiaries; and (E) indebtedness for borrowed money used to make the capital expenditures permitted under clause (v) of this Section 6.1(a);
(v) it shall not make or commit to any capital expenditures, other than in the ordinary course of business, enter into business and in any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
event (gA) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to propertythe period through December 31, plant 2007, not in excess of 103% of the aggregate amount contemplated by the Company’s capital expenditure budget for the year 2007, a copy of which capital expenditure budget for the year 2007 is attached to the Company Disclosure Letter, reduced for all amounts spent or equipment committed to prior to the date of this Agreement, provided that the timing of all expenditures under such budget shall be substantially consistent with the timing contemplated in such budget, and (B) with respect to the year 2008, not in excess of $10 165 million per quarter in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures not more than $50 million in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters)fiscal quarter;
(hvi) neither it nor shall not transfer, lease, license, sell, mortgage, pledge, place a Lien upon or otherwise dispose of any of their respective property or assets (including capital stock of any of its Subsidiaries shall make any material changes in accounting methods, principles or practicesSubsidiaries), except insofar as may have been required by a change in GAAP or applicable Law orfor (A) transfers, except as so requiredleases, change any assumption underlyinglicenses, sales, or method other dispositions of calculating, any bad debt, contingency inventory and equipment in the ordinary course of business consistent with past practice (B) leases or other reserve;
(i) neither it nor any licenses of its Subsidiaries shall, except spectrum in the ordinary course of business consistent with past practice, enter (C) dispositions or sales of their respective properties or assets in the ordinary course of business consistent with past practice with a fair market value not to exceed $15 million individually or $35 million in the aggregate and (D) Liens, mortgages and pledges on properties or assets to secure any indebtedness for borrowed money permitted by clause (iv) of this Section 6.1(a);
(vii) it shall not issue, deliver, sell, or place a Lien upon shares of its capital stock or any securities convertible into, renewor any rights, modify, amend, terminate, waive, delay the exercise of, release warrants or assign any material rights or claims underoptions to acquire, any such shares, except (A) any shares of Class A Common Stock issued pursuant to Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit Options and other awards outstanding on the date of this Agreement under the Company Stock Plans; (B) shares of Class A Common Stock issued upon conversion of (x) the Company’s 1.50% Senior Convertible Debentures due 2025 or any (y) the Series F Preferred; and (C) Liens on the capital stock of its Subsidiaries to secure any indebtedness for borrowed money permitted by clause (iiv) of this Section 6.1(a);
(viii) subject to Section 6.13, it shall not acquire any business, whether by merger, consolidation, purchase of property or assets or otherwise;
(ix) it shall not make any change with respect to accounting policies or procedures, except as required by changes in GAAP or by Law;
(x) except as required by Law, it shall not (A) make any material Tax election or take any material position on any material Tax Return filed on or after the date of this Agreement or adopt any material accounting method therefor that is inconsistent with elections made, positions taken or accounting methods used in preparing or filing similar Tax Returns in prior periods or (B) settle or resolve any material Tax controversy;
(xi) it shall not (A) enter into any Contract line of business in any geographic area other than the current lines of business of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of and its Subsidiaries and products and services reasonably ancillary thereto, including any existing Contract current line of the type specified business and products and services reasonably ancillary thereto in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to geographic area for which the Company or any of its Subsidiaries is bound currently holds a FCC License authorizing the conduct of such business, product or service in such geographic area, or (B) except as currently conducted, engage in the conduct of any business in any state which would require the receipt or transfer of a Communications License or any other license issued by any Governmental Entity authorizing operation or subjectprovision of any communication services or foreign country that would require the receipt or transfer of, or application for, a Company License to the extent such license would be reasonably expected to prevent or materially delay the consummation of the transactions contemplated herein;
(jxii) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant subject to Section 7.11(c)6.13, take it shall not file for any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan Company License (excluding any employment or severance arrangementsA) for the benefit or welfare outside of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect or (B) the receipt of which would reasonably be expected to individual employment prevent, impair or severance agreements for employees below delay consummation of the level of Vice President, Merger;
(iiixiii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given subject to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein Section 6.13 and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions investments in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than marketable securities in the ordinary course of business consistent with past practice, it shall not make any loans, advances or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly owned Subsidiary of the Company); provided;
(xiv) subject to Section 6.13, howeverit shall not enter into (A) any non-competition Contract or other Contract that (I) purports to limit in any material respect either the type of business in which the Company or its Subsidiaries (or, that notwithstanding after the Effective Time, Parent or its Subsidiaries) may engage or the manner or locations in which any of them may so engage in any business or (II) could require the disposition of any material assets or line of business of the Company or its Subsidiaries or, after the Effective Time, Parent or its Subsidiaries, (B) any Contract requiring the Company or its Subsidiaries to deal exclusively with a Person or related group of Persons, (C) any other provision Contract or series of related Contracts with respect to which the Company would be required to file a Current Report on Form 8-K pursuant to Item 1.01 thereof or that is reasonably likely to provide for payments to the Company and its Subsidiaries, or by the Company and its Subsidiaries, in excess of $1 million in any twelve-month period or (D) that would or would be reasonably likely to prevent, delay or impair the Company’s ability to consummate the transactions contemplated by this Agreement, neither ;
(xv) it shall not settle any litigation or other proceedings before or threatened to be brought before a Governmental Entity for an amount to be paid by the Company nor or any of its Subsidiaries shall enter into in excess of $500,000 (exclusive of any settlement of amounts paid by or compromise under any litigation, claim, grievance, charge insurance policy maintained by the Company or proceeding that, whether at its Subsidiaries) or which would be reasonably likely to have any adverse impact on the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs operations of the Company or any of its Subsidiaries as a result of a non-monetary settlement;
(xvi) it shall not change (other than pursuant to software updates, upgrades and patches) any of the material technology used in its respective businesses;
(xvii) it shall not assign, transfer, cancel, fail to renew or places fail to extend any FCC License or material restrictions on State License, except for cancellations or modifications of FCC Licenses for microwave facilities in the ability ordinary course of business consistent with past practice, or cancellations or modifications of FCC Licenses for microwave facilities in connection with negotiated relocation agreements in accordance with Sections 27.1111, et seq. and Sections 101.69, et seq. of the FCC Rules, provided that such actions would not, individually or in the aggregate, reasonably be expected to prevent or materially delay the consummation of the transactions contemplated hereby;
(xviii) it shall not enter into any collective bargaining agreement; and
(xix) it shall not authorize or enter into any agreement to do any of the foregoing.
(b) Prior to making any written communications to the directors, officers or employees of the Company or any of its Subsidiaries pertaining to impose any labor saving compensation or other cost reduction measures;
(l) neither it nor any of its Subsidiaries shall make or rescind any material Tax election, amend any material Tax Return or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, in each case except in a manner consistent with past practice or as required benefit matters that are affected by applicable Law;
(m) other than with respect to any actions permitted under Section 7.2, neither it nor any of its Subsidiaries shall take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VIII not being satisfied; and
(n) neither it nor any of its Subsidiaries will authorize any of, or commit, resolve or agree, in writing or otherwise, to take, any of the foregoing actions; provided, however, that nothing contained in transactions contemplated by this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to ClosingAgreement, the Company shall exerciseprovide Parent with a copy of the intended communication, consistent with Parent shall have a reasonable opportunity to review and comment on the terms communication, and conditions of this Agreement, complete control Parent and supervision of its and its Subsidiaries’ operationsthe Company shall cooperate in providing any such mutually agreeable communication.
Appears in 1 contract
Interim Operations. The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless Parent shall otherwise consent approve in writing, which consent shall not unreasonably be withheld, writing and except as set forth in Section 6.01 of the Disclosure Schedule or as otherwise expressly contemplated by this Agreement or as set forth in this Agreement):
(a) the business of it and its Subsidiaries the Company shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries the Company shall use their respective its commercially reasonable efforts efforts, consistent with the limitations of this Article VI, to preserve its business organization substantially intact and maintain its existing relations and goodwill with customers, suppliers, distributors, strategic partners, creditors, lessors, employees and business associates;
(b) it the Company shall not (i) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiariesit; (ii) amend its certificate of incorporation the Company Charter or by-lawsCompany Bylaws; (iii) other than in the case of wholly-owned subsidiaries, split, combine or reclassify its outstanding shares of capital stock; (iv) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, other than dividends from its direct or indirect wholly-owned Subsidiaries; or (v) purchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock Shares from holders of Company Stock Options or warrants to purchase Company Common Shares in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options or warrants to the extent required or permitted under the terms of such purchase Company Stock OptionsCommon Shares, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(c) neither it nor any of its Subsidiaries the Company shall not (i) issue, sell, pledge, dispose of or encumber (A) any shares of its capital stock of any class, Rights class or any Voting DebtDebt or any other property or assets, or (B) issue, sell, pledge, dispose of or encumber securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class, Rights, class or any Voting Debt or any other property or assets (other than shares of Company Common Stock and associated Rights Shares issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans, pursuant to warrants to purchase Company Common Shares outstanding on the date hereof, and upon conversion of the Series B Preferred Shares or under this Agreement); or (ii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire or encumber any material property or material assets (including capital stock or business other than licenses of any Company Products entered into in the ordinary course of its Subsidiaries) or business;
(d) neither it nor any of its Subsidiaries the Company shall not restructure, recapitalize, reorganize or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the operation of its assets assets, product lines or businesses businesses, or its interests therein, or adopt resolutions providing for or authorizing any of the foregoing;
(e) neither it nor any of its Subsidiaries the Company shall not acquire (i) by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any material assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a wholebusinesses, except purchases of inventory and raw materials in the ordinary course of business (or as permitted by Section 7.1(g), whether or not material)business;
(f) neither it nor except for the Rights Agreement, the Company shall not adopt or implement any stockholder rights plan, “poison pill” anti-takeover plan or other similar plan, device or arrangement that, in each case, is applicable to Parent or any of its Subsidiaries Affiliates, nor shall it (i) exempt any person (other than Parent, MergerSub and their respective affiliates) from the provisions of Section 203 of the DGCL or any similar takeover laws, (ii) exempt any persons (other than Parent, MergerSub and their respective affiliates) from the provisions of any Takeover Statute or otherwise cause such restrictions not to apply, or (iii) amend or waive the Rights Agreement or redeem the Company Rights or take any action to render the Rights Plan or the Company Rights inapplicable to any party other than Parent or MergerSub, or agree to do any of the foregoing, in each case, unless such actions are taken concurrently with a termination by the Company of this Agreement, as in accordance with Article IX hereof;
(g) the Company shall not (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement equipment lease borrowings or existing lines of credit in the ordinary course of business), (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its SubsidiariesCompany, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine travel advances to employees of the Company and its Subsidiaries in the ordinary course of business, not exceeding $2,000 for any individual employee for any single trip and not exceeding $25,000 in the aggregate) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned SubsidiariesCompany, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(gh) neither it nor any of its Subsidiaries the Company shall not make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter 20,000 in the aggregate aggregate, other than as set forth in the Company’s budget for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be previously made available to Parent or the Company to spend specific capital expenditures disclosed in future quarters)Section 6.01(h) of the Disclosure Schedule;
(hi) neither it nor any of its Subsidiaries the Company shall not make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(ij) neither it nor any of its Subsidiaries shallthe Company shall not, except in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(jk) neither it nor any of its Subsidiaries shallthe Company shall not, except as required to comply with applicable Law (as in effect on the date hereof or hereafter) or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment (whether at will or severance agreement otherwise), severance, change in control, bonus, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan for the benefit or welfare of any current current, prospective or former former, director, officer, employee or consultant, consultant or any collective bargaining agreement (except actions for terminations of employment with non-executive employees for performance in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice Presidentbusiness), (iiiii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iviii) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (viv) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (viv) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of or remove existing restrictions in any benefit plans or agreements or awards made thereunder, or ; (viivi) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, or (vii) create any bonus plan or grant any bonuses in connection with the transaction contemplated by this Section 7.1(jAgreement.
(l) the Company shall not prevent make any written or oral communications to the employees of the Company pertaining to compensation or any benefit matters that are affected by the transactions contemplated by this Agreement, unless the Company provides Parent with a copy of its Subsidiaries from (x) prior the intended communication, Parent has a reasonable period of time to review and comment on the Closing Datecommunication, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards Parent and the timing of Company shall cooperate in providing any such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above)mutually agreeable communication;
(km) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall not initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than as set forth in Section 6.01(m) of the Disclosure Schedule or in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practiceAgreement); provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measures;
(ln) neither it nor any of its Subsidiaries the Company shall not make or rescind any material Tax election, amend in any material request any Tax Return, change an accounting period, adopt or change an accounting method, settle or otherwise finally resolve any material Tax Return controversy, or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, in each case terminated except in a manner consistent with past practice or the ordinary and usual course of business and provided that such action would not have the effect of increasing the Tax liability of the Company for any period ending as required by applicable Lawof Closing Date;
(mo) the Company shall not enter into any Customer Contract, end user, partnership, maintenance, professional services or reseller agreement or arrangement other than pursuant to a Company Standard Form Contract and it shall not enter into any Customer Contract with respect to any actions permitted under Section 7.2, neither it nor any a discount exceeding the discount set forth in Schedule 6.01(o) of its Subsidiaries the Disclosure Schedule.
(p) the Company shall take any action or omit to not take any action that is would reasonably likely be expected to result in any of the conditions to the Offer set forth in Annex I or any of the conditions to the Merger set forth in Article VIII not being satisfiedsatisfied or that would reasonably be expected to materially delay the consummation of, or materially impair the ability of the Company to consummate, the Offer, the Merger, the Top-Up Option or any other transaction contemplated by this Agreement in accordance with the terms hereof; andprovided, however that the foregoing shall not prohibit the Company from taking any action permitted by Section 7.04 of this Agreement.
(nq) neither it nor any of its Subsidiaries will the Company shall not authorize any of, or commit, resolve or agree, in writing or otherwise, to take, any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct . In connection with the operations continued operation of the Company prior to Closing. Prior to ClosingCompany, the Company shall exercisewill confer in good faith on a regular and frequent basis with one or more representatives of Parent, consistent with as requested by such representatives, designated to the terms Company regarding operational matters and conditions the general status of ongoing operations and will notify Parent promptly of any event or occurrence that has had or may reasonably be expected to have a Company Material Adverse Effect or which could reasonably be expected to result in the failure of a condition set forth in paragraph (b) or (c) of Annex I. The Company acknowledges that Parent does not waive any rights it may have under this Agreement, complete control and supervision Agreement as a result of its and its Subsidiaries’ operationssuch consultation.
Appears in 1 contract
Samples: Merger Agreement (Arkona Inc)
Interim Operations. The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless Parent shall otherwise consent approve in writing, which consent shall not unreasonably be withheld, and except as otherwise expressly contemplated by this Agreement or as the Stock Option Agreement or set forth in this AgreementSection 6.1 of the Company Disclosure Letter):
(a) the business of it its and its Subsidiaries Subsidiaries' businesses shall be conducted only in the ordinary and usual course and(it being understood and agreed that nothing contained herein shall permit the Company to enter into or engage in (through acquisition, product extension or otherwise) the business of selling any products or services materially different from existing products or services of the Company and its Subsidiaries or to enter into or engage in new lines of business without Parent's prior written approval);
(b) to the extent consistent therewithwith (a) above, it and each of its Subsidiaries shall use their its respective commercially reasonable best efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, reinsurers, distributors, strategic partners, creditors, lessors, employees and business associates;
(bc) it shall not (i) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (ii) amend its certificate of incorporation any Governing Document or by-lawsamend, modify or terminate the Rights Agreement; (iii) other than in the case of wholly-owned subsidiaries, split, combine or reclassify its outstanding shares of capital stock; (iv) authorize, declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, stock other than dividends from its direct or indirect wholly-wholly owned SubsidiariesSubsidiaries and other than regular quarterly dividends paid by the Company on its Common Shares not in excess of $0.12 per share and regular quarterly dividends paid by the Company on its Preferred Shares in accordance with the Company's Governing Documents; or (v) purchaserepurchase, redeem or otherwise acquire, except for in connection with any of the acquisition of shares of Company Common Stock from holders of Company Stock Options in full Plans or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options pursuant to the extent required or permitted under the terms of such Company American Bankers Insurance Group, Inc. 401(k) and Employee Stock OptionsOwnership Plan, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(cd) neither it nor any of its Subsidiaries shall (i) issue, sell, pledge, dispose of or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debtof, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquireacquire any shares, any shares of its capital stock of any class, Rights, any Voting Debt class or any other property or assets (other than shares exercise of Company Common Stock the Rights and associated Rights the Shares issuable pursuant to options and other stock-based awards outstanding on the date hereof under any of the Company Stock PlansPlans or upon conversion of the Preferred Shares); or (ii) other than in the ordinary and usual course of business, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire of or encumber any material other property or material assets (including capital stock of any of its Subsidiaries) or business;
incur or modify any material indebtedness or other liability; or (diii) neither it nor make or authorize or commit for any of its Subsidiaries shall restructurecapital expenditures, recapitalizeincluding entering into capital lease obligations, reorganize other than in amounts not exceeding $5,000,000 in the aggregate or, by any means, make any acquisition of, or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the operation of its investment in, assets or businesses stock of any other Person or adopt resolutions providing for entity, including by way of assumption reinsurance, in excess of $2,000,000 individually or authorizing any of $5,000,000 in the foregoingaggregate (other than in connection with ordinary course investment activities);
(e) neither it nor any of its Subsidiaries shall acquire (i) by merging terminate, establish, adopt, enter into, make any new grants or consolidating withawards under, amend or otherwise modify, any Compensation and Benefit Plans, or by purchasing all or a substantial portion of increase the assets of or any stock ofsalary, or by any other mannerwage, any business or any corporation, partnership, joint venture, limited liability company, association bonus or other business organization or division thereof, or (ii) compensation of any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, employees except purchases of inventory and raw materials increases occurring in the ordinary and usual course of business (or as permitted which shall include normal periodic performance reviews and related compensation and benefit increases); provided, however, that the Company shall be entitled to (i) pay cash bonuses to sales personnel and the cash bonuses owed to employees pursuant to the Company's Management Incentive Plan for 1998 in an aggregate amount not to exceed $6,100,000, and (ii) extend for up to 12 months the expiration date of any Company Stock Options held by Section 7.1(g), whether or not material)non-employee directors of the Company;
(f) neither it nor any of its Subsidiaries shall pay, discharge, settle or satisfy any claims, liabilities or obligations (i) incur any indebtedness for borrowed money absolute, accrued, asserted or guarantee any such indebtedness of another Person (unasserted, contingent or otherwise), other than pursuant to the Credit Agreement payment, discharge or satisfaction of claims, liabilities or obligations legally due and payable and arising in the ordinary and usual course of business), (ii) issueclaims arising under the terms of products, sell contracts or amend any debt securities or warrants or other rights to acquire any debt securities of policies issued by the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Insurance Subsidiaries in the ordinary and usual course of business) business and such other claims, liabilities or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than obligations as shall not exceed $5,000,000 in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange ratesaggregate;
(g) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters);
(h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measures;
(l) neither it nor any of its Subsidiaries shall make or rescind any material Tax election, amend settle any material audit, file any amended Tax Return Returns or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled canceled or terminated, in each case terminated except in a manner consistent with past practice or as required by applicable Lawthe ordinary and usual course of business;
(mh) neither it nor any of its Subsidiaries shall enter into any agreement containing any provision or covenant limiting in any material respect the ability of the Company or any Subsidiary or affiliate to (i) sell any products or services of or to any other Person, (ii) engage in any line of business or (iii) compete with or to obtain products or services from any Person or limiting the ability of any Person to provide products or services to the Company or any of its Subsidiaries or Affiliates;
(i) neither it nor any of its Subsidiaries shall enter into any new quota share or other reinsurance transaction (i) which does not contain standard cancellation and termination provisions, (ii) which, except in the ordinary course of business, materially increases or reduces the Company Insurance Subsidiaries' consolidated ratio of net written premiums to gross written premiums or (iii) pursuant to which $10,000,000 or more in gross written premiums are ceded by the Company Insurance Subsidiaries to any Person other than with the Company or any of its Subsidiaries;
(j) neither it nor any of the Company Insurance Subsidiaries will alter or amend in any material respect to any actions permitted under Section 7.2, their existing investment guidelines or policies;
(k) neither it nor any of its Subsidiaries shall take any action or omit to take any action that is reasonably likely would cause any of its representations and warranties herein to result become untrue in any material respect;
(l) neither it nor its Subsidiaries shall permit a material change in any of the conditions to the Merger set forth its underwriting, investment, actuarial, financial reporting or accounting practices or policies or in Article VIII not being satisfiedany material assumption underlying an actuarial practice or policy, except as may be required by any change in GAAP, statutory accounting principles or applicable Law; and
(nm) neither it nor any of its Subsidiaries will authorize any of, or commit, resolve or agree, in writing or otherwise, enter into an agreement to take, do any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operationsforegoing.
Appears in 1 contract
Samples: Merger Agreement (American Bankers Insurance Group Inc)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless Parent shall otherwise consent in writing, writing (which consent shall not be unreasonably be withheld, withheld or delayed) and except as otherwise expressly contemplated by this Agreement or as set forth in this Agreement):
(ai) the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, strategic partners, creditors, lessors, employees and business associates;
(bii) it shall not (iA) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (iiB) amend its certificate of incorporation Organizational Documents or by-lawsamend, modify or terminate the Rights Agreement; (iiiC) other than in the case of wholly-any direct or indirect wholly owned subsidiariesSubsidiary, split, combine or reclassify its outstanding shares of capital stock; (ivD) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, stock other than dividends from its direct or indirect wholly-wholly owned SubsidiariesSubsidiaries and other than regular quarterly cash dividends not in excess of $0.165 per Share; or (vE) purchaserepurchase, redeem or otherwise acquire, except for in connection with the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock OptionsPlans, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(ciii) neither it nor any of its Subsidiaries shall (iA) issue, sell, pledge, dispose of or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debtof, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class, Rights, class or any Voting Debt or any other property or assets (other than shares of Company Common Stock and associated Rights Shares issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans)) except as set forth in Section 6.1(a)(iii) of the Company Disclosure Schedule; (B) other than as set forth on Section 6.1(a)(iii)(B) of the Company Disclosure Schedule, products sold to customers in the ordinary and usual course of business (without limitation as to dollar amount) or (ii) otherwise in the ordinary and usual course of business and not in an aggregate amount of more than $5,000,000, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire of or encumber any material other property or material assets (including capital stock of any of its Subsidiaries); (C) incur or businessmodify any indebtedness other than tax-exempt indebtedness, indebtedness existing solely between the Company and its wholly owned Subsidiaries or between such wholly owned Subsidiaries or indebtedness in an aggregate amount less than $2,000,000; provided that prior to incurring any indebtedness, if practicable, the Company shall provide Parent with a reasonable right of consultation prior to incurring any such indebtedness; provided, further, that the foregoing right of consultation shall not apply in the case of indebtedness in respect of letters of credit, guarantees or performance bonds or indebtedness existing solely between the Company and its wholly owned Subsidiaries or between such wholly owned Subsidiaries; (D) make or authorize or commit for any capital expenditures other than as set forth on Schedule 6.1(a)(iii) of the Company Disclosure Schedule or which, individually, is in excess of $1,000,000 or, in the aggregate, are in excess of $5,000,000; provided that prior to making any expenditure not set forth on Schedule 6.1(a)(iii) of the Company Disclosure Schedule, if practicable, the Company shall provide Parent with a reasonable right of consultation prior to making any such expenditure; and (E) by any means, make any acquisition of, or investment in (i) stock of or other interest in, any other Person or (ii) except in the ordinary and usual course of business consistent with past practice, assets of any other Person;
(div) except as set forth in Section 6.1(a)(iv) of the Company Disclosure Schedule, or as required by the terms of this Agreement, neither it nor any of its Subsidiaries shall (A) terminate, establish, adopt, enter into, make any new grants or awards under, amend or otherwise modify, any Compensation and Benefit Plans except as required by law, (B) other than in the ordinary and usual course of business consistent with past practice and the Company’s compensation budget with respect to employees at a compensation level of less than $80,000 a year, increase the compensation of any employee, (C) hire any employee at a compensation level expected to be more than $100,000 a year;
(v) neither it nor any of its Subsidiaries shall restructuresettle or compromise any material claims or litigation or, recapitalizeexcept in the ordinary and usual course of business modify, reorganize amend or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into terminate any agreement or arrangement imposing material changes or restrictions on the operation of its assets material Contracts or businesses waive, release or adopt resolutions providing for assign any material rights or authorizing any of the foregoingclaims;
(e) neither it nor any of its Subsidiaries shall acquire (i) by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, except purchases of inventory and raw materials in the ordinary course of business (or as permitted by Section 7.1(g), whether or not material);
(f) neither it nor any of its Subsidiaries shall (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business), (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(g) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters);
(hvi) neither it nor any of its Subsidiaries shall make any material changes Tax election or file any material income Tax Refund or implement or adopt any change in its accounting methods, principles or material accounting practices, except insofar in all cases other than as may have been be required by a change in GAAP applicable Laws or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserveby GAAP;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measures;
(l) neither it nor any of its Subsidiaries shall make or rescind any material Tax election, amend any material Tax Return or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, in each case except in a manner consistent with past practice or as required by applicable Law;
(m) other than with respect to any actions permitted under Section 7.2, neither it nor any of its Subsidiaries shall take any action or omit to take any action that is it reasonably likely expects would cause any of its representations and warranties herein to result become untrue in any of the conditions to the Merger set forth in Article VIII not being satisfiedmaterial respect; and
(nviii) neither it nor any of its Subsidiaries will authorize or enter into an agreement to do any of the foregoing.
(b) Parent covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless the Company shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed) and except as otherwise expressly set forth in this Agreement):
(i) the business of it and its Subsidiaries shall be conducted in the ordinary course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, creditors, lessors, employees and business associates;
(ii) it shall not (A) split, combine or reclassify its outstanding shares of capital stock; or (B) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock other than dividends from its direct or indirect wholly owned Subsidiaries;
(iii) it shall not (A) enter into any transaction, other than as contemplated pursuant to this Agreement, to the extent any such transaction would require approval of the stockholders of Parent under applicable law or stock exchange rules; or (B) enter into an agreement relating to any acquisition, merger, consolidation or purchase that would reasonably be expected to (I) impose any material delay in the obtaining of, or commitsignificantly increase the risk of not obtaining, resolve any authorizations, consents, orders, declarations or agreeapprovals of any Governmental Entity necessary to consummate the Merger or the expiration or termination of any applicable waiting period, in writing (II) significantly increase the risk of any Governmental Entity entering an order prohibiting the consummation of the Merger, or (III) significantly increase the risk of not being able to remove any such order on appeal or otherwise, ;
(iv) amend Parent’s or Merger Sub’s Organizational Documents;
(v) neither it nor any of its Subsidiaries shall take any action or omit to take, take any action that it reasonably expects would cause any of its representations and warranties herein to become untrue in any material respect; and
(vi) neither it nor any of its Subsidiaries will authorize or enter into an agreement to do any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operationsforegoing.
Appears in 1 contract
Interim Operations. The Company Except as set forth in Section 3.1 of the Western Disclosure Letter, Western covenants and agrees as to itself and its the Transferred Subsidiaries that, after the date hereof and prior to the Effective Time Closing (unless Parent Protection One shall otherwise consent approve in writing, which consent shall not unreasonably be withheld, and except as otherwise expressly contemplated by this Agreement, the Stock Option Agreement or as set forth in this and the Option and Voting Agreement):
(a) the business businesses of it and its the Transferred Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Western shall cause the Transferred Subsidiaries shall to use their respective commercially all reasonable efforts to preserve its their respective business organization organizations intact and maintain its their respective existing relations and goodwill with customers, suppliers, distributors, strategic partners, creditors, lessors, employees and business associates;
(b) it shall not (i) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (ii) amend its certificate of incorporation or by-laws; (iii) other than in the case of wholly-owned subsidiaries, split, combine or reclassify its outstanding shares of capital stock; (iv) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, other than dividends from its direct or indirect wholly-owned Subsidiaries; or (v) purchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(c) neither it Western nor any of its Subsidiaries shall (i) issue, sell, pledge, dispose of, encumber or accelerate, modify, or amend the terms of or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debtof, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its any capital stock in any Transferred Subsidiary; (ii) amend the certificate of incorporation or by-laws of any Transferred Subsidiary; (iii) split, combine or reclassify the outstanding shares of capital stock of any classTransferred Subsidiary; (iv) declare, Rightsset aside or pay any dividend payable in cash, stock or property in respect of any capital stock of WestSec or Westar Security; (v) repurchase, redeem or otherwise acquire, or permit any of its Subsidiaries to purchase or otherwise acquire, any Voting Debt shares of capital stock of any Transferred Subsidiary or any other property securities convertible into or assets exchangeable or exercisable for any shares of capital stock of any Transferred Subsidiary; (vi) other than shares in the ordinary and usual course of Company Common Stock and associated Rights issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans); or (ii) business, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire of or encumber any material other property or material assets, real, personal or mixed (including, without limitation, leasehold interests and intangible assets (including and capital stock of any Transferred Subsidiary) of any Transferred Subsidiary or permit any Transferred Subsidiary to incur or modify any material indebtedness or other liability; or (vii) permit any Transferred Subsidiary to make or authorize or commit for any capital expenditures or, by any means, permit any Transferred Subsidiary to make any acquisition of, or investment in, assets or stock of any other Person or entity, except for (A) acquisitions of security monitoring accounts in the ordinary course of business consistent with past practice, (B) other acquisitions of security monitoring accounts not to exceed $5,000,000 in the aggregate and (C) other capital expenditures not to exceed $500,000 in the aggregate;
(c) neither Western nor any of its Subsidiaries) Subsidiaries shall terminate, establish, adopt, enter into, make any new grants or businessawards under, amend or otherwise modify, any Compensation and Benefit Plans or increase the salary, wage, bonus or other compensation of any employees of any Transferred Subsidiary except grants, awards or increases occurring in the ordinary and usual course of business (which shall include normal periodic performance reviews and related compensation and benefit grants, awards or increases);
(d) neither it Western nor any of its Subsidiaries shall restructuresettle or compromise any material claims or litigation involving any Transferred Subsidiary or, recapitalizeexcept in the ordinary and usual course of business modify, reorganize amend or completely terminate any material Contracts to which a Transferred Subsidiary is party or partially liquidate waive, release or adopt a plan assign any material rights or claims of complete or partial liquidation or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the operation of its assets or businesses or adopt resolutions providing for or authorizing any of the foregoingTransferred Subsidiary;
(e) neither it Western nor any of its Subsidiaries shall acquire (i) by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or make any stock of, or Tax election with respect to Taxes payable by any other manner, Transferred Subsidiary or permit any business or insurance policy naming any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken Transferred Subsidiary as a whole, beneficiary or loss-payable payee to be cancelled or terminated except purchases of inventory and raw materials in the ordinary and usual course of business (or as permitted by Section 7.1(g), whether or not material)business;
(f) neither it Western nor any of its Subsidiaries shall (i) incur take any indebtedness for borrowed money action or guarantee omit to take any such indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business), (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or action that would cause any of its Subsidiaries, guarantee representations and warranties herein to become untrue in any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;material respect; and
(g) neither it nor any of its Subsidiaries shall make will authorize or enter into an agreement to do any capital expenditures or other expenditures with respect of the foregoing. Except as set forth in Section 3.1 of the Protection One Disclosure Letter, Protection One covenants and agrees as to property, plant or equipment in excess of $10 million per quarter in the aggregate for the Company itself and its SubsidiariesSubsidiaries that, taken after the date hereof and prior to the Closing (unless Western shall otherwise approve in writing, and except as a whole (it being understood that if capital expenditures in any quarter are less than $10 millionotherwise expressly contemplated by this Agreement, the shortfall shall be available to Stock Option Agreement and the Company to spend in future quarters);Option and Voting Agreement):
(h) the business of Protection One and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, Protection One and its Subsidiaries shall use all reasonable efforts to preserve their respective business organizations intact and maintain their respective existing relations and goodwill with customers, suppliers, distributors, creditors, lessors, employees and business associates;
(i) neither it Protection One nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor issue, sell, pledge, dispose of, encumber or accelerate, modify, or amend the terms of any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of any capital stock of Protection One or any of its Subsidiaries; (ii) amend the certificate of incorporation or by-laws of Protection One or any of its Subsidiaries; (iii) split, combine or reclassify the outstanding shares of capital stock of Protection One or any of its Subsidiaries; (iv) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock other than dividends from Protection One's direct or indirect wholly-owned Subsidiaries shalland the dividend and other distributions referred to in the recitals to this Agreement; or (v) repurchase, redeem or otherwise acquire any shares of capital stock or any securities convertible into or exchangeable or exercisable for any shares of capital stock of Protection One or any of its Subsidiaries; (vi) other than in the ordinary and usual course of business, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber any other property or assets, real, personal or mixed (including, without limitation, leasehold interests and intangible assets and (including capital stock of any of Protection One's Subsidiaries) or incur or modify any material indebtedness or other liability; or (vii) make or authorize or commit for any capital expenditures or, by any means, make any acquisition of, or investment in, assets or stock of any other Person or entity, except for (A) acquisitions of security monitoring accounts in the ordinary course of business consistent with past practice, (B) other acquisitions of security monitoring accounts not to exceed $5,000,000 in the aggregate and (C) other capital expenditures not to exceed $500,000 in the aggregate;
(j) neither Protection One nor any of its Subsidiaries shall terminate, establish, adopt, enter into, renewmake any new grants or awards under, amend or otherwise modify, amendany Protection One Compensation and Benefit Plans or increase the salary, terminatewage, bonus or other compensation of any employees except grants, awards or increases occurring in the ordinary and usual course of business (which shall include normal periodic performance reviews and related compensation and benefit grants, awards or increases) except for the bonuses referred to in the recitals to this Agreement;
(k) neither Protection One nor any of its Subsidiaries shall settle or compromise any material claims or litigation or, except in the ordinary and usual course of business modify, amend or terminate any of its material Contracts or waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measuresclaims;
(l) neither it Protection One nor any of its Subsidiaries shall make or rescind any material Tax election, amend any material Tax Return election or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, in each case terminated except in a manner consistent with past practice or as required by applicable Lawthe ordinary and usual course of business;
(m) other than with respect to any actions permitted under Section 7.2, neither it Protection One nor any of its Subsidiaries shall take any action or omit to take any action that is reasonably likely would cause any of its representations and warranties herein to result become untrue in any of the conditions to the Merger set forth in Article VIII not being satisfiedmaterial respect; and
(n) neither it Protection One nor any of its Subsidiaries will authorize any of, or commit, resolve or agree, in writing or otherwise, enter into an agreement to take, do any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operationsforegoing.
Appears in 1 contract
Interim Operations. The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior until the earlier to occur of the termination of this Agreement pursuant to Article VIII and the Effective Time (unless Parent shall otherwise consent approve in writing, which consent approval in the case of clauses (c)(ii), (c)(iv), (c)(vi), (e), (f) and (k) below shall not be unreasonably be withheld, delayed or conditioned and except as otherwise expressly contemplated permitted or required by this Agreement or as set forth described in this AgreementSection 6.1 of the Company Disclosure Letter):
(a) the business of it and its Subsidiaries shall be conducted in the ordinary course and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, strategic partners, creditors, lessors, employees and business associatespast practice;
(b) it shall not (i) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (ii) amend its certificate of incorporation or by-lawspropose to amend the Company Charter or the Company Bylaws; (iii) other than in the case of wholly-owned subsidiaries, split, combine or reclassify its outstanding shares of capital stockstock or any class thereof; (iv) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, stock other than (A) dividends from its direct or indirect wholly-owned SubsidiariesSubsidiaries to the Company, or (B) dividends payable on the Series C Preferred Shares pursuant to and in accordance with the existing terms thereof; or (v) purchaserepurchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(c) neither it nor any of its Subsidiaries shall (i) issue, sell, pledge, dispose of or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debtof, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class, Rights, any Voting Debt or any other property or assets class (other than shares of Company Common Stock and associated Rights Shares issuable pursuant to options and other stock-based awards Company Options outstanding on the date hereof under the Stock Plans as set forth in Section 5.1(b) of the Company Stock PlansDisclosure Letter); or (ii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire or encumber or suffer to exist any material property Encumbrance (except for Permitted Encumbrances) in respect of, any assets in excess of $250,000 in the aggregate other than (A) sales of inventories (and/or licenses in connection therewith) in the ordinary course of business consistent with past practice and (B) dispositions of obsolete or material assets worthless assets; (iii) incur any indebtedness for borrowed money other than borrowings (including capital stock issuance of letters of credit) and reborrowings under its or any of its Subsidiaries’ credit facilities, as such credit facilities are in existence as of the date hereof without regard to any subsequent amendment or modification, that would at any given time cause the net funded amount of indebtedness outstanding under such credit facilities to be in excess of $4,000,000 in the aggregate (the “Maximum Amount”); provided, however, that the Company may incur indebtedness under such credit facilities in excess of the Maximum Amount to the extent that the senior management of the Company reasonably determines that it is in the best interests of the Company to borrow such additional amounts in order to fund operations of the business of the Company and its Subsidiaries in the ordinary course; and provided, further that prior to taking any actions permitted by the foregoing proviso the Company shall give Parent three Business Days’ prior written notice that it intends to take such actions; (iv) make or businesscommit for any capital expenditures in the aggregate in excess of the Company’s budget for capital expenditures, in each case, for the applicable fiscal year; (v) loan, advance funds or make any investment in or capital contribution to any other Person other than to any Subsidiary; or (vi) acquire (by merger, consolidation, or acquisition of stock or assets) any Person;
(d) except as required by Law, neither it nor any of its Subsidiaries shall restructureterminate, recapitalizeestablish, reorganize or completely or partially liquidate or adopt a plan of complete or partial liquidation adopt, enter into, amend or otherwise enter into modify any agreement Company Compensation and Benefit Plans in a manner that would materially increase benefits thereunder or arrangement imposing material changes increase the salary, wage, bonus or restrictions on other compensation of any employees except salary increases as a result of employee promotions occurring in the operation ordinary course of its assets or businesses or adopt resolutions providing for or authorizing any of the foregoingbusiness consistent with past practices;
(e) neither it nor any of its Subsidiaries shall acquire (i) by merging settle or consolidating with, compromise any material claims or by purchasing all or a substantial portion litigation in excess of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or $250,000 in the aggregate, to the Company aggregate other than (A) settlements and any of its Subsidiaries, taken as a whole, except purchases of inventory and raw materials compromises in the ordinary course of business and (B) settlements and compromises of liabilities not in excess of $500,000 reflected or reserved against on the financial statements included in the Company Reports; or (ii) waive, release or assign any material rights or claims in excess of $250,000 in the aggregate other than in the ordinary course of business; provided, however, that the Company shall not settle any Governmental claims or proceedings if such settlement would result in suspension, debarment or injunctive relief that is material to the businesses of the Company and its Subsidiaries taken as permitted by Section 7.1(g), whether a whole or not material)that would otherwise materially affect Parent and its Affiliates;
(f) neither it nor any of its Subsidiaries shall (i) incur make any indebtedness for borrowed money material Tax election, change any annual Tax accounting period, adopt or guarantee change any such indebtedness material method of another Person (other than pursuant Tax accounting, extend or waive any applicable statute of limitations with respect to the Credit Agreement in the ordinary course of business), (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another PersonTaxes, enter into any “keep well” closing agreement in respect of any material Tax claim, audit or assessment, surrender any right to claim a material Tax refund, offset or other agreement to maintain reduction in a material Tax liability or settle or compromise any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange ratesmaterial Tax liability;
(g) neither it nor any use commercially reasonable efforts to (i) preserve intact its business organization and goodwill, (ii) keep available the services of its Subsidiaries shall make any capital expenditures or other expenditures present officers and key employees and (iii) preserve the goodwill and business relationships with respect to propertycustomers, plant or equipment in excess of $10 million per quarter in the aggregate for the Company suppliers and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters)others having business relationships with Company;
(h) neither it nor any of use commercially reasonable efforts to maintain with financially responsible insurance companies insurance on its Subsidiaries shall make any material changes tangible assets and its business in accounting methods, principles or practices, except insofar such amounts and against such risks and losses as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserveare consistent with past practice;
(i) neither it nor not enter into any plan of its Subsidiaries shallcomplete or partial liquidation, except in the ordinary course dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of other than the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted transactions contemplated by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject);
(j) neither it nor not alter, through merger, liquidation, reorganization, restructuring or any other fashion, the corporate structure or ownership of any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above)Company’s Subsidiaries;
(k) except for matters identified as required by GAAP or as recommended in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail writing by the Company’s plans with independent auditors, (i) not revalue in any material respect thereto, neither the Company nor any of its Subsidiaries shall initiateassets, settle including writing down the value of inventory or compromise any litigation, claim, grievance, charge writing-off notes or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and accounts receivables other than in the ordinary course of business consistent with past practice); provided, howeveror (ii) change any method of accounting or accounting principles or practice;
(l) not (i) grant any material severance, that notwithstanding retention or termination pay to, or amend in any other provision material respect any existing severance, retention or termination arrangement with, any current or former director, officer or employee of this Agreement, neither the Company nor or any of its Subsidiaries shall Subsidiaries, (ii) except to the extent required under Contracts existing as of the date hereof, increase in any material respect or accelerate in any material respect the payment or vesting of, any benefits payable under any existing severance, retention or termination pay policies or employment agreements, (iii) enter into or amend in any settlement material respect any employment, consulting, deferred compensation or other similar agreement with any director, officer, consultant or employee of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places (iv) establish, adopt or amend (except as required by applicable law) any material restrictions on the ability collective bargaining agreement, bonus, profit-sharing, thrift, pension, retirement, post-retirement medical or life insurance, retention, deferred compensation, compensation, stock option, restricted stock or other benefit plan or arrangement covering any present or former director, officer or employee, or any beneficiaries thereof, of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measures;
(l) neither it nor any of its Subsidiaries shall make or rescind any material Tax election, amend any material Tax Return or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, in each case except in a manner consistent with past practice or as required by applicable Law;Subsidiaries; or
(m) other than with respect to any actions permitted under Section 7.2, neither it nor any of its Subsidiaries shall take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VIII not being satisfied; and
(n) neither it nor any of its Subsidiaries will authorize or enter into an agreement to do any ofof the foregoing, or commit, resolve or agree, in writing or otherwise, commit to take, any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operations.
Appears in 1 contract
Interim Operations. The (a) Subject to Section 6.1.A., the Company covenants and agrees as to itself and its Subsidiaries that, that after the date hereof Second Amendment Date and prior to the Effective Time (unless Parent shall otherwise consent approve in writing, which consent approval shall not be unreasonably be withheldwithheld or delayed, and except as otherwise expressly contemplated by this Agreement or as set forth in this Agreement):
(ai) the business of it the Company and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially best reasonable efforts to (A) preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, strategic partners, creditors, lessors, employees and business associatesassociates and (B) maintain and keep material properties and assets in as good repair and condition as such are in as of the date hereof, subject to ordinary wear and tear;
(bii) it the Company shall not (iA) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (iiB) amend its certificate articles of incorporation or by-lawslaws or amend, modify or terminate the Rights Agreement; (iiiC) other than in the case of wholly-owned subsidiaries, split, combine combine, subdivide or reclassify its outstanding shares of capital stock; (ivD) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, stock (other than dividends from its direct or indirect wholly-wholly owned Subsidiaries and other than regular quarterly cash dividends not in excess of $0.255 per Share and regular quarterly cash dividends on the preferred and preference stock of its Subsidiaries); or (vE) purchaserepurchase, redeem or otherwise acquire, acquire (except for (I) mandatory sinking funds obligations existing on the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options date hereof and (II) open market repurchases pursuant to the extent required or permitted under the terms of such Company the Company's Direct Stock OptionsPurchase Plan and Dividend Reinvestment Plan), or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(ciii) neither it the Company nor any of its Subsidiaries shall (iA) issue, sell, pledge, dispose of or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debtof, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class, Rights, any Voting Debt class or any other property or assets (other than shares of Company Common Stock and associated Rights (I) Shares issuable pursuant to options and other stock-based awards rights outstanding on the date hereof under the Company Stock Plans, issuances of additional options or rights to acquire Shares granted pursuant to the terms of the Stock Plans as in effect on the date hereof in the ordinary and usual course of the operation of such Stock Plans and issuances of Shares pursuant to options granted after the date hereof pursuant to the Stock Plans and (II) Shares issuable pursuant to the terms of the outstanding Feline Prides); or (iiB) (I) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire of or encumber any material of its coal fines property or material assets assets, or, (including capital stock of any of its SubsidiariesII) or business;
(dexcept as identified on Section 6.1(a)(iii) neither it nor any of its Subsidiaries shall restructure, recapitalize, reorganize or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the operation of its assets or businesses or adopt resolutions providing for or authorizing any of the foregoing;
(e) neither it nor any of its Subsidiaries shall acquire (i) by merging or consolidating withCompany Disclosure Letter, or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, except purchases of inventory and raw materials than in the ordinary and usual course of business (or as permitted by Section 7.1(g), whether or not material);
(f) neither it nor any of its Subsidiaries shall (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (and other than sales not in excess of $10,000,000 in the aggregate or $1,000,000 in respect of any transaction or series of related transactions, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber any other property or assets; (C) make or authorize or commit for any capital expenditures or operation and maintenance expenditures in excess of 100% of those contemplated to be spent pursuant to the Credit Agreement year 1999, 2000 or 2001 capital appropriations/spending budgets set forth in the ordinary course of business), (iiSection 6.1(a) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company Disclosure Letter; or (D) by any of its Subsidiariesmeans, guarantee any debt securities of another Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect of any of the foregoing, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions toacquisition of, or investment in, assets or stock of, or other interest in, any other Person, other than the Company Person or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(g) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment entity in excess of $10 million per quarter 10,000,000 in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures or $3,000,000 in respect of any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters)transaction or series of related transactions;
(h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on in Section 7.1(j6.1(a)(iv) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect theretoLetter, neither the Company nor any of its Subsidiaries shall initiate, settle (A) accelerate or compromise any litigation, claim, grievance, charge delay collection of notes or proceeding involving any Intellectual Property accounts receivable in advance of or any other material litigation, claim, grievance, charge beyond their regular due dates or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business dates consistent with past practice); providedpractice or (B) change any significant accounting principle, howeverpractice or method, except to the extent required by U.S. GAAP as advised by the Company's regular independent accountants and after consultation with Parent;
(v) neither the Company nor any of its Subsidiaries shall take or fail to take any action that notwithstanding is reasonably likely to make any representation or warranty of the Company contained herein inaccurate in any material respect at, or as of any time prior to, the Effective Time, or that is, individually or in the aggregate, reasonably likely to have a Material Adverse Effect;
(vi) except as required by applicable Law, an existing collective bargaining agreement or other provision Contract identified in Section 6.1(a)(vi) of this Agreementthe Company Disclosure Letter, neither the Company nor any of its Subsidiaries shall terminate, establish, adopt, enter into into, make any settlement new grants or awards under, amend or otherwise modify, any Compensation and Benefit Plans (other than issuances of additional options, performance shares or compromise any litigation, claim, grievance, charge or proceeding that, whether at rights to acquire Shares granted pursuant to the time terms of the settlement or compromise or at any time Stock Plans as in effect on the date hereof in the future, materially increases the labor or operating costs ordinary and usual course of the Company operation of such Stock Plans, provided, that any such additional options, performance shares or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries rights to impose any labor saving or other cost reduction measures;
(l) neither it nor any of its Subsidiaries acquire Shares shall make or rescind any material Tax election, amend any material Tax Return or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, not vest in each case except in a manner consistent connection with past practice or as required by applicable Law;
(m) other than with respect to any actions permitted under Section 7.2, neither it nor any of its Subsidiaries shall take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VIII not being satisfied; and
(n) neither it nor any of its Subsidiaries will authorize any of, or commit, resolve or agree, in writing or otherwise, to take, any of and the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of other transactions contemplated by this Agreement, complete control and supervision of its and its Subsidiaries’ operations.),
Appears in 1 contract
Interim Operations. The Company covenants and agrees Except as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless Parent shall otherwise consent in writing, which consent shall not unreasonably be withheld, and except as otherwise expressly contemplated by this Agreement or the Company Disclosure Schedule or as set forth consented to in writing by Parent, which consent, solely, with respect to clauses (e)(iv), (l), (m), (u) or, with respect to the foregoing, clause (z) below, shall not be unreasonably withheld) the Company covenants and agrees that during the period from the date of this AgreementAgreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(a) the business and operations of it the Company and its Subsidiaries subsidiaries shall be conducted only in the ordinary and usual course and, to of business and the extent consistent therewith, it Company and its Subsidiaries subsidiaries shall use their respective commercially reasonable efforts to preserve its intact their current business organization organizations and preserve substantially intact and maintain its existing relations and the goodwill of those having business relationships with customers, suppliers, distributors, strategic partners, creditors, lessors, employees and business associatesit;
(b) it the Company shall not (i) authorize for issuance, issue, selldeliver, pledgesell or agree or commit to issue, dispose sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock owned by it in or the capital stock of any of its Subsidiaries; subsidiaries, any other securities or any securities convertible into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including without limitation stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding prior to the date hereof or (ii) amend its certificate of incorporation or by-laws; (iii) other than in the case of wholly-owned subsidiaries, split, combine or reclassify its outstanding shares of capital stock; (iv) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, other than dividends from its direct or indirect wholly-owned Subsidiaries; or (v) purchaserepurchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, or permit any of its Subsidiaries subsidiaries to purchase repurchase, redeem or otherwise acquire, any shares of its capital stock or any securities convertible into other equity interests of the Company or exchangeable or exercisable for any shares of its capital stock;
(c) neither it nor any of its Subsidiaries shall subsidiaries (i) issueincluding, sellwithout limitation, pledge, dispose of or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debt, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its subsidiaries);
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its subsidiaries, (ii) amend or otherwise change its articles of incorporation or bylaws or permit any of its subsidiaries to amend its articles of incorporation, bylaws or equivalent organizational documents or (iii) split, combine or reclassify any shares of its capital stock of any classstock, Rights, any Voting Debt or any other property or assets (other than shares of Company Common Stock and associated Rights issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans); or (ii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire or encumber any material property or material assets (including capital stock of shall not permit any of its Subsidiaries) subsidiaries to split, combine or businessreclassify any shares of its capital stock;
(d) neither it nor the Company shall not, and shall not permit any of its Subsidiaries shall restructuresubsidiaries to, recapitalizedeclare, reorganize set aside or completely pay any dividends on (whether in cash, stock or partially liquidate property), or adopt a plan of complete or partial liquidation or otherwise enter into make any agreement or arrangement imposing material changes or restrictions on the operation other distributions in respect of, any of its assets capital stock (except for dividends paid by direct or businesses or adopt resolutions providing for or authorizing any of indirect wholly owned subsidiaries to the foregoingCompany with respect to capital stock);
(e) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, neither it the Company nor any of its Subsidiaries subsidiaries shall acquire (i) grant or agree to any increase in any manner the compensation or fringe benefits of, or pay any bonus to, any current or former director, officer or employee except for increases and bonuses expressly contemplated by or required under existing employment agreements, bonus plans and other agreements and arrangements listed in Section 5.01(e) of the Company Disclosure Schedule and periodic increases consistent with past practice for employees other than officers and directors of the Company, (ii) subject to the covenants set forth in clause (i) of this Section 5.01(e), enter into any new or materially amend any existing employment, severance or termination agreement with any current or former director, officer or employee of the Company, (iii) except as may be required to comply with applicable law and except as provided in this Agreement, become obligated under any Benefit Plan that was not in existence on the date hereof or materially amend, modify or terminate any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereof, (iv) hire any employee (A) except the replacement of any current employee of the Company or any of its subsidiaries whose employment with the Company or any of its subsidiaries is terminated for any reason (with such replacement employee receiving substantially similar compensation and benefits as such terminated employee) or (B) new employees having anticipated annual compensation (including bonuses) not exceeding $100,000 individually or $500,000 in the aggregate, or (v) except as may be required to comply with applicable law and except as provided in this Agreement, pay any benefit not required by any plan or arrangement as in effect as of the date hereof (including, without limitation, the granting of, acceleration of, exercisability of or vesting of stock options, stock appreciation rights or restricted stock, except as otherwise contemplated by this Agreement);
(f) the Company shall not, and shall not permit any of its subsidiaries to, acquire or agree to acquire, including, without limitation, by merging or consolidating with, or by purchasing all or a substantial portion of substantially all the assets of or any capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, except other than purchases of inventory and raw materials or supplies in the ordinary course of business (or as permitted by Section 7.1(g), whether or not material)consistent with past practice;
(fg) neither it nor the Company shall not, and shall not permit any of its Subsidiaries shall subsidiaries to, sell, lease, license, mortgage or otherwise encumber or subject to any Lien or otherwise dispose of, or agree to sell, lease, license, mortgage or otherwise encumber or subject to any Lien or otherwise dispose of, any of its properties or assets other than (i) incur pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets) and (iii) inventory in the ordinary course of business consistent with past practice;
(h) the Company shall not, and shall not permit any of its subsidiaries to, incur, assume or pre-pay any indebtedness for borrowed money or guarantee enter into any agreement to incur, assume or pre-pay any indebtedness for borrowed money, or guarantee, or agree to guarantee, any such indebtedness or obligation of another Person (other than pursuant person, or issue or sell, or agree to the Credit Agreement in the ordinary course of business)issue or sell, (ii) issue, sell or amend any debt securities or options, warrants or other calls or rights to acquire any debt securities of the Company or any of its Subsidiariessubsidiaries, guarantee any debt securities of another Personothers, enter into any “keep well” or other agreement to maintain any financial statement condition of another Person person or enter into any arrangement having the economic effect of any of the foregoing, other than the incurrence of indebtedness under the Company’s existing revolving credit facility up to the limits of such facility as of the date hereof.
(iiii) the Company shall not, and shall not permit any of its subsidiaries to, make or forgive any loans, advances or capital contributions to, guarantees for the benefit of, or investments in, any person or entity (other than routine loans between or among the Company and any of its wholly-owned subsidiaries and except for cash advances to employees of the Company for reimbursable travel and its Subsidiaries other reasonable business expenses in the ordinary course of business);
(j) or capital contributions the Company shall not, and shall not permit any of its subsidiaries to, assume, guarantee or investment inotherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except for the obligations of the subsidiaries of the Company permitted under this Agreement;
(k) neither the Company nor any of its subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other than reorganization of the Company or any of its direct or indirect wholly owned Subsidiaries, or subsidiaries (iv) other than any transaction specifically contemplated by this Agreement or set forth in Section 5.01(k) of the Company Disclosure Schedule);
(l) the Company shall not, and shall not permit any of its subsidiaries to, (i) enter into, amend, modify or supplement any Material Contract or License Agreement outside of the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect business consistent with past practice (except as may be necessary for the Company to comply with its obligations hereunder or as set forth in Section 5.01(l) of the Company Disclosure Schedule) or (ii) waive, release, grant, assign or transfer any of its Subsidiaries against fluctuations in commodities prices material rights or exchange ratesclaims (whether such rights or claims arise under a Material Contract, License Agreement or otherwise);
(gm) neither it nor the Company shall not, and shall not permit any of its Subsidiaries shall subsidiaries to, authorize or make any capital expenditures or (other expenditures with respect than pursuant to property, plant or equipment commitments prior to the date hereof disclosed in Section 5.01(m) of the Company Disclosure Schedule) in excess of $10 million per quarter 750,000 in the aggregate for the Company and its Subsidiaries, subsidiaries taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters)whole;
(hn) neither the Company and its subsidiaries shall comply in all material respects with their obligations under the Material Contracts and License Agreements as such obligations become due;
(o) the Company and its subsidiaries (i) shall continue in force with its existing or other reputable insurance companies, adequate insurance covering risks of such types and in such amounts as are consistent with the Company’s past practices and (ii) shall not permit any insurance policy naming it nor as beneficiary or loss payable payee to be canceled or terminated;
(p) the Company shall not, and shall not permit any of its Subsidiaries shall make subsidiaries to, enter into, amend, modify or supplement any material changes in accounting methodsagreement, principles transaction, commitment or practicesarrangement with any current or former officer, except insofar director, employee or other affiliate of the Company or any of its subsidiaries (or any affiliate of any of the foregoing) other than agreements, transactions, commitments and arrangements (i) permitted by Section 5.01(e) hereof or (ii) as may have been required otherwise expressly contemplated by a change in GAAP this Agreement;
(q) the Company shall not, and shall not permit any of its subsidiaries to, establish or applicable Law oracquire (i) any subsidiary other than wholly-owned subsidiaries or (ii) subsidiaries organized outside of the United States and its territorial possessions;
(r) the Company shall not, and shall not permit any of its subsidiaries to, amend, modify or waive any term of any outstanding security of the Company or any of its subsidiaries, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserverequired by this Agreement;
(s) the Company shall, and shall cause its subsidiaries to, (i) neither it nor maintain any real property to which the Company and any of its Subsidiaries shallsubsidiaries have ownership or a leasehold interest (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition, subject to reasonable wear and tear and subject to any casualty or condemnation, (ii) timely pay all material taxes, water and sewage rents, assessments and insurance premiums affecting such real property and (iii) timely comply in all material respects with the terms and provisions of all leases, contracts and agreements relating to such real property and the use and operation thereof;
(t) the Company shall not, and shall not permit any of its subsidiaries to, enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, except as required by Law or as set forth in Section 5.01(t) of the Company Disclosure Schedule;
(u) the Company shall not, and shall not permit any of its subsidiaries to, settle or compromise any pending or threatened suit, action, claim or litigation (except in the ordinary course of business consistent and with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse prior written notice to Parent; provided, that, nothing herein shall permit );
(v) the Company or shall not, and shall not permit any of its Subsidiaries to (i) enter into subsidiaries to, change any Contract of the type specified in Section 5.5(a)(viiiaccounting policies, practices or procedures (including tax accounting policies, practices and procedures) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to used by the Company or any and its subsidiaries as of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c)may be required as a result of a change in applicable law or in United States generally accepted accounting principles;
(w) the Company shall not, take and shall not permit any action with respect of its subsidiaries to, adoptrevalue in any material respect any of its assets, enter intoincluding, terminate without limitation, writing down the value of inventory in any material manner or amend the write-off of notes or accounts receivable in any change in controlmaterial manner;
(x) the Company shall not, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding and shall not permit any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect its subsidiaries to, adoptmake or change any material tax election, enter into, terminate make or amend change any employment or severance agreement or arrangement for the benefit or welfare method of any current or former director, officer, employee or consultant, except actions in the ordinary course of business accounting with respect to individual employment Taxes, file any amended Tax Return or severance agreements for employees below settle or compromise any material tax liability;
(y) the level Company shall not, and shall not permit any of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus its subsidiaries to, pay, discharge or satisfy any directorclaims, officerliabilities or obligations (absolute, employee accrued, asserted or consultantunasserted, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basiscontingent or otherwise), (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j) of the Company Disclosure Schedule, amend or accelerate the payment, right to payment discharge or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or any of its Subsidiaries from (x) prior to the Closing Date, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level of Vice President and above satisfaction in the ordinary course of business and consistent with past practices as to practice of liabilities reflected or reserved against in the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfied, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) financial statements of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than incurred in the ordinary course of business and consistent with past practice); provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measures;
(l) neither it nor any of its Subsidiaries shall make or rescind any material Tax election, amend any material Tax Return or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, in each case except in a manner consistent with past practice or as required by applicable Law;
(m) other than with respect to any actions permitted under Section 7.2, neither it nor any of its Subsidiaries shall take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VIII not being satisfied; and
(nz) neither it nor the Company shall not, and shall not permit any of its Subsidiaries will authorize any ofsubsidiaries to, agree or commit, resolve or agree, in writing or otherwise, commit to take, do any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operationsforegoing.
Appears in 1 contract
Interim Operations. The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless Parent shall otherwise consent in writing, which consent shall not unreasonably be withheld, and except Except as otherwise expressly contemplated by this Agreement or as set forth on the Company Disclosure Schedule or as agreed to in writing by Melita (which consent shall not be unreasonably conditioned, withheld or delayed), the Company covenants and agrees that during the period from the date of this AgreementAgreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(a) except as otherwise described in Section 5.01(a) of the Company Disclosure Schedule, the business and operations of it the Company and its Subsidiaries subsidiaries shall be conducted only in the ordinary course of business and usual course and, to the extent consistent therewith, it Company and its Subsidiaries subsidiaries shall use their respective commercially reasonable best efforts to preserve its intact their current business organization intact organizations, keep available the services of their current officers and maintain its existing relations employees and goodwill preserve their relationships with their material customers, suppliers, distributorslicensors, strategic partnerslicensees, creditorsadvertisers, lessors, employees distributors and other material third parties having business associatesdealings with them and to preserve the goodwill of their respective businesses;
(b) it the Company shall not (i) authorize for issuance, issue, selldeliver, pledgesell or agree or commit to issue, dispose sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock owned by it in or the capital stock of any of its Subsidiaries; subsidiaries, any other securities or any securities convertible into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including without limitation stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding on or prior to the date hereof or (ii) amend its certificate of incorporation or by-laws; (iii) other than in the case of wholly-owned subsidiaries, split, combine or reclassify its outstanding shares of capital stock; (iv) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, other than dividends from its direct or indirect wholly-owned Subsidiaries; or (v) purchaserepurchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, or permit any of its Subsidiaries subsidiaries to purchase repurchase, redeem or otherwise acquire, any shares of its capital stock or any securities convertible into other equity interests of the Company or exchangeable or exercisable for any shares of its capital stock;
(c) neither it nor any of its Subsidiaries shall subsidiaries (i) issueincluding, sellwithout limitation, pledge, dispose of or encumber (A) any shares of its capital stock of any class, Rights or any Voting Debt, or (B) securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class, Rights, any Voting Debt or any other property or assets (other than shares of Company Common Stock and associated Rights issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans); or (ii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire or encumber any material property or material assets (including capital stock of any of its Subsidiaries) or business;
(d) neither it nor any of its Subsidiaries shall restructure, recapitalize, reorganize or completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the operation of its assets or businesses or adopt resolutions providing for or authorizing any of the foregoing;
(e) neither it nor any of its Subsidiaries shall acquire (i) by merging or consolidating with, or by purchasing all or a substantial portion of the assets of or any stock of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof, or (ii) any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, except purchases of inventory and raw materials in the ordinary course of business (or as permitted by Section 7.1(g), whether or not material);
(f) neither it nor any of its Subsidiaries shall (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to the Credit Agreement in the ordinary course of business), (ii) issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities equity interests of the Company or any of its Subsidiariessubsidiaries), guarantee except for the purchase of Common Shares pursuant to the Company’s buy-back program;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any debt securities equity interest owned by it in any of another Personits material subsidiaries or alter through merger, enter into liquidation, reorganization, restructuring or in any “keep well” other fashion the corporate structure or other agreement to maintain any financial statement condition of another Person or enter into any arrangement having the economic effect ownership of any of the foregoingits subsidiaries, (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or capital contributions to, or investment in, any other Person, other than the Company or any of its direct or indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(g) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $10 million per quarter in the aggregate for the Company and its Subsidiaries, taken as a whole (it being understood that if capital expenditures in any quarter are less than $10 million, the shortfall shall be available to the Company to spend in future quarters);
(h) neither it nor any of its Subsidiaries shall make any material changes in accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of calculating, any bad debt, contingency or other reserve;
(i) neither it nor any of its Subsidiaries shall, except in the ordinary course of business consistent with past practice, enter into, renew, modify, amend, terminate, waive, delay the exercise of, release or assign any material rights or claims under, any Company Material Contract or Company Lease in a manner materially adverse to Parent; provided, that, nothing herein shall permit the Company or any of its Subsidiaries to (i) enter into any Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix) to the extent such Contract would survive after the Effective Time, or modify or amend in a manner adverse to the Company or any of its Subsidiaries any existing Contract of the type specified in Section 5.5(a)(viii) or Section 5.5(a)(ix), or (ii) except to the extent permitted by Section 7.2(a) of this Agreement, enter into, renew, modify, amend, terminate, waive, delay the exercise of, or release or assign any material rights or claims under, any confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(j) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) except as otherwise requested by Parent pursuant to Section 7.11(c), take any action with respect to, adopt, enter into, terminate or amend any change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan (excluding any employment or severance arrangements) for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) take any action with respect to, adopt, enter into, terminate or amend any employment or severance agreement or arrangement for the benefit or welfare of any current or former director, officer, employee or consultant, except actions in the ordinary course of business with respect to individual employment or severance agreements for employees below the level of Vice President, (iii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, except increases in the ordinary course of business given to employees below the level of Vice President on an individual basis, (iv) except as otherwise provided herein and other than as set forth on Section 7.1(j5.01(c) of the Company Disclosure Schedule, (ii) amend or accelerate the payment, right to payment otherwise change its certificate of incorporation or vesting of any compensation bylaws or benefits, including any outstanding options or restricted stock awards, (v) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (vi) other than with respect to existing commitments as of the date of this Agreement set forth on Section 7.1(j) of the Company Disclosure Schedule, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or, except as otherwise provided herein, the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, or (vii) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan; provided, however, this Section 7.1(j) shall not prevent the Company or permit any of its Subsidiaries from subsidiaries to amend its certificate of incorporation, bylaws or equivalent organizational documents or
(xiii) prior to the Closing Datesplit, paying awards under the 2006 Executive Incentive Plan and commissions to employees at the level combine or reclassify any shares of Vice President and above in the ordinary course of business and consistent with past practices as to the approval of such awards and the timing of such payments, to the extent the performance standards and targets set for 2006 have been satisfiedits capital stock, and (y) prior to the Closing Date, establishing (with the input of Parent, to the extent permitted by applicable Law), adopting and maintaining plans providing for bonuses or incentive compensation in 2007 for employees (including those at the level of Vice President or above);
(k) except for matters identified in Section 7.1(k) of the Company Disclosure Schedule, which shall set forth in reasonable detail the Company’s plans with respect thereto, neither the Company nor not permit any of its Subsidiaries shall initiatesubsidiaries to split, settle combine or compromise reclassify any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement and other than in the ordinary course of business consistent with past practice); provided, however, that notwithstanding any other provision of this Agreement, neither the Company nor any shares of its Subsidiaries shall enter into any settlement of or compromise any litigation, claim, grievance, charge or proceeding that, whether at the time of the settlement or compromise or at any time in the future, materially increases the labor or operating costs of the Company or any of its Subsidiaries or places any material restrictions on the ability of the Company or any of its Subsidiaries to impose any labor saving or other cost reduction measurescapital stock;
(l) neither it nor any of its Subsidiaries shall make or rescind any material Tax election, amend any material Tax Return or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated, in each case except in a manner consistent with past practice or as required by applicable Law;
(m) other than with respect to any actions permitted under Section 7.2, neither it nor any of its Subsidiaries shall take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VIII not being satisfied; and
(n) neither it nor any of its Subsidiaries will authorize any of, or commit, resolve or agree, in writing or otherwise, to take, any of the foregoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operations.
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